Corporate Social Responsibility: It's No Longer an Option
Companies have their own ideas about corporate social responsibility (CSR) — and how much of a commitment they make to it. It can range from "going green" to supporting local charities.
But one thing is increasingly clear. It's not a choice any longer. Your employees expect it, and your company needs it.
What used to be considered good PR, or window dressing for community relations, is in fact linked to how well your employees perform. In other words, CSR extends to the bottom line. Sound like an exaggeration? Not at all.
The Engagement Connection
In our Global Workforce Study, we found that CSR is the third most important driver of employee engagement overall. For companies in the U.S., an organization's stature in the community is the second most important driver of employee engagement, and a company's reputation for social responsibility is also among the top 10 drivers. Take a look:
This is important because higher employee engagement levels are highly correlated with better business performance as measured by revenue, earnings and other key business metrics.
Helping to Attract Talent
Our Global Workforce Study also found that a company's reputation as a good employer ranks sixth as an attraction driver. Organizations with a reputation for CSR can take advantage of their status and strengthen their appeal as an attractive employer by making their commitment part of their value proposition for potential candidates.
Some of the world's largest companies have made a highly visible commitment to CSR, for example, with initiatives aimed at reducing their environmental footprint. These companies take the view that financial and environmental performance can work together to drive company growth. This attitude can only serve to enhance the employment value proposition as interest in "going green" gains traction.
The CSR Factor: Company Reputation
We also found that when employees view their organization's commitment to socially responsible behavior more favorably, they also tend to have more positive attitudes in other areas that correlate with better performance. They believe their organizations recognize and reward great customer service, act quickly to address and resolve customer concerns, and are led by people in senior management who act in the best interest of customers.
Confidence in senior management is higher in other areas, too, when employees give their company high marks for being socially responsible. For example, 82% of these employees say their organization's senior management supports new ideas and new ways of doing things. This correlation is important because a company's success in the marketplace is often influenced by its capacity for innovation.
So you can add corporate social responsibility — the CSR factor — to the top drivers of workplace engagement. It's also a factor in attracting and retaining talent. And the more senior management is seen to be out front on the issue, the more employees like it.
For a fuller discussion, see Uncovering the Hidden Value in Corporate Social Responsibility.
Sustainable Business Practices: How to Get There
In Europe and elsewhere outside the U.S., companies have been taking their social role seriously for years, often under the banner of what is known as corporate sustainability. The EU has developed a corporate sustainability framework, which identifies a progressive set of economic, social and environmental objectives that companies are encouraged to achieve.
At Towers Perrin, we have developed a methodology to assess the employee perspective on sustainable business practices (SBP). These practices represent a continuing commitment by a company to behave ethically and contribute to economic development while improving the quality of life of its workforce and family members, as well as the local community and society at large. Towers Perrin's SBP index specifically covers five areas:
- awareness and perceived importance among employees
- employee sustainable behaviors
- social and community performance
- environmental performance
- ethical and legal performance.
For more information about sustainable business practices, please contact us.