How is ineffective CSR decreasing your competitiveness?
Corporate Social Responsibility (CSR) is a tarnished endeavour that is barely understood yet constantly strived for. For many, it is game played in the dark and an involuntarily procession towards buzzwords with no real plan for execution. But how is this affecting your bottom line?
The advantages of well executed CSR are widely documented, and a failure to combat ineffective CSR now poses a threat to your competitiveness. In a report by Ramon V. del Rosario, Corporate Social Responsibility in South East Asia: An Eight Country Analysis, Rosario draws direct links between CSR and economic gain. He claims many sectors of society “not only expect business to behave in a socially responsible manner but also that, in many cases, these non-traditional stakeholders in a business enterprise could either adversely or positively affect a company’s economic results.” CSR is evolving into “a more enlightened practice, one that takes into account the significant role business plays in economies as well as the positive economic effect of responsible behaviour.”
The notion that social purpose and financial performance are not mutually exclusive is in fact reaffirmed by CECP’s Giving in Numbers data. Companies that increased total giving between 2014 and 2016 by 10% or more had higher median revenue growth rates (+4.1%) and pre-tax profits (+7.6%) than all other companies in the same period.
Not only is your economic gain affected by social impact, but also your customer loyalty. Consumer activism is increasing, and NGOs are placing more responsibility on the consumer to consider corporate social activity when making purchase decisions. Research by Manifest Communications, Canada, shows 91% of consumers are likely to switch to brands that are associated with a good cause and 83% think companies have a responsibility to support causes. This rise in conscious consumerism also means ineffective CSR is a missed opportunity to distinguish your company from your competitors. Rosario states that well operated CSR value translates into “a competitive advantage [for a company] since it would be difficult for its competitors to replicate particular activities and hence, the benefits gained by the company.”
So good CSR benefits your business, but what about your employees? Failed CSR decreases your employee loyalty, dissolves company culture and even impacts recruitment. According to Forbes, 63% of female employees said their company’s cause work influenced them to accept a job, along with a significant 45% of male employees. The Corporate Executive Board found that “the employees most committed to their organizations put forth 57% more effort and are 87% less likely to leave their company than employees who consider themselves disengaged.” CSR provides an invaluable training ground that aligns employees on your mission and strategy and, as Karl Moore writes, provides “one of the most powerful ways for younger managers to understand and experience the type of leadership needed for the C-Suite”. This missed opportunity is a costly shortfall that inhibits the recruitment of millennials, but also the retention of your existing workforce.
The solution? Smart corporate giving
You need a digital solution to CSR that makes it easy for employees to contribute to society and allows your HR/CSR department to track their progress in real time. But software isn’t enough, you need to create a community of active employees who are incentivised to give back and have a vested interest in the success of their company’s social initiatives. Our B2B platform connects employees to a marketplace of volunteering opportunities and rewards them with experiences. Volunteering is gamified for the employee and their company, allowing them to contribute in the ways they feel most connected to, which is far more sustainable than top-down initiatives.
Great content is a natural by-product of successful CSR. By giving employees the tools and the flexibility to drive your company’s goals, they are more likely to share their progress and respond to content affiliated with your CSR. Corporate and charity partners can leverage each other’s brand value and will create authentic, unique content that builds loyalty with potential/current employees, consumers and customers.
Isn’t time you took CSR seriously? Get in touch to learn more about our platform.
natalie@hourvillage.com
Sources:
Ramon V. del Rosario, Sr. (2011) Center for Corporate Social Responsibility, Asian Institute of Management
CECP, in association with The Conference Board. Giving in Numbers: 2017 Edition.
http://strategyonline.ca/wp/wp-content/uploads/2014/09/part-three-corporate-citizenship-1.pdf?fa2b83
Corporate Executive Board, “The Role of Employee Engagement in the Return to Growth,” Business Week, Aug. 2010, Accessed May 2012
