Engaging Your Employees in CSR
In the grand scheme of things, Corporate Social Responsibility is still an emerging field, which means that everything – from general strategy to best practices – is still being solidified.
One of the questions that is still debated quite often in the CSR community concerns the “business case” for this kind of work.
In a world where business decisions need to be justified through sound reasoning and quantitative measurements, it can be tough to explain why “doing good” is important.
I’ve tried to tackle this question in past posts, and the fact that I’m bringing it up again I think is proof that the jury’s still out on this one. Nonetheless, I did just hear one perspective on the topic that I thought was worth sharing with you.
Bob Willard is a sustainability author whose “claim to fame” (as he put it) is the quantification of the bottom-line benefits that companies can enjoy through CSR. He recently presented his ideas on the value of CSR as part of a Net Impact Issues-in-Depth call that I was lucky enough to listen to.
Bob started by laying out his general framework for the case for CSR, otherwise known as The 3 R’s:
- Risks
- Responsibilities
- Rewards
The first category, Risks, is pretty obvious and serves as the most direct justification for engaging in CSR. From managing regulatory changes to preparing for the potential depletion of certain natural resources, corporations must consider what risks they face and how CSR might help mitigate exposure to those risks.
The next category, Responsibilities, really speaks to the new wave of expectations surrounding corporate involvement in the community and the environment. Whether from consumers, the media, NGO’s or even employees, there is clearly pressure being put on companies to be active and engaged in society – with reputation, loyalty and credibility at stake.
Yet it was the third ‘R’ – Rewards – on which Bob focused. As Bob put it, “There are surprisingly big rewards for taking up responsibility expectations and mitigating risk”.
In fact, according to Bob’s calculations (which he called conservative), these rewards can be sizeable for both large corporations and small-to-medium businesses, who can expect to earn at least 38% and 66% more profit, respectively, through CSR programs.
Not surprisingly, the biggest area of CSR reward comes from the eco-efficiencies created in sustainability programs (ie: saving water, reducing waste, etc).
What comes next? Interestingly enough, the second biggest reward opportunity comes through employee engagement in CSR programs. Whether through reduced recruiting and attrition costs or increased employee productivity, the HR benefit of CSR is not to be overlooked.
Now, we all know anecdotally that CSR improves morale, reduces turnover, and generally leads to more satisfied employees. What’s cool about what Bob has done is that he’s actually put numbers behind these assertions and provided the calculations that prove these rewards.
Admittedly, I’ve never been great at statistics – but when Bob presented a regression analysis showing a correlation (R² = .57) between employee engagement and CSR activities, I just about swooned!
While I’m not going to repeat everything Bob presented, you can check out his website to see presentations and spreadsheets that show the numbers behind his ideas. In general, Bob’s overall point was that employee engagement drives business results (after all, happy employees beget productive employees) – and that CSR is one big way to dramatically improve the recruitment, retention and satisfaction of employees.
Thus, in essence, CSR leads to engaged employees which leads to increased returns for business. And voila - the business case for CSR in a nutshell!
As a job-seeker and future engaged employee, this assertion rings true for me. Nonetheless, if you’re still doubtful, I’ll leave you with some of Bob’s statistics as food for thought:
Recruiting
- 40% of MBA grads rated CSR as a an “extremely” or “very” important company reputation measure (Hill & Knowlton Jan 08)
- MBA grads will sacrifice an average of $13,700 in annual salary to work for a socially responsible company (2003 Stanford University study)
Retention
- 83% of employees in G7 countries say their company’s positive CSR reputation increases their loyalty (GlobeScan 2006)
- 57% of employees say their company’s CSR reputation is a factor in retaining them (Towers Perrin-ISR global survey 2007)
Productivity
- Fully engaged employees are 2.5 times more likely to exceed performance expectations than their “disengaged” colleagues (Hay Group website, May 2009).
- At Best Buy, a 2% increase in employee engagement at one of its electronics stores corresponds, on average, to a $100,000 annual rise in its sales (Business Week, “The Case for Optimism,” August 13, 2009).
So what do you think? Is employee engagement a compelling motivation for CSR at your company? Is this an argument that wins over senior company leaders? I’m curious to hear your thoughts.
once again, ash – totally timely post for something i’m researching for a class. much appreciated info! keep it up
[...] fourth link further reinforces the case for sustainability & employee engagement with good stats and [...]
hi Ashley, great post. Yes, employee engagement is key to business performance in general and CSR performance specifically, As a former HR Director, I have first hand experience of this. I would also add that CSR is about effective management of and accountability for business impacts on all stakeholders. Good CSR is not just about engaging employees so that they are more productive i.e. doing more business. It is also about the impacts OF and BY the employees on all stakeholders. I often talk of turning business “impacts ON employees” to “impacts OF employees”. Only when CSR is truly embedded and touches all employees will each employee in every interaction with every stakeholder be able to contribute in a meaningful way to sustainability, ie not just doing more business but doing more business more sustainably.
And just one other thing.. there are zillions of studies now that say students will sacrifice salary to work in a socially responsible businesss. I have yet to see a survey of MBA’s who actually did and how much cash they walked away from.
Thanks for another thoughtful post
elaine
http://www.csr-reporting.blogspot.com
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This post was mentioned on Twitter by AshleyJablow: New on my blog: My recap of @NICentral call with #csr expert Bob Willard – the value of employee engagement in csr http://bit.ly/dtW9Jo…
Hi Elaine,
Terrific point – there’s a crucial distinction between impacts on employees versus impacts of employees, and ideally a CSR strategy is so ingrained and integrated that we are talking about not just engaged employees at work, but engaged employees in our communities and for our environment.
