Sometimes corporate social responsibility initiatives — for example, providing scholarships to students who are the first in their families to go to college, or investing in STEM education for girls — feel like a “nice to have,” not a “need to have.” And in times when the economy isn’t strong or an organization isn’t performing at its best, going above and beyond can seem financially irresponsible.
But the truth is, companies have enormous potential to affect change in their communities and the environment when they invest in corporate social responsibility (CSR) initiatives — and in doing so, they can also boost the bottom line.
Field-based and laboratory studies have found that CSR is linked to increased purchase behavior, higher customer satisfaction, and higher market value of a firm,1 all of which translate into increased profitability.
“And not only do customers have higher perceptions of a company, but employees are also prouder of, and more committed to, their organizations when their organizations are focused on CSR initiatives,” says Sarah Stawiski, director of CCL’s Insights & Impact group.
But to reap the benefits of embarking on CSR initiatives, companies have to be strategic in communicating their good deeds. After all, employees can’t be proud of something they aren’t aware of.
Communicate Your CSR Investments to Increase Employee Commitment
Why might employees be more committed to organizations that have CSR initiatives? According to data from a CCL World Leadership Study, it’s because our personal identities are partly tied up in the companies we work for: If my company is saving the world, I am too. So my association with the company reflects positively on me and makes me feel good about the work I do for the company.
Often, leaders at the highest levels of an organization have the most positive view of their companies’ CSR initiatives. “These top-level managers are likely to have a strong sense of ownership of CSR initiatives because they are responsible for making the decisions about CSR initiatives,” says Stawiski. “And it follows that they would likely have a positive view of the policies they helped create.”
Employees at lower levels of the organization may report lower levels of perceived CSR because they aren’t aware of all the initiatives that the C-suite knows about.
To maximize any internal CSR benefits, senior executives should remember that not everyone knows what they know. As they publicize their efforts, there are two points to keep in mind:
- Share tangible positive outcomes. For example, show how much money or paper has been saved through a sustainability initiative to reduce paper waste.
- Don’t make “much ado about nothing.” In other words, be sure the programs and policies are actually making a difference, and that you really have something great to share.
According to CCL’s data, there’s good news about sharing the good news: Once employees — from line leaders to senior executives — know about their companies’ CSR initiatives, they are just as committed as those C-suite executives.
Get Your Employees Excited About CSR Initiatives
In addition to communicating your organization’s CSR efforts, make an effort to get employees at all levels of your organization involved. Companies who do a great job at leveraging their CSR efforts embed the initiatives into their employees’ jobs. Multiple advantages of this approach include:
- Employees come up with innovative ideas for how to make a positive impact in the community and meet a business need at the same time.
- Employees believe in the importance of their organizations’ CSR initiatives, and as a result they’re more committed to their organizations.
- Employees prefer contributing to work they find meaningful.
This is particularly important for engaging younger workers. According to Millennials in the Workplace, 84% of millennials believe making a positive difference in the world is more important than professional recognition.
“Put another way, millennials want to ‘do good and do well,’” notes Jennifer Deal, senior research scientist at CCL and coauthor of What Millennials Want from Work. In fact, this is among the key truths she uncovered about the millennial workforce.
This sentiment is consistent with other research that shows that most working adults, regardless of their generation, want the same things at work — and are committed to their organizations for substantially the same reasons.2 CCL’s data reveals there is no difference in the amount that CSR contributes to organizational commitment for members of each generation.
Across gender, however, there’s a bit more difference. While both men and women tend to think that their organizations are doing well as corporate citizens, CCL’s data shows that women feel a stronger commitment to their organizations than men as a result of their organization’s CSR initiatives.
The takeaway: CSR may be particularly important for companies concerned with increasing the commitment of their female employees. This aligns with our other research which has found that viewing work as a calling is among the things that women want from work.
Remember the Big Picture
While CCL data shows that CSR does make a unique contribution to organizational commitment, the data also indicates that it’s less important than basic job satisfaction. In other words, if employees are not generally happy and trusting of the organization, a strong CSR program is less likely to result in an improved retention rate than initiatives that directly improve job satisfaction, such as job enrichment and autonomy.
Still, the social responsibility tide is swelling. Again, according to Millennials in the Workplace, millennials largely believe that creating social value is the primary purposes of business — not to make profit.
Just as employees express their desire to work for a socially responsible corporation through increased engagement, customers speak with their dollars. Increasingly, they care about the social and environmental effects of corporations and prefer products tied to a social cause. As this happens, CSR becomes all the more important. There’s even a push among businesses to become certified for their social responsibility initiatives.
That’s why leaders who understand how to leverage their corporate social responsibility initiatives put down roots that support strong growth, both for their organizations and their communities.
At CCL, we believe leadership is a critical lever in creating social change. Learn more about our Societal Advancement group, which works with individuals, organizations, philanthropists, and communities around the world to improve the human condition.
1 E.g., Lichtenstein, D.R., Drumright, M.E., & Braig, B.M. (2004). The effect of corporate social responsibility on customer donations to corporate-supported nonprofits. Journal of Marketing, 68, 16-32.
2 Deal, J. Retiring the Generation Gap. Jossey-Bass/Wiley, 2007.