Are People the Forgotten Bottom Line in CSR?
| By 3P INSIGHTS |
Corporate Social Responsibility (CSR) has become a well-recognized strategy through which organizations can achieve competitive advantage. Indeed, research demonstrates that socially responsible organizations focused on the triple bottom line – people, planet, and profit – perform better. It makes sense that many organizational leaders therefore seek CSR differentiation for market-driven reasons. They focus on the positive brand reputation and publicity associated with things like philanthropy, eco-friendly products, and sustainability certifications. Too often though, organizational leaders forget that people are the first bottom line in successful CSR strategy.
In their efforts toward efficiency and productivity, organizations neglect the importance of workplace relationships, wellness, and continuous employee development. As a result, they overlook the fact that their ability to positively influence society depends largely on organizational commitment to improving the quality of life for workers and their families [1]. Leaders view employees as a cost rather than an investment.
Putting Employees First
According to Herb Kelleher, founder of Southwest Airlines, putting employees first creates happy employees [2]. This in turn translates into more highly engaged employees, who are more likely to treat customers well. Happy employees are also more productive and creative [3]. Unfortunately, most people – roughly 85% of people surveyed by a recent Gallop poll – are not happy at work [4]. There are many factors that lead to happy employees, but research suggests that training and development opportunities are among the most critical for today’s workforce.
For example, a survey conducted by PwC found that for younger and middle-aged workers, training and development opportunities were among the top 3 most important factors that made them want to work for an organization [5]. Another study conducted by IBM found that employees who feel they cannot develop within their organization are also 12 times more likely to leave the organization [6]. Ultimately, employees who feel valued by management as a key component of the organization’s success are more likely to be engaged, loyal, motivated, and productive. People want to be trained to make a positive social impact.
People also want to work for values-based firms. In a survey conducted by the University of Pennsylvania, 82% of workers in the U.S. said they would be willing to earn less pay if it meant working for a company that conducts business ethically [7]. Other research indicates that forms of “prosocial incentives,” which reward employees through acts that benefit society rather than money or pay, lead to improved productivity, higher retention, and lower wage demands [8]. Of course, paying a living wage is another necessary part of successful CSR.
Attract Better Employees
Organizations demonstrating strong corporate citizenship may also attract better employees [9]. According to Paul Polman, Dutch businessman and former CEO of Unilever, employees are proud to work for organizations they see making a difference and are willing to go the extra mile for a purpose-driven business [10]. Employees feel a greater sense of professional purpose when they perceive their organization positively impacts society and this sense of purpose is an essential part of employee empowerment. On the other hand, CSR initiatives can backfire if employees think they are being implemented for the wrong reasons. One experiment found that employees who think their organization is using CSR initiatives “instrumentally” (only to benefit the organization’s financial bottom line) were actually less motivated and less loyal to the organization [11].
There is a reason that “people” are listed as the first “P” in the triple bottom line framework: employees are the key to CSR success. Employees are the ones on the ground implementing policies, programs and strategy, and they are the ones who will be most critical if an organization’s CSR initiatives are less than genuine.
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3P INSIGHTS is a consulting firm that offers training, speaking and support services to help organizations attract and retain diverse talent, create inclusive workplaces, become better environmental stewards, and improve their overall social, environmental, and economic impact.
— REFERENCES —
[1] Rothbardt, J. (2013). Global Corporate Social Responsibility. [2] Chandler, D. (2017). Strategic Corporate Responsibility: Sustainable Value Creation, 4th Ed. Thousand Oaks, CA: Sage Publishing, Inc. [3] Ibid. [4] Misra, P. (2018). Investing in Your Employees Is the Smartest Business Decision You Can Make. [5] Admin. (2018). The True Cost of Not Providing Employee Training. [6] Ibid. [7] Chandler, D. [8] Meier, S. & Cassar, L. (2018). Stop Talking About How CSR Helps Your Bottom Line. [9] Wheelen, T., and Hunger, J. (2012). Strategic Management and Business Policy, 13th Ed. Upper Saddle River, New Jersey: Pearson Education, Inc. [10] Chandler, D. [11] Meier, S. & Cassar, L.
