Today’s workers care intensely about how their employer operates in the community.
The notion that companies have an obligation to “give back” to the world in which they work and, especially, profit is an oft-debated topic of Corporate Social Responsibility (CSR). Not every C-level executive is convinced of its importance. But the growing trend is for CSR to play an integral part in successful companies’ business planning.
Here are some misconceptions about CSR that prevent companies from implementing CSR practices, and the real truths that hopefully will enlighten and encourage company leadership to explore and implement a CSR strategy that positively affects their business and community.
• Myth: We accomplish our CSR goals by donating money to local causes.
The truth: Don’t get us wrong; giving money to worthy causes is good. But don’t kid yourself either; donating money isn’t a CSR strategy. True CSR is an approach to community engagement that utilizes your assets — people, resources, expertise — to enhance your community while driving business growth.
Giving money, or buying a table, doesn’t let you take full advantage of available CSR outcomes: superior recruitment and retention, enhanced stakeholder loyalty, improved team cohesion and productivity, leadership development, increased shareholder value and meaningful communication opportunities.
CSR not only accomplishes the good you seek with your donation, but also adds value to your company in other important ways. Smart companies recognize this simple truth: 84 percent of the respondents to a 2011 survey acknowledged that the days of writing a check are gone and the future of CSR lies in more thoughtful approaches to social innovation, according to Forbes Insights.
• Myth: The people we hire care about salaries and benefits, not our work in the community.
The truth: You couldn’t be more wrong. Studies reveal that today’s workers care intensely about how their employer operates in the community and how its stakeholders perceive it. For example, 79 percent of the Millenial Generation say they want to work for a company that cares about how it affects or contributes to society; 69 percent say their company’s CSR activities make them feel proud to work there; and 64 percent say their company’s CSR efforts make them feel loyal to the company, according to “The Millennial Generation: Pro-Social and Empowered to Change the World” by Cone Inc.
• Myth: We do business with other companies, not consumers, so CSR doesn’t matter.
The truth: CSR matters in every line of work. Why? Because business success can depend on your people’s level of engagement and productivity, as well as on how your business customers see you as a viable partner. CSR plays a vital role in both these key areas.
CSR is an invaluable tool for motivating and training your employees, as well as giving them a way to build on their skill sets. In a 2011 survey, 59 percent of companies acknowledged that CSR is the optimum way to increase employees’ skills and leadership, according to Forbes Insights. CSR allows employees to take on new roles, develop new skills and assume leadership positions that translate well back to their work setting.
In fact, more companies are making volunteer opportunities a key ingredient of their CSR programs because of their numerous business-building opportunities. What’s more, 54 percent of companies surveyed believe one of CSR’s goals is to differentiate them from the competition, according to the Harvard Business Review.
• Myth: Our investors don’t care about CSR; they care about ROI.
The truth: For the same reason(s) that a company’s revenue rises as its reputation grows, and its more engaged and productive people apply themselves to the task, so does its value in the eyes of investors and the market. More sales lead to a rosier outlook, which leads to enhanced value.
Companies with high levels of CSR have higher stock values and corporate valuations than similar companies without such strategies, according to the Harvard Business School. C-level leadership now recognizes that demonstrating social purpose is crucial to their organization’s shareholder value, according to Forbes Insights. Whatever the specific reason — improved reputation, enhanced loyalty, greater productivity or all of them — companies (93 percent of those surveyed) believe they create economic value by creating societal value, according to Forbes Insights.
The bottom line: The data show that companies that invest in their communities via CSR efforts have advantages over those that don’t, such as better employee retention and recruitment, greater customer loyalty, more positive reputation, increased shareholder value, and, most importantly, a more profitable bottom line.
n fact, the research gurus at Towers Watson report that companies who engage, enable and energize (this last one tied directly to the company’s efforts on the community front) their people show three times the operating margins of companies that don’t. So if you still believe CSR has no business in your business, do yourself, your company and shareholders a favor, and re-think your commitment to CSR.
Photo credit: Berlin Calling