Nowadays you are guaranteed to come across the term Corporate Social Responsibility (CSR) on a fairly regular basis, be it in your company, in the news, on the street or with family and friends. While for some people this is the latest hot topic, to others it sounds more like a broken record.

CSR goes by many names, ranging from corporate citizenship to ethical business and from corporate philanthropy through to responsible business practice. However, as with other ‘business practice’ terminology – like Human Resource Management (HRM) – to many, CSR is a vague and an elusive concept.

CSR – as I see it – is not about hugging trees and recycling, though these are in themselves very important causes! CSR is a profit-boosting concept that enables companies’ to boost their public image, increase sales and encourage employee productivity and engagement, among other benefits.

Defining ‘responsibility’

In a nutshell, CSR means “doing the right thing”. It refers to business decision-making based on ethical values, compliance with legal standards, and respect for communities, their citizens and the environment. CSR comes from the realisation that business and the wider community are interdependent, just as stakeholders are. It is in businesses’ best interests to strengthen the communities in which they work as business success is ultimately linked.

Having spent four years working in the “third sector” and a further two years in marketing, I have had the opportunity to work with many companies – and charities – to help them understand what CSR means, its benefits and how it should be integrated to best effect. For me, CSR is not a new phenomenon: it has been on the corporate agenda for many years. However, companies that once shunned the concept as a “nice to have” are now starting to take a keener interest as it moves towards a “must have”!

A wolf in sheep’s clothing?

First and foremost, it is clear that there is still are large number of companies that do not understand what the term CSR means. Many are also unsure whether the concept applies to them and what the real benefits are. Cynicism towards the concept is also a barrier to its adoption, with CSR often being viewed as a ‘greenwash’ or fluffy PR stunt. Of course, there are some companies that view CSR in precisely this light and use it to hide business ‘nasties’ or for short-term wins through publicity. However, companies that follow this approach limit the benefits they both get and give, while also running a real risk of backlash.

Ultimately I believe it is the fear of the unknown that limits the adoption of CSR in some businesses – smaller companies in particular. These business owners are unsure whether to stick their heads above the parapet and are fearful of generating a backlash amongst their stakeholders.  The simple answer here is: “yes, you should!”  Not doing anything about CSR is actually the riskier option in today’s society.  With growing levels of social awareness and concerns amongst consumers and additional pressure from the media, people now expect companies to be responsible.

CSR is a concept that applies to all businesses – regardless of size and industry – and the benefits are universal. The business benefits of a well-integrated and expertly managed CSR strategy have been widely reported and include:

• Enhanced public image and corporate reputation
• Enhanced brand value and equity
• Increased sales
• Customer bonding, acquisition, satisfaction and retention
• Enhanced confidence and stakeholder trust
• Improved employee productivity, attract higher calibre staff and reduce churn

Focusing on the last point in particular, employees are crucial in fostering CSR throughout the business. Their influence can be felt in all of the benefits above, making them a key success factor in any company’s CSR strategy.

The power of people

People are a key stakeholder group to any organisation and a group to which CSR is crucially important. They are also fundamental in the effective implementation of any CSR strategy, just as HRM sees people as being a key element to sustained business success. Indeed, HRM also plays a central role in CSR as far as employees are concerned.  In my opinion, it is also important to remember that HRM is also responsible for how people are recruited, treated and also developed; this is another area where CSR can pay dividends.

What does being responsible in the workplace mean? At a specific level it means businesses have polices in place to promote equal opportunities for all employees, irrespective of age, gender, race, disability or sexual orientation – focusing not only on recruitment, but also retention, training and development.

On another level, responsibility in the workplace also means businesses listening to the concerns of their employees on how the business impacts society at large and developing strategies to address this.

Having a well-implemented CSR strategy and being recognised as a company that ‘cares’ has numerous benefits for HRM. Companies that excel in this area can recruit the best employees (from the boardroom through to the shop floor), positively influence the views of existing employees and move their working relationship with the employer from a merely rational level (i.e. rewards-based) to a more emotional level (i.e. “I am proud to work for this company”). It has also been cited that a strong CSR programme will strengthen employee loyalty and retention. The definitive benefit for business is that staff can become brand ambassadors, supporting and promoting a company in both good and bad times.

Mentoring

Part of some businesses’ CSR strategy has involved offering mentoring services to small businesses (e.g. start-ups), charities and community projects. Through this approach, the larger businesses benefit from access to new talent – with reduced recruitment costs and recruiting them before the competition – to developing existing staff skill sets by allowing them to manage additional projects and learn new skills.

For CSR to work well and provide benefits for all those involved, it must be integrated to become part of a company’s DNA – the saying “built-in, not bolt-on” really holds true here. If a company’s commitment to CSR is not genuine then there is the real risk of stakeholder backlash and even boycott.

This is where people play a crucial role. A company’s workforce will often be the first to criticise and evaluate the sincerity of the company strategy. They are also responsible for implementing and communicating this to other stakeholders – especially to customers – as well as implementing the strategy in other day-to-day activities such as procurement, supplier management, managing business transactions and investments and so on.

To ensure that people understand what the business is trying to achieve and buy into the concept, it is imperative that they are seen as partners and be engaged and involved from the start of the process. A lack of engagement will limit the true impact and potential of any CSR strategy.

Closing thoughts

CSR is no longer a fringe activity. The successful companies of today and tomorrow will be those that recognise the importance of an inclusive approach to business, taking into account the concerns of all its stakeholder groups – not only its employees but also its customers, investors, media, business partners and the wider community.

There are also clear benefits of CSR to HRM and companies need to recognise this. However, in order to maximise the benefits for all parties involved, engaging and integrating employees in the process is crucial.