CSRinsights: The Fact Sheet: CSR Impacts the Bottom Line

It’s in the facts. Research proves a measurable payoff exists of corporate social responsibility (CSR) initiatives to companies as well as their stakeholders. So, we turned on our proverbial flashlight to aggregate quantifiable data that so easily gets lost in reports, stacks of research and that endless labyrinth we call – the mind.

We wrote this edition for two very simple reasons:

1)To provide you with a high-level business case, within one page, that clearly lays out the proven benefits of a well executed CSR program

2) To equip our readers with a source they can pass to others who may find such information meaningful and influential within their own decision making process

1. Employees: Are Willing to Work Longer and Harder for a Company They Believe In

CSR can be a key driver in employee engagement within a company. Volunteer hours and giving amounts may feel like a fuzzy, do-good metric but the reality is these programs can deliver quantifiable benefits valued for business returns (if well-managed). Effective employee engagement programs have shown to reflect improvements in employee retention, business performance and attracting talent. Making sure employees are well-aware and engaged with the company’s program(s) brings a competitive advantage if they are treated with more than a nice-to-have attitude.

What sort of impact can retention play on the bottom line? Consider the fact that the cost of replacing a mid-level employee is estimated to be roughly 150% the value of their entire compensation package, when factoring in time, recruitment, training, etc. For high-level employees, the cost can reach upwards of 750%. No matter the level of the employee, and despite the actual cost impact to the company, the indisputable facts remain constant: a well executed CSR program can improve retention, therefore, positively impact the bottom line of the company.

– Companies with high employee engagement had 19% increase in operating income and almost a 28% growth in earnings per share.

– Companies with low levels of engagement saw operating income drop more than 32%and earnings per share decline over 11%.

72% of employed Americans trying to decide between two jobs offering the same location, job description, pay, and benefits would choose to work for the company that also supports charitable causes.

– Employees who are very involved in their company’s cause program are 28%
more likely to be proud of their company’s values and 36% are more likely to feel a strong sense of loyalty than those who are not involved.

2. Consumers: Expect and Prefer CSR Companies

Consumers today, with the assistance of social media, the internet, mobile devices, etc., are more vocal about their expectations around a company’s commitment to CSR and how they engage them in the process. Promoting cause awareness and educating consumers of the company’s related CSR programs pays off, primarily with an increase in brand reputation, purchasing behaviors and sales through word-of-mouth. In fact, trends start to look pretty grim when their perceptions don’t meet their expectations – feeling they are not engaged enough and not clearly communicated to.

90% of consumers want companies to tell them the ways they are supporting causes.

75% agree brands and companies don’t disclose enough information about their charity/social cause programs.

41% of Americans say they bought a product because it was associated with a cause or issue in the last year – doubling since 1993.

3. Society: The Influence of Expectations and Trends

The “Millennials,” also known as the “Y Generation,” grew up recycling, eating organic foods, learning new technology on a whim, and constantly being attached to their social networks. They understand that community service was a prerequisite to getting into a good school, and landing their first job. Now that they entered the workplace, they place high importance on giving back to the community. This tech-savvy generation is civic minded and 78 million strong, leading the trends for the future.

75% of executives say they plan to maintain or increase investments in social networking, blogs, wikis and other technologies that encourage peer collaboration.

56% of Millennials who frequently participate in their company’s volunteer activities rate their company culture as very positive.

79% of companies say donations increased with more choices for workplace giving programs.

Helpful Resources and References

Northup, Jan. “Employee Retention Is the Key to Minimizing Turnover Costs.” Web log post. HR.com. HR.COM Limited, 30 Sept. 2010.

“2010 Cone Cause Evolution Study.” ConeInc.com. Cone Inc, 2010.

“2011 Deloitte Volunteer IMPACT Survey.” Deloitte.com. Deloitte Development LLC, 2011.

“Closing the Engagement Gap: A Road Map for Driving Superior Business Performance.“
TowersWatson.com. Towers Watson, 2008.

“Listen Up! The Talent Dialogue Approach to Employee Engagement.” Deloitte.com. Deloitte Development LLC, 2009.

“Shaping the Future: Solving Social Problems Through Business Strategy.” CorporatePhilanthropy.org. Committee Encouraging Corporate Philanthropy, 2010.

“Social Good.” JWTintelligence.com. J. Walter Thompson Company, Sept. 2011.

“Workplace Giving Works! Make It Work for You.” LBGresearch.org. LBG Research Institute and LBG Associates, 2010.

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