Companies start corporate social responsibility initiatives for a variety of reasons.
At the core of all of them, however, is the idea that it's possible to do well by doing good. In fact, not only is it possible, it’s expected—by consumers, stakeholders, and even job seekers. Soon, companies may find they have a difficult time doing well if they are not doing good.
In addition to making a meaningful difference in the world, corporate social responsibility offers significant benefits for companies who engage in them. Corporate social responsibility programs can encourage innovation, lower operating costs, assist with brand differentiation, inspire employees, and engage consumers.
Honestly, if corporate social responsibility can do all that, companies can’t afford not to at least give it a try!
For those who've been following the rise of corporate social responsibility over the last decade, it’s likely accepted as common knowledge. But many companies aren't seeing any sort of return on investment with their corporate social responsibility initiatives.
Does that mean corporate social responsibility doesn’t actually provide these benefits? Absolutely not. But it does mean that companies aren't actually measuring their corporate social responsibility impact.
If you want to see a return on investment, you have to actually measure your results. We listed several benefits of corporate social responsibility above. For the purpose of this post, we’re going to focus on employee attraction and retention, cost savings related to new hires, and brand image.
Employee Attraction and Retention
In less than five years, millennials will make up more than half of the workforce. That means if you want to attract the best and the brightest new talent, you're going to have appeal to millennials.
While there are always a number of factors that influence job seekers, corporate social responsibility is a significant consideration for millennials. In fact, 72% of millennials said it was important to their happiness to have a job where they felt they could make an impact. How important? Well, over 60% of millennials would accept a voluntary pay cut to work for a socially responsible company.
It’s probably fair to say it’s pretty important.
Attracting great employees doesn’t amount to much if you can’t keep them. When you create corporate social responsibility programs, one of the most easily measured benefits is an increase in employee retention. Chances are your human resources department is already collecting data and statistics on attrition. When it’s time to see a return on investment, look to that data. Companies that begin successful corporate social responsibility initiatives can see a 3 to 3.5% reduction in their annual quit rate.
Additionally, companies can see an increase in employee engagement up to 7.5%. Any increase in employee retention will naturally lead to cost savings.
Cost to Recruit and Train Employees
Finding and hiring new employees is expensive. Anyone who ever has had to take on that task knows what we're talking about.
From posting the job all the way through the onboarding and training process, there’s a cost associated with every single step of bringing on someone new. Just how much does it cost to replace the people who quit? While the number varies across industries, most companies can expect to pay 50 to 60% of an employee's annual salary in direct replacement costs alone. When other costs associated with turnover are added in, the total can be as much as twice the employee’s annual salary!
Unlike employee retention and training costs, brand image and awareness can be quite difficult to measure. But just because it’s difficult doesn’t mean it can’t be done.
With tools like Google Analytics, you can track how people reach your website. People who type your URL directly into the address bar are obviously familiar with your brand.
You can review search volume data to see how many searches are being done on your brand name. And don’t forget social media!
When you listen in to consumers via social media, you get a clear idea of their familiarity with and opinion of your brand. Once you know to track these metrics, it’s easy enough to start collecting the data.
If you're not measuring the impact of your corporate social responsibility programs, there's no way to see your return on investment. Once you know where to look, you are one step closer to being able to really see what corporate social responsibility can do for your company. While you can pull this data and compile it into a report when needed, it’s going to take some time and likely be a bit cumbersome.
To be honest, that’s probably a big reason companies aren’t measuring these metrics already. But there’s actually no need to remake the wheel when you want to measure your return on investment with corporate social responsibility. A comprehensive, intuitive corporate social responsibility tool, such as WorkHero from Encast, can ensure this information is tracked and easily accessible. If that sounds too good to be true, why not contact us and find out more about corporate social responsibility solutions today?