Companies that are active in CSR tend to be more engaged in their workforce. They are more likely to attract top talent because of their positive public image. Moreover, companies who use CSR Software tend to attract more customers and better employees because they are more likely to encourage personal growth and volunteer work. In this way, CSR benefits companies in many ways.
Attracting New Employees
Developing a strong CSR program can boost employee engagement and loyalty. A recent study by Porter Novelli found that 89% of employees would be more loyal to a company with a strong CSR focus. Moreover, employees feel more satisfied and proud when they work for an organization that takes responsibility for societal issues.
CSR initiatives have also been linked to lower overhead and recurring costs. For instance, switching to more energy-efficient equipment and green energy alternatives, as well as reducing packaging on CPGs, can significantly reduce costs. The socially responsible image of an organization can also make employees want to stay longer, lowering employee turnover costs. Companies that practice CSR also stand a better chance of attracting and retaining the best talent.
Similarly, authentic CSR initiatives positively impact employee engagement, despite a weaker relationship with perceived organizational support. In addition, CSR projects that involve extra-role involvement are negatively associated with lower employee engagement.
Building a Good Reputation
CSR is a form of corporate responsibility where companies are held accountable for their social and environmental impact. This type of responsibility has become increasingly popular with consumers. Millennials are increasingly concerned with social issues and prefer to do business with companies that care about their impact.
CSR is a strategic investment that can build a company’s reputation. It helps companies earn an informal license to operate from the local community, leading to new customers. More than three-quarters of companies have some sustainability program, but only 36% communicate their full range of sustainability initiatives.
Developing a good reputation is an important part of a CSR plan. It helps create a “safety net” of positive information and perceptions that mitigate the negative impacts of negative information. In this way, a company can avoid a potential reputation crisis.
Increasing Employee Engagement
One of the most important aspects of CSR is that it increases employee engagement. When employees feel engaged, the company will benefit from an improved work environment and better client relations. Ultimately, this improves the profitability of the company. Moreover, socially responsible companies focus on improving employee quality of life. For this reason, employers must offer opportunities for career advancement, training, and other benefits to their employees.
Businesses must identify a cause that matters to them. Asking the employees about their interests will allow them to target their CSR efforts better and make them more impactful. For this purpose, businesses should send pulse surveys to employees to determine what causes are most important to them. Employees who feel connected to a cause are more likely to stay with the company longer. Further, this work will increase the company’s reputation among its target demographic.
While consumers care about great products and competitive prices, they also care about good brands for the community and the environment. As a result, companies that demonstrate their social responsibility efforts often lead to more innovative products and services. Some programs focus on creating environmentally friendly solutions and has introduced new LED lights, which help consumers conserve energy and save money. The company estimates that these innovative products have generated over $200 billion in sales since their launch.
Increasing social responsibility through procurement management has many benefits for companies, from attracting new investors to improving financial performance. Companies that show their social responsibility efforts tend to see their stock prices rise, which is crucial if they hope to attract new capital. According to a recent report published by research firm 10 Sustainability and the Babson College Social Innovation Lab, companies that show evidence of their CSR efforts have an increased market value of up to 6%, improved stakeholder value by $1.28 billion over 15 years and reduced their systemic risk by as much as 4%.
CSR also improves a company’s public image. In the United States alone, 87% of consumers purchase products from companies that support their values. And nearly half of these consumers will even pay more for those products. In addition to improving profits, CSR helps companies build employee loyalty and employer branding.