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.
Yet organizations are being called upon to take responsibility for the ways their operations impact societies and the natural environment. It is no longer acceptable for a corporation to experience economic prosperity in isolation from those impacted by its actions. Firms must now focus on both profitability and being a good corporate citizen.
The truth is, organizations 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 our Insights & Impact group.
Corporate Social Responsibility Initiatives Strengthen Employee Engagement & Commitment
Why might employees be more committed to organizations that focus on corporate social responsibility?
Our Retiring the Generation Gap research found 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. CSR initiatives can, of course, increase engagement for employees of all ages.
This makes sense; our personal identities are partly tied up in the companies we work for: If my organization is helping to save the world, I am too. I feel good about the work I do.
While CSR initiatives can strengthen commitment for members of all generations, corporate social responsibility may be especially important for younger workers and female employees.
Millennial workers in particular want to do good and do well. In fact, this is among the keys to attracting and retaining Millennial employees. Almost 85% of Millennials believe making a positive difference in the world is more important than professional recognition.
And while both men and women tend to think that their organizations are doing well as corporate citizens, our data found that women feel a stronger commitment to their organizations than men as a result of their organization’s corporate social responsibility initiatives. This aligns with our other research which has found that viewing work as a calling is among the key things that women want from work and which can help retain more women in the workplace.
The takeaway: a focus on social responsibility is particularly important to attract, retain, and increase the commitment and engagement of Millennial employees and talented women.
Get Your Employees Excited About Your Investments in Corporate Social Responsibility
But to reap the benefits of corporate social responsibility initiatives, companies have to be strategic in communicating their good deeds. After all, employees can’t be proud of something that they aren’t aware of.
Often, leaders at the highest levels of an organization have the most positive view of their companies’ corporate social responsibility work. “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 commitment, partially because they aren’t aware of all the social responsibility 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 2 points to keep in mind:
- Share tangible positive outcomes and real impact. For example, communicate exactly how much money and paper has been saved through a sustainability initiative to reduce paper waste.
- Don’t make “much ado about nothing.” In other words, be sure your CSR programs and policies are actually making a difference, and that you really have something great to share.
According to our research, there’s good news about sharing the good news: Once employees — from line leaders to senior executives — know about their companies’ social responsibility initiatives, they are just as committed as those C-suite executives.
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 social responsibility initiatives embed them 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 even more committed to their organization.
- Employees prefer contributing to work they find meaningful.
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 corporate responsibility 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, younger workers 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.
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.