Business Benefits of CSR (Corporate Social Responsibility)
CSR (Corporate Social Responsibility) is probably seen as a bit of a buzzword in today's society, but what exactly is CSR and how does an effective CSR programme benefit businesses?
The modern worker cares more about purpose than perks.
- The Happiness Index
Many businesses are quick to invest in employee perks in their quest to boost employee engagement and retain their best talent. This can come in many forms – gym membership, meals out, outings.
These are quick solutions that will tick the required employee engagement boxes and present an adequate case to the board. They could temporarily make a difference, but they will never achieve long-term engagement.
The reality is that it takes more than a gym membership or a meal out to improve employee engagement. Today’s workers want to feel proud of their organisation and know they are working for a business that focuses on more than its own balance sheet.
This article will highlight how businesses that focus on corporate social responsibility (CSR) can enhance employee engagement, improve retention and boost profits.
What is CSR?
At its heart, CSR is about a business being responsible for the activities and decisions it makes that impact upon the community, environment and society as a whole.
It is more than putting in a hand dryer instead of paper towels and encouraging double-sided printing. A strong CSR programme will actively contribute to the conservation, health and welfare of society and the environment.
Businesses that want to attract and retain the best people should focus on their CSR programmes. This is evidenced by a recent study by The Conversation: “More than 90% of business students in a study on corporate social responsibility said they would be willing to sacrifice some percentage of their future salary to work for a responsible employer. A surprising number of 14% are willing to sacrifice more than 40% of their future income to do so.”
This clearly demonstrates the importance of CSR for the next generation of workers. But how does it improve business?
Enhanced Employee Engagement
Volunteering enables us to create shared value, engage our people and enable them to contribute to causes close to their hearts.
Engaged workers are invaluable. Typically, they are less stressed, healthier, better at dealing with customers and more likely to become loyal brand ambassadors for your business.
Companies with highly engaged staff report employees taking an average of 7 absence days per year, approximately half the 14 days per year reported in low engagement companies (bottom 25%). Those employees in high engagement companies also report significantly less workplace stress, 28% versus 39% (Aon Hewitt).
70% of engaged employees indicate they have a good understanding of how to meet customer needs; only 17 % of non-engaged employees say the same (CIPD).
78% of engaged staff are brand advocates – likely to recommend their company’s products or services (KPMG).
The role CSR can play in improving your businesses reputation for your employees and potential employees alike is huge. Your people want to feel proud of the organisation they work for. If they look favourably upon the business and have a positive outlook towards the way you operate – they are far more likely to be engaged.
Kenexa Research Institute compiled a study on worker’s perceptions of CSR. They discovered that businesses that focus on CSR will reap the benefits of a more engaged workforce, with an increased amount of admiration for the business leaders. Moreover, they found that “Of those who are satisfied with their employer’s CSR commitment: 86% have high levels of engagement.”
Improve Relationships With Customers
A strong CSR programme is a vital component to build trust between the company and its customers. It can help to improve attitude towards the company, which may be reflected in sales figures and client retention.
The right CSR initiative can improve your company’s reputation and position you as an ethical and responsible alternative to your competitors. This will help to strengthen existing relationships, attract new business/partnerships and ultimately increase market share.
The UK Small Business Consortium compiled some research into the impact CSR has on customer loyalty. Their findings suggest that “88% of consumers said they were more likely to buy from a company that supports and engages in activities to improve society.”
Increase Employee Retention
Employees are loyal to organisations that have a positive impact on the community.
- Dr Steven Stein
It is essential to keep your people happy and make adjustments to improve their working lives. Failure to do this will result in wandering eyes – which can be very costly.
According to CLC, replacing employees can cost up to 150% of the departing individual’s salary. Research from Oxford Economics suggests that on top of the huge fees to recruit and train new employees it can take up to 28 weeks to get the new employee up to speed. On top of this, failure to hold on to existing staff will massively affect company culture and employee engagement.
By operating responsibly and sustainably you will create a workplace that people will be proud to be a part of. This will help you to recruit new employees whilst retaining your existing ones.
A study by Babson College discovered that businesses with a commitment to sustainability could see increases in productivity by 13% and reductions in turnover by up to 50%.
Attract A Bigger Talent Pool
There are many ways to become an employer of choice and attract the best talent. For example, you can offer flexibility, high salaries, work-life balance and a robust CSR initiative. Offering a strong CSR programme will provide a competitive advantage in the “war for talent.”
Workers are becoming more community and environmentally-minded and therefore value organisations that are ethical with their business practices and sustainability initiatives.
The 2016 Deloitte Millennial Survey demonstrates this by suggesting that 56% of Millennials have ruled out working for a company if their values don’t align with their own. Many value purpose ahead of profit and therefore value businesses that focus on social responsibility as much as revenue.
Now you know the organisational benefits of CSR programmes – But how do you generate buy-in?
Engaging People Through Effective Communication
If you want people to engage with your CSR programme and make it a success, then it must be central to your organisation’s communications. Only then will it be embedded into the company culture.
To engage your people and truly make them connect with the programme, you should think of ways to capture their attention and help them understand why you are doing this. For example, if you are starting a walk-to-work scheme to lower emissions, you could sponsor a charity walk and collect money for a local charity. This will be much more impactful than a note at the bottom of the company newsletter.
To generate interest in the programme, it is key to communicate through email, posters, intranet, social media and even public addresses for larger companies. All business leaders and managers should build up excitement within their teams and be sources of knowledge in case there are any queries.
Another effective way to communicate is through real-time employee surveys. By sending out surveys related to the CSR initiatives you can gather valuable insights into the programme and build on successes, combat concerns and benefit from everyone’s ideas and innovations.
By building and sustaining long-term CSR initiatives, you will promote your business favourably to existing and potential clients and employees. On top of this you will generate profits through enhanced engagement, recruitment and retention.
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