Over the last two years, the importance of corporate social responsibility to employees has grown significantly. As the pandemic forced workers to take a step back and reevaluate how they spend their time — and who they spend it with — American businesses are struggling with workers leaving their jobs.
This turnover problem is being referred to as “The Great Resignation”, and many managers and leaders may be worried about top talent leaving — rightfully so if their companies do not hit benchmarks employees require.
Why is corporate social responsibility important to employees?
An oft-overlooked portion of the employee experience is a company’s social impact or reputation. Corporate social responsibility (CSR) at first seems like an external strategy, but smart employers realize their social impact is also internal.
After all, shouldn’t your employees be your company’s biggest ambassadors? Attracting more top-level team members becomes easier when those on the inside are raving about their work experiences to their networks.Corporate social responsibility is much more important to employees than you might think.
Without ample reason for your top-performing employees to stay, they could leave for companies more aligned with their personal ethical standards.
According to the The Cone Communications Millennial Employee Study, 83% of millennials would be more loyal to a company that helps them contribute to social and environmental issues. Sixty-four percent of millennials said they would not even take a job if the employer didn’t have a strong CSR policy.
Why corporate social responsibility is important for employee retention
Millennials are the largest generation in the U.S. labor force according to the most recent information available from Pew Research Center, and those numbers are predicted to keep growing through 2029.
As the effects of 2020 continue to unfold, there are certainly notable trends in the workplace that are shaping employees’ career decisions.
One of these trends is an increased responsibility from employers to support overall employee wellbeing. Employers hoping to keep high-performers are implementing programs related to mental wellness, family care, paid leave, and more to show employees that they — and their families — are supported.
Read: 2021 Forecast for Mental Health: 6 Key Trends
A recent study from PR agency Weber Shandwick found that 44% of Millennials would feel more loyalty towards their CEO if he or she took a stand on a contentious issue.
Additionally, the Boston College Center of Corporate Citizenship recently conducted a study on the State of Corporate Citizenship. Comparing those who integrate corporate social responsibility in their business strategies and those who don’t, the study surveyed 750 corporate respondents.
The results are telling: Nearly 80% of respondents with corporate citizenship in their strategy reported reduced employee turnover rates.
Looking towards the future, just imagine what the numbers will look like when Generation Z enters the workforce.
Gone are the days of staying silent for fear of ruffling feathers. Ask yourself the tough ethical questions:
- Is your company prioritizing profits over people?
- Is your company hurting the community more than it is helping it?
- If asked candidly, would your employees say they are proud to represent your company?
Think about which social issues intersect with your company’s core values and find ways to integrate them into your workplace culture.
Why corporate responsibility is important to recruit top talent
Reputation is everything, and workers are demanding social impact to be a priority for businesses.
Did you know 47% of Millennials think CEOs should speak up with an active stance on social issues?
Salesforce founder and CEO Marc Benioff is a prime example of this. Embracing the title of “activist CEO,” Benoiff clashed with other Silicon Valley leaders in 2018 as the lone leader favoring Proposition C to tax the city’s largest businesses to support homeless services.
If nearly half of the largest generation in the workforce places importance on an employer’s stance on social issues, what kind of work opportunities do you think they will seek out? Opportunities with employers that feel aligned with their personal values, of course.
The Boston College study mentioned previously also reported a stark connection between corporate citizenship and attracting top talent. About 81% of corporate respondents cite the positive connection.
As social issues are becoming more prevalent than ever and workers’ mindsets are changing expeditiously, companies need to act yesterday if they do not have a corporate social responsibility strategy in place.
Top-tier employees often do not want to be working towards something they do not believe in. Why would they want to be a part of the problem?
“In 2018 we saw an erosion of trust,” Stephen Hahn-Griffiths, chief reputation officer of the Reputation Institute, tells Forbes. “And now companies are being more transparent and are adhering to higher ethical standards.”
Even one of the bad-boy industries—gas and oil—is working on its reputation. Since 2017, ExxonMobil has been working hard to follow the United Nations’ Sustainable Development Goals by investing billions in energy-efficient technologies and lower-emissions research. They won the Reputation Institute’s most-improved award in 2018, garnering media attention and a better reputation.
“Corporate responsibility is no longer optional,” Hahn-Griffiths says. “It is critical for any business, but especially important for companies looking to improve their reputations.”
There are many more internal CSR strategies a company can use to attract the top talent of tomorrow. See 5 CSR Strategies Successful Companies Are Using Today →
Why corporate responsibility is important for company growth
Investing in both your community and your employees pays off. (Literally.)
According to Glassdoor, 75% of employees and job seekers expect their employer to support local community causes through donations or volunteer efforts. Imagine if you could connect this expectation with your brand’s mission, all while providing real value to your community. Sounds like a home run, right?
It is. Research shows that purpose-oriented employees are more likely to be satisfied with their jobs. A recent survey by Deloitte showed that employees are 2.6 times more likely to feel motivated at work when brands demonstrate humanity.
Recently, TIAA put this theory to the test and evaluated employees who got involved in their corporate social responsibility and volunteer opportunities versus those who did not.
The results?
Employees that participated in the initiatives were more likely to stay employed and to recommend TIAA to their friends.
“Engaged employees are more productive employees, they’re happier, and they want to remain at the company,” says TIAA’s Jarian Kerekes.
As any successful business leader knows, turnover is costly. With smart CSR, not only can you improve the bottom line by retaining employees and creating ambassadors, but also by the positives you put back into the community.
Incentivize employees to participate in your CSR with paid volunteer days. Or take a page out of EA’s book and offer bonuses to employees who demonstrate core company values.
“Employees can champion your company’s causes and lead events and projects that further your philanthropic goals,” Kerekes continues. “Whether that be through fundraising, or hands-on service engagements, or a speaker series establishing the company as a thought-leader in a particular space as it relates to giving back.”
Additionally, in a recent study conducted by the Boston College Center for Corporate Citizenship (BCCCC), it was concluded that out of 51% of businesses who track the link between employee volunteerism and work engagement, a whopping 96% of businesses who have employees that volunteer are more engaged at work than the employees who do not volunteer.
Following the pandemic, virtual volunteerism has been on the rise, and according to the BCCCC study, it is currently “the most popular type of employee volunteer program offered, followed by paid time off for volunteering.”
By having more engaged employees as a consequence of corporate volunteer programs, businesses can expect to see lasting benefits, such as an increase in employee productivity, greater team performance, lower absenteeism, and most importantly, happier employees.
Show employees and consumers alike that you care, and they will show you loyalty.