By Phoebe Krueger, Vice President, Corporate Social Responsibility Manager
Corporate Social Responsibility (CSR), broadly defined, is a company’s management of the impact it and its employees have on all aspects of society from economic and social to environmental. Implementing such a program is a critical step toward providing benefit to the community, but it can also greatly benefit the company. Project ROI, a report about the potential returns CSR programs can deliver, illustrates the strong link between CSR and bottom-line focused business success. We have narrowed down the areas of impact to four key areas within an organization.
Human Resources: Companies that have a robust CSR program attract and retain more talented employees than those who don’t. The research and findings of Project ROI provide startling proof: well-managed CSR programs can reduce employee turnover by 25 to 50 percent. This translates to huge savings in terms of money your business would have to pay in advertising; interviewing; screening; hiring and onboarding new employees to replace departed ones. Especially in today’s tight labor market, the savings a company can realize in employee retention can often pay for the entirety of a good CSR program.
Marketing and Sales: In a competitive landscape, choices matter. Customers make choices based on many factors like price, service and quality. They also make choices based on community impact. There is often a conscious, or even subconscious, values alignment when someone decides to enter into a business relationship. As a company, your CSR activities become a major part of telling your story to external audiences in order to help them make an informed choice. According to Project ROI, customers like to do business with companies that align with their values and are making a difference in their community. CSR provides a