15 Nov Why CSR Matters: The Importance of Corporate Social Responsibility
Corporate social responsibility (CSR) has become one of the most important considerations for the modern business. A 2015 study found organizations that committed themselves to adopting CSR experienced substantial performance and profitability compared to organizations that didn’t. The study also revealed that CSR-engaged companies had higher engagement and retention levels across their workforces and offered better service to their customers.
A CSR strategy, also referred to as a sustainability strategy, should be a standard component for any organization looking to achieve a positive impact and distinct value for business owners, stakeholders, shareholders and customers. By implementing policies that focus on and integrate social, human rights, environmental, ethical and consumer concerns, organizations can better attract and retain the best talent and the most loyal customers.
How Adopting CSR Helps to Attract Top Talent
High employee turnover, inability to attract top talent, and difficulty in establishing employee engagement are just some of the problems facing businesses today. Workers are looking for more than just a steady wage and stable job; they are looking to work for companies with sound CSR principles at their very core. A recent survey by Nielsen found that 67 percent of workers would rather work for a socially responsible company.
When developing a CSR program, it is tempting to focus on your organization from an external perspective. However, in doing so, you could be missing out on one of your biggest corporate social responsibility opportunities — your people. It is entirely possible to cater to the needs, wants, and expectations of new hires while also focusing on the needs of your existing people. In doing so you show you care about your workforce, value their input to the business, and want them to stick around.
CSR Vastly Improves Employee Retention
Attracting and hiring new workers is just the beginning of the relationship, although many businesses act as if their work is finished. The journeys of new workers starts the moment they walk through your doors on their first day. It’s important that you give them positive experiences on that day and throughout their employment. If you do, they are more likely to stay put.
Zappos’ talent retention track record is an excellent case in point. In 2015, the online clothing and shoe store experienced an impressive employee turnover rate of only 13 percent. The secret? Well, its approach is actually quite simple — it invested in its people. By giving its people the tools they needed to succeed, allowing workers to be themselves, and adopting a culture of continuous learning and development, Zappos now boasts one of the lowest turnover rates in the retail industry.
Learn more about how to improve your company’s corporate social responsibility
Corporate Social Responsibility and the Customer
In business, customer retention is everything. When your industry is getting more competitive by the day, and companies are using more ingenious ways to gain and retain customers, it pays to be attentive to customer demand. Corporate social responsibility is just one way you can show you are listening to your customers and taking positive action.
When you engage in CSR activities, your organization can add value for the customer in a number of ways. CSR activities are typically split across three categories:
Philanthropy — donation of sales, donation of products, charity events, employee volunteerism, and so on
Business practices — recycling, reduced energy consumption, ethical labor practices, ethical animal testing, ethical conduct, and so on
Product-related activities — Organic, energy efficient, ethical ingredients, product quality, and so on
Organizations that strive to increase customer value through CSR activities can experience improved customer conversion and retention rates. In doing so, they gain a competitive advantage in their marketplace and become more profitable.
Ways to Improve Corporate Social Responsibility Today
Adopting CSR activities across your organization might sound like a daunting prospect, but there are many elements you can start putting into place today. Here are just some suggestions:
Customers love the word “sustainable.” When they hear it, they’re likely to think of lush rainforests, fair trade coffee, and recycled materials. This is great for business, and the more sustainable purchasing decisions you make, the better.
By focusing on and engaging in your immediate surroundings and community, you capitalize on the power of “soft marketing.” Arranging and taking part in community events, sponsoring local teams or groups, or arranging an employee volunteer program are just some ways you can serve your community.
Encourage the innovators
All organizations, large and small, should foster an approach that encourages ideas, creativity and empowerment. Encouraging employees to participate in new projects develops their problem-solving skills, and can help uncover some great insights that range from the practical to visionary. Invest in your people, and they will pay it back.
Corporate social responsibility isn’t just a passing phase or a cynical marketing ploy for large organizations; there are tangible benefits for all, regardless of company size, industry, or company culture. The secret is to treat CSR as one of your core values, and not just another initiative. Knowing where to start with CSR can be daunting, but by taking our performance climate survey, you can quickly learn which areas of your organization are in need of improvement and how to get started.