As for MBAs taking a pay cut – you’re right that these sorts of surveys are on the rise these days. As an MBA on the job hunt now, I will say that I personally would be willing to take a pay cut to work at a company whose values reflect my own. How much would I give up? That part’s not so clear
Thanks as always for your thoughtful comments.
-Ashley
This is an excellent post regarding CSR. I really liked the one statistic you gave about MBA grads sacrificing pay to work for a socially responsible company.
I think CSR is crucial for employee engagement. If employees know the work they are doing is helping out a greater cause, it would motivate them more in their day to day tasks.
Hi Drew, you’re right – CSR is a terrific tool for employee engagement and, by extension, employee productivity. It’s amazing that some companies still just don’t “get it”! But the ones that do get it, I think, will have better luck attracting and retaining the most talented employees.
Thanks for reading The Changebase,
Ashley
Great (simple) framework and thoughful post Ashley, thanks for sharing the insight. Also, great comment by Elaine (impact on and by employees).
I’d like to share one point from my experience. I strongly believe in the business case outlined however I believe there is a delta between what employees say they would sacrifice in theory and in practice.
I’m cautious about looking at CSR (as an influential factor) in isolation when assessing its impact on attraction and retention. I definetly believe it has an influential role in employees decisions however it is only one factor, not the deciding factor. As I write this, Chris Jarvis’s post http://realizedworth.blogspot.com/2010/03/tourist-traveler-guide-journey-of.html comes to mind, I have encountered a fair number of those tourists.
Thanks, Rhian
twitter/rhianr
Hi Rhian, you are so right. CSR can certainly be part of the equation when it comes to employee retention and attraction, but clearly there are other factors in play. I hadn’t read Chris’ post on the difference between Tourists, Travelers and Guides in an employee engagement program but after looking through it, I couldn’t agree more. There can’t be a one-size-fits-all model – each company and each employee is unique and has different goals and motivations for being involved in CSR. Chris’ idea to segment employee volunteers based on where they are in this spectrum is smart and should definitely be considered by CSR and volunteer managers.
Thanks for reading The Changebase and for your great comment!
-Ashley
[...] http://www.thechangebase.com/2010/03/22/engaging-your-employees-in-csr/ In the grand scheme of things, Corporate Social Responsibility is still an emerging field, which means that everything ? from general strategy to best practices ? is still being solidified. One of the questions that is still debated quite often in the CSR community concerns the ?business case? for this kind of work. In a world where business decisions need to be justified through sound reasoning and quantitative measurements, it can be tough to explain why ?doing good? is important. I?ve tried to tackle this question in past posts, and the fact that I?m bringing it up again I think is proof that the jury?s still out on this one. Nonetheless, I did just hear one perspective on the topic that I thought was worth sharing with you. Bob Willard is a sustainability author whose ?claim to fame? (as he put it) is the quantification of the bottom-line benefits that companies can enjoy through CSR. He recently presented his ideas on the value of CSR as part of a Net Impact Issues-in-Depth call that I was lucky enough to listen to. Bob started by laying out his general framework for the case for CSR, otherwise known as The 3 R?s: 1. Risks 2. Responsibilities 3. Rewards The first category, Risks, is pretty obvious and serves as the most direct justification for engaging in CSR. From managing regulatory changes to preparing for the potential depletion of certain natural resources, corporations must consider what risks they face and how CSR might help mitigate exposure to those risks. The next category, Responsibilities, really speaks to the new wave of expectations surrounding corporate involvement in the community and the environment. Whether from consumers, the media, NGO?s or even employees, there is clearly pressure being put on companies to be active and engaged in society ? with reputation, loyalty and credibility at stake. Yet it was the third ?R? ? Rewards ? on which Bob focused. As Bob put it, ?There are surprisingly big rewards for taking up responsibility expectations and mitigating risk?. In fact, according to Bob?s calculations (which he called conservative), these rewards can be sizeable for both large corporations and small-to-medium businesses, who can expect to earn at least 38% and 66% more profit, respectively, through CSR programs. Not surprisingly, the biggest area of CSR reward comes from the eco-efficiencies created in sustainability programs (ie: saving water, reducing waste, etc). What comes next? Interestingly enough, the second biggest reward opportunity comes through employee engagement in CSR programs. Whether through reduced recruiting and attrition costs or increased employee productivity, the HR benefit of CSR is not to be overlooked. Now, we all know anecdotally that CSR improves morale, reduces turnover, and generally leads to more satisfied employees. What?s cool about what Bob has done is that he?s actually put numbers behind these assertions and provided the calculations that prove these rewards. Admittedly, I?ve never been great at statistics ? but when Bob presented a regression analysis showing a correlation (R? = .57) between employee engagement and CSR activities, I just about swooned! While I?m not going to repeat everything Bob presented, you can check out his website to see presentations and spreadsheets that show the numbers behind his ideas. In general, Bob?s overall point was that employee engagement drives business results (after all, happy employees beget productive employees) ? and that CSR is one big way to dramatically improve the recruitment, retention and satisfaction of employees. Thus, in essence, CSR leads to engaged employees which leads to increased returns for business. And voila – the business case for CSR in a nutshell! As a job-seeker and future engaged employee, this assertion rings true for me. Nonetheless, if you?re still doubtful, I?ll leave you with some of Bob?s statistics as food for thought: Recruiting [...]