Millennials Demand Change: Corporates Should Take Heed
In 2015, the millennial generation officially overtook the baby boomers as the largest generation in the US labor force and they are increasingly shaping the way people do business. A Deloitte survey about millennials in 2016 has shown that millenials have a positive view of business’ impact on society. However, they want businesses to focus more on people, products and purpose, and less on profits.
The emergence of millennials — strongly driven by social values, yet remarkably lacking in allegiance to their employers — present corporates with an urgent need to adjust their business strategies in order to nurture loyalty and meet the expectations of this generation who is simultaneously consumer, employee, entrepreneur and investor.
No More Plain Vanilla CSR
For starters, plain vanilla Corporate Social Responsibility (CSR) is no longer good enough. Millennials can recognize window-dressing efforts for what they are, and are increasingly demanding authentic CSR programs that are in line with the companies’ identities and values.
A recent study highlighted that 9 out of 10 millennials would switch brands to one associated with a cause, and they are more likely to use social media to engage with companies on social and environmental issues. Corporates are beginning to realize this, and even global rivals are banding together to collectively engage millennials to take action and further a cause.
Harvard Business Review highlights three theaters that characterize current CSR programs –
- Focus on philanthropy, such as donations or employee volunteering
- Improving operational effectiveness, such as reducing waste or investing in employee working conditions
- Transforming the business model
In order to execute effective CSR strategies, corporates need to ensure that their initiatives are aligned with their business purposes, with their people’s motivations and expertise, and with the needs of the communities that they work in.
Driven to Create Value at Work
“Cause-related work” — the term used by the Millennial Impact Report to refer to any initiatives or programs that are charitable in nature, is becoming an essential factor that millennials consider when they make career decisions. Millennials tend to stay because they are passionate about their work and can find a shared cause with their co-workers. While they are found to be less loyal to their organizations, millennials continue to make decisions based on their personal values and morals, which tend to be constant over the years.
At KKR — a global finance institution, its millennial staff are at the forefront of driving programs that make use of their existing skills set to drive social and environmental good. Recognizing this, KKR went beyond traditional CSR efforts, partnering with IIX to offer its financial, operational and analytical expertise, helping three Impact Enterprises to scale their business and impact.
Read more about IIX’s partnership with KKR in Redefining Capitalism: Equipping Corporates to Enhance Their Impact.
One of these enterprises is Glovax, a fully integrated vaccine company in the Philippines that imports, distributes, and retails vaccines at affordable rates to low-to-middle-income Filipinos. Following the technical assistance project, Glovax obtained a US$1 million credit line from BDO Universal Bank. With this funding, Glovax will increase the number of doses it markets annually to low-to-middle income people from 400,000 to 500,000.
Such partnerships enable companies to engage in skills-based volunteering, directly participating in empowering impact entrepreneurs and the communities they are working with.
The IIX-KKR partnership embodies an innovative model at the heart of IIX and Shujog’s work, where we can bring together disparate ecosystem players and leverage on their expertise in order to create impact. Apparently, millennials like that. Employers should understand this as they strive to grow and protect their workforces going forward.
Pushing the Boundaries of Investing
Positioned to become the wealthiest generation ever, millennials are also making waves in the investment space. Millennials are generous yet very conscious of about the impact their money is making.
Indeed, according to a recent study conducted across 18 countries, ‘to improve society’ was ranked the number one priority of business among millennials. It is no wonder Impact Investing is growing in popularity as an avenue to tackle the world’s most pressing issues while still providing an acceptable financial return.
Increasingly, the boundaries of impact investing is expanding beyond the usual wealthy, accredited investors. With the introduction of new retail offerings such as debt and equity crowdfunding, non-accredited investors (a category which most millennials would belong to), have been given the opportunity to invest in corporations and businesses that share their values through impact investing. However, there remains a dearth of crowd-based platforms that focus on supporting impact-driven SMEs. To address this gap, IIX has started work on the Impact Credit, a debt-lending platform that will enable ASEAN-based SMEs to raise capital from the general public.
Read more about how IIX’s work on Impact Credit in Debt-Based Crowdfunding: From Micro Enterprise to Small/Medium Enterprise.
Corporations and businesses seeking to attract investment dollars from this growing asset class should innovate their business models wherein social impact and financial objectives go hand in hand.
Here to Stay
Such trends underscore the emphasis that corporates wanting to position themselves as good companies must move beyond traditional CSR and focus on social impact creation in order to meet the demands of millennials as consumer, employee, as well as investor.
Millennials are here to stay, at least until the next giant generation takes over. In the meantime, they promise to shape the world and are already chiselling at this Herculean task.
Photo Credit: ITU Pictures / Flickr
Originally published at impactquarterly.asiaiix.com on July 27, 2016.
