Recently, due to an increased amount of pressure from the likes of globalization, bottom line results, and fierce competition, companies have been under a vast amount of pressure to increase their profit margins, productivity, and to also maintain and maximise their shareholder value. Companies must therefore scout and recruit the best and most talented individuals.
It has been highly documented that a company’s CSR practises are an essential way of attracting and retaining a mixture of good employees from various backgrounds. Earlier research suggested that corporate social responsibility was more influenced by younger generations; however, researchers that study the concept are now seeing that this trend has shifted and CSR is valued by a mixture of generations.
It can be said that today’s employees want to be associated with a company that feels that it can go beyond its daily business practises. Furthermore, today’s employees want to be a part of a company whose values are setting in stone with the way it engages and contributes to society.
In 2008, the Global Workforce Study (conducted research on around 90,000 employees from 18 countries worldwide on what drives employee engagement and attraction) the research indicated that using CSR as a key mechanism was linked to employee performance. In layman’s terms, CSR extends to the bottom line.
In addition, the Global Workforce Study showed that CSR is the third important driver of employee engagement. The outcomes revealed particularly in U.S. companies that the second driver for employee engagement was linked with a company’s reputation in the local community. These trends reveal that higher employee engagement levels are highly correlated with better business practises as measured by company revenues, earnings, and other essential corporate metrics.
The use of corporate philanthropy and volunteer programs can be used in sustaining employee engagement and allowing employees to become decision makers and leaders. Employees can help to identify specific projects that are worth investing in. Once a CSR program is established in a company, they can give useful feedback as they engage and watch on their CSR impacts and consider how the program can be improved.
IBM for example, their employees nominate local charities where they have volunteered to receive donations for IBM products. This method gives the IBM employees total control over its corporate philanthropy program.
CSR programs offer valuable opportunities for employees to become more engaged, not just by being responsible citizens in their communities but also by being valued as team members when participating in team projects. In a situation when employees take on new roles that are slightly different to their everyday tasks, they are therefore learning new skills and their fellow co-workers can recognise their various strengths and potentials that they might not see in their every day roles.
Stationary giant Staples aim with regards to their CSR program is to create more leaders with a global perspective. Rather than spend company resources on recreational activities such as golf outings, the stationary company puts together community volunteer opportunities. The company has witnessed that community involvement has helped employees develop various skills that are outside of their daily work routines, for example, project management skills and interpersonal and leadership skills.
In order to maximise the impact of its CSR potential, companies whether they are large or small, must have a strategy in place if they want the likes of employee engagement to prosper. One method that has increased is the partnership between companies and charities which has resulted in significant benefits on both sides.
There are many cases in which company employees can leverage new and unique skills that can often not be seen in many non profit organisations and has therefore added a huge benefit of being a tangible and an essential contribution to society. Again, using IBM as an example, the I.T. company has used successful programs where IBM employees take part in community service projects in less economically developed countries.
In contrast, companies that are just beginning to explore their CSR strategies, it is vital that they primarily focus on issues that are aligned with their overall business objectives. An example of this can be seen by American I.T. company EMC who work directly work alongside schools in the state of Massachusetts by funding subject areas such as maths, science, and technology. This alignment has a two-fold benefit. EMC requires a large talent pool consisting of employees and customers, this program helps to create both.
The employees’ perceptions of the company’s external CSR practises shape the employees’ attitudes and behaviours towards the company. The way in which the employees perceive the company’s CSR approach is important as it has a direct link with factors such as performance and turnover.
Employees who perceive their firm to be socially responsible will therefore be more committed in their role at the company and out-perform in terms of their work and also in terms of their contributions to CSR practises. This should put pressure on companies to increase their CSR activities in order to recruit and retain a good workforce. In addition, company performance is likely to rise due to the fact that employees view a committed socially responsible firm as a fair and ethical organisation and influence this fairness through dedication, transparency, and increased productivity.