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How CSR Improves Employee Well-Being and the Bottom Line

Organizations that create Corporate Social Responsibility programs that are meaningful to their employees and aligned with the organization's values can see direct links to achieving business goals.

CSR programs attract new talent as well as retaining employees by keeping them engaged and stimulating productivity. These employee outcomes lead to direct impacts on bottom line results through cost savings and of course, contribute to bettering the world through supporting social and environmental issues.

Corporate Social Responsibility (CSR) has become part of a bigger piece of the organizational toolkit for attracting and retaining talent and being a competitor in the market. Traditionally, organizations have implemented social responsibility programs as a way to be an attractive brand for customers, but it is becoming increasingly clear that organizations need to adopt these programs for their employees, as well. Today’s employees want to work for organizations whose values align with their own and will support causes they care about. Organizations that support the four main categories of CSR – environmental, philanthropic, ethical, and economic – are becoming more attractive places to work, and with which to do business, both as consumers and vendors. If you haven’t read part one of this series, Corporate Social Responsibility: Doing Good is Good for Business, take a minute to catch up on the core principals of CSR and ESG (Environmental, Social, & Corporate Governance) in today's market.

In order to attract and retain talent, as well as keep employees engaged to levels that will improve their work, leaders and organizations need to develop CSR programs that will not only look good on paper, but will actually “do good” for the world. Further, at Sia Partners we believe that creating meaningful and authentic CSR initiatives is an inherent responsibility of organizations to provide for their employees’ well-being.

The Impact of CSR on Business

While the triple bottom line – measuring social and environmental impact, along with profits – may be the ultimate goal for some, it’s natural to ponder how CSR will actually impact profitability for an organization: does doing good for people and the environment actually translate to profitability or financial gains? In fact, it can. Strong CSR commitments and policies within organizations are becoming competitive advantages in attracting, engaging and retaining employees, which has direct impacts on meeting business goals and becoming a more attractive organization in the market.

A study done by the Lewis Institute for Social Innovation at Babson College shows that businesses with a commitment to CSR see productivity increase by 13% and turnover reductions of up to 50%. This is meaningful because engagement and retention are significant financial drains across the US. A 2013 Gallup study showed that only 13% of employees are engaged worldwide, making engagement the lowest it has ever been, and the US economy is estimated to lose around 450 to 550 billion USD annually due to decreased productivity from disengaged employees. Another set of research on attrition by the Society for Human Resource Management (SHRM) suggests that replacement costs can be as high as 50-60% with overall costs ranging anywhere from 90-200%, depending on how specialized the position is. Organizations wanting to slow or stop attrition, increase employee satisfaction and truly connect employees to their work and place of employment, are focusing on employee engagement strategies to support happier, more productive employees and are turning to CSR implementation to help address these real and significant challenges. 

CSR and the employee

In addition to contributing to higher productivity and lower attrition, CSR has a strong role in employee decision-making. Employees are realizing that they can choose to work for companies that complement their passions and social wellness. Organizations, in turn, are seeking CSR and employee engagement programs to meet this demand. A few facts that particularly stand out include:

Additionally, CSR can increase employees’ creative involvement, including generating new but practical ideas, originality, and creative problem-solving. In other words, when you provide opportunities for employees to contribute to their passions, they become more productive in the workplace.

Finally and unsurprisingly, CSR programs that include social well-being are being attributed to lower corporate healthcare-related costs. Employees with high subjective well-being have 41% lower health-related costs when compared with employees who have lower well-being. In a firm with 10,000 employees, for example, that disparity can cost the firm nearly 30 million USD

All of this adds up to a compelling argument, financially or otherwise, for organizations to invest in a strong and outward-facing CSR strategy that helps counter the significant costs associated with attracting, retaining and supporting employee well-being.

What does this mean for leaders?

Leaders across all industries should consider how to implement holistic CSR programs within their organizations. It is vital that leaders take this seriously; creating initiatives that promote engagement and retention of employees not only reduces costs for businesses which can increase profits and help the bottom line, but will empower employees and support societal and environmental well-being. 

If this topic resonates with you and you are ready to take steps to incorporate doing good into your business, please don't hesitate to get in touch. Our Consulting for Good program is committed to helping organizations around the world consider social responsibility and impact when tackling the tough challenges we all are facing today.


Curious to learn more? This piece is part of a three-part series on corporate social responsibility and employee well-being. Find Part 1: Corporate Social Responsibility: Doing Good Is Good for Business and Part 3: Effective CSR in Practice to learn more about CSR and how you can implement successful CSR practices into your organization to promote employee well-being.

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