The impacts of corporate social responsibility can offer many benefits to businesses, from the potential of increased revenue, to brand loyalty and even tax benefits. It’s also shown to improve employee satisfaction, and when used as a centered business strategy, or simply implemented well, it offers great things for a business.
This article will explore ten benefits that companies experience when implementing corporate social responsibility into the heart of their business models. But first, what is corporate social responsibility?
What is CSR?
CSR, or corporate social responsibility is the act of a company of any size giving back. This can be in environmental or sustainable commitments, or commitments made to improving the community. When used as an authentic center point for business practices, it improves business performance, public image, and employee satisfaction.
CSR for businesses can mean anything from minimizing environmental impact by cutting back on office waste, organizing volunteer drives with employees, or donating to an environmental cause.
CSR has become increasingly important and valuable to companies in recent years. More and more consumers and employees alike want to align themselves with businesses that they feel represent their values.
In fact, 62% of millennials born between 1981 and 1996 want to work for a company that offers a positive impact, and 50% would prefer to work a meaningful job than a high paid job. In addition to this, a staggering 73% of millennials say that they are willing to spend more money on sustainable items.
10 Corporate Social Responsibility (CSR) Benefits
The statistics are clear. Companies that incorporate CSR into their business model reap the benefits. They are more likely to have staff who want to stay in their jobs, and they are more likely to have loyal customers to boot. And there are even more benefits to CSR:
1. More effective than advertising at getting new customers
While brands and businesses will typically set out to establish their reputation through marketing, a growing amount of evidence is showing that CSR can be more effective than traditional advertising when communicating to new customers.
This is because with marketing, companies only shine a bright light on what they want the prospective buyer to see. Corporate social responsibility on the other hand, offers a more genuine, compassionate insight into a company and its values.
To make it short, in a world where everyone can find out anything about a company, authenticity and ethical standards prevail.
2. Lower staff turnover
The idea that corporate social responsibility lowers the general rate of staff turnover is rooted in the idea that employees today are craving more value and reason behind their jobs. While it is certainly true that many workplaces experience a lowered staff turnover when putting more effort into CSR, by 3 - 3.5% annually- roughly 25-30% overall.
However, we must look at the type of CSR that a company is investing themselves in. It makes perfect sense that a company that goes above and beyond to look after its staff would have a lower staff turnover. If your company's CSR efforts are entirely based around environmental sustainability for example, then this may not help you to retain employees.
Employees stay in their jobs because of several reasons: job satisfaction, the environment of the company, and good prospects to name a few. On the other hand, employees may stay in their jobs because of instability in the job market, family commitments, and so on.
It’s good to have a low staff turnover, but you must consider the external circumstances before you assume it's because of the good your company is doing. If you aren’t sure, conduct an internal staff survey to see how your staff are feeling in their jobs.
3. Increased customer loyalty
The benefits of a loyal customer base is not something that many successful business owners will argue with. From word of mouth (WOM) marketing to increased money spent per transaction as well as an increased number of transactions–AND loyal customers are even resistant to the marketing of your competitors.
So what does this have to do with CSR? CSR can provide both direct and indirect influences on businesses. By having a socially responsible business you are immediately and automatically taking steps to improve your corporate image. An improved corporate image (through CSR) is shown to improve customer loyalty, and allow businesses to reap the benefits as such.
4. Builds public trust
Do millennials and Gen Z’ers trust businesses? No, not really.
Climate change and wealth inequality are two of the biggest concerns for the younger generations, and as businesses in general tend to have a bad reputation when it comes to these things (think Jeff Bezos making $3,715 a second against the average Amazon employee making $29,007 a year for wealth differences, and Nestle harvesting millions of liters of water from a drought stricken Canada, leaving citizens without drinking water.)
Considering these social and environmental injustices, It’s clear that the average business needs to do more than its fair share to be seen as reputable. So, how do you do this?
Get your employees involved
If your employees aren’t committed to your CSR efforts then it’s going to be very difficult to execute them on a larger scale. For example, if you are trying to reduce the waste your office produces, but everyone is still printing things needlessly it’s going to be very difficult for you as an employer to reach your goals.
On the other hand, if everyone in the office is motivated to achieve the same goal you will reach it much faster. You should also aim to start an employee volunteering scheme that will encourage employees from every level to become engaged with the greater goal. If successfully executed then it will also contribute to word of mouth sharing as your employees talk with their friends and relatives about what is happening at the office.
Utilize social media
Social media was created to connect people. For brands, it’s a uniquely fantastic tool that allows you to create a persona for the business. If you talk about your CSR efforts on social media, you are not only making it a part of your brand, but you are also advertising it practically for free.
Make sure it actually works
CSR shouldn’t be about donating money to a cause that may or may not line up with your business morals. It should be about incorporating the message into the very ethos of your company. Implementing it into supply chains, ensuring your carbon emissions are as low as possible, and making sure that your staff are content and happy with the job they are doing.
The best way to gain public trust is to make sure you are really doing the things that will make people trust you. In the time of social media, where everyone knows everything, an authentic connection to the world (and not just profits) is crucial.
5. Increased Profits
Increased profits go hand in hand with increased customer loyalty, public trust, and lower staff turnover. After all, the lower your staff turnover is, the less time and money you have to spend searching and training new staff.
Public trust leads to higher brand awareness, which leads to more loyal customers. But not only that, having a high level of public trust can also help you avoid negative outcomes. By sharing your company morals and reacting in time to political and social issues, you can avoid things such as a boycott of your brand.
One example of this is Chick-fil-A. When Chick-fil-A began donating to a number of anti-LGBTQ+ charities, the backlash was notable and to this day, many people continue their boycott despite the chicken fast food joint dropping the controversial donations. Interestingly, stopping the donations made the other side of the coin equally as angry. It was a PR nightmare that the company is still trying to recover from.
6. Encourages the growth of your employees & employee engagement
If you have a group of employees that are committed to your company and its morals, then it will increase your employee engagement levels. Employee engagement offers a myriad of benefits for employees and employers alike. From a better work environment, to increased productivity, to improved client relations and an increased profit margin, employee engagement is crucial.
Likewise, if you have sunk time and resources into your socially responsible business, it’s likely that you will be focusing on your employees and their quality of life and employment. If you want to get, and to keep, talented employees then it’s vital that you offer them a clear path of progression, or at the very least, additional training.
This helps to keep employees interested, engaged and attentive to the job, and it will also make sure that they stay longer.
7. Makes your company more attractive to investors
More and more, investors are searching for businesses that they feel they can get behind. With the new standards of ethical practices, stakeholders want to feel that their investment is solid. A solid investment is one that will stand the test of time, and since 2013 CSR has only become more prevalent.
Socially responsible investors (SRIs) seek out businesses that have shared values, and while SRIs are still the minority of investors, their numbers are rising. Shareholder engagement is also seen to be more prominent in companies with SRIs, as they are more willing to push CSR to the forefront of business strategy.
CSR sets your company apart and makes it more attractive to potential investors, and this is only set to improve as time goes on.
8. Improves company branding
CSR is more than just a friendly business term used to hook investors, and it’s more than a caring donation to meaningful charities. It’s a strategic tool to showcase your businesses ethics, and allows your clientele to trust your business.
Businesses that have branded themselves particularly well include Ben & Jerrys and Starbucks. Both of these companies put a lot of resources into their company branding and their CSR. Starbucks donates between 5c and 15c per transaction, and pledged to hire 10,000 veterans by 2018. Ben and Jerry’s made a commitment to their entire supply chain, hiring some of the best and most ethical people in the business (Greyston bakery for example).
Both of these companies are extremely successful, and both have CSR at the center of their company branding.
9. Creates media and press opportunities
If you’ve been reading up on CSR, then you’ve likely been reading a few examples of the good, the bad, and the ugly executions of corporate social responsibility. Having a good CSR campaign at the center of your business model can be free advertising for you.
An example: If your company is based in a small town and your commitment is to improving literacy rates in the community, you can get free media attention for that which will also improve your brand's trust.
Most good CSR campaigns will also have articles written about them, usually published by third parties. It’s not just free publicity, it’s free good publicity (because no, not all publicity is good publicity).
10. Supports your local or global community
While this final point may not be strictly dedicated to how CSR can benefit your business, it is dedicated to how CSR can benefit those surrounding you. In fact, the whole point of corporate social responsibility is to improve the lives of the people, communities, and planet surrounding you.
Engaging in social responsibility is a great way to improve the world for those around you and for the future generations. And building a better world also happens to be good for business!
Conclusion
There are many benefits to incorporating CSR into your company, and many of these positives can help to grow your business and improve your revenue, as well as improving your company’s impact on the world. CSR is at the center of many long term successful business plans, which succeed because of brand loyalty, shareholder support and employee satisfaction as written about in this article.
So, how do you show the world the benefits of your company’s CSR campaign?
The most effective way to showcase and have people actually retain the information is to do so through video. If you want to communicate the efforts that you have been making toward corporate social responsibility, then consider making a video about it.
Video content has been proven time and time again to increase engagement, expand reach, and offer a more memorable and informative platform for you to utilize and improve your business. By demonstrating your use of CSR in the workplace, with our help you can create an unforgettable piece of video art.
Reach out to us today, and find out exactly how we can help you achieve your business goals.
