No matter the size, to survive a business must make money. But according to Maite Baron, author, international speaker and co-founder of TheCorporateEscape.com, businesses that are driven by values are the ones that succeed in the long term.
While increasing profitability is of course a top business priority, making it the “be all and end all” can actually hurt profitability, as the current customer and employee climate does not favor companies that are in business to only make a profit. Rather, it favors companies who have made corporate social responsibility (CSR) an active part of their business model.
Just ten years ago, only about a dozen Fortune 500 companies embraced CSR—today the majority do. As do a large number of profit and non-profit businesses of all sizes, across a wide range of industries. With increasing consumer and employee demands that companies become more transparent, more communicative and more involved with making the world a better place, companies are realizing they cannot afford to ignore CSR.
In fact, according to the 2015 Cone Communications/Ebiquity Global CSR Study, 90% of U.S. consumers said they would switch brands to one associated with a cause, given comparable price and quality. And regarding employees, the 2015 Cone Communications Millennial CSR Study found that 62% were willing to take a pay cut to work for a responsible company.
There are all types of CSR programs, including environmental and community support, “buy one give one”, matching gifts and volunteer grant programs. And although the particulars of programs may differ, the goal does not—to help both society and a company’s public perception benefit.
Let’s take a closer look at some of the reasons CSR is more important today than ever before and how doing good is good for business, communities and individuals.
It’s common sense—a company’s public image is pretty much dependent on their CSR program. Think about it, most everyone feels better doing business with companies that help the community. So much so, that according to a study by Cone Communications, nine out of ten consumers said they would not do business with a company that did not have a CSR program. Donating to schools, sports and community programs, helps companies promote a positive public image and that’s also positive for communities.
Attracting and Retaining Employees
A company’s greatest asset is its people and building strong teams is key to a company’s success. CSR can help companies “win”, as they make recruiting and retaining employees easier. People want to work for companies that make a social or environmental impact and have a positive public image. And those people who do are happier, stay with companies longer and are more philanthropically minded.
CSR programs can help companies develop effective leaders and drive employee engagement, innovation and collaboration. For example, skills-based volunteering programs have been proven to help develop leadership skills more effectively and more economically than conferences, classes, seminars and training programs.
And if that fact is not impressive enough, take a look at these not too shabby numbers from a study conducted by the Society for Human Resources Management. They found that companies with strong CSR programs had:
- 55% better morale
- 43% more efficient business processes
- 38% better employee loyalty
Positive media coverage can have a significant impact on a company’s bottom line. The “good” a company does in the local community or beyond reflects its CSR values. And the more “good”, the more coverage—which helps retain and attract both customers and employees.
Develop New Markets and Strengthen Partnerships
CSR programs can open companies up to new opportunities, through exposure to new cultures, markets and product applications. Additionally, they can help form valuable partnerships that protect market share and increase distribution by leveraging existing products, services, capital, networks and expertise.
Implementing a CSR program does not need to be a big expense. As a matter of fact, if properly put in place and conducted, a CSR program can help reduce costs by:
- Lowered investment in traditional advertising
- Less employee training and onboarding costs through more efficient employee hiring and retention
- Managing potential risk and liabilities more effectively
Bottom Line: A New Standard
Make no mistake about it, corporate social responsibility is not a passing fad—it’s here to stay and becoming a business standard. And that’s good news for everyone—economically and emotionally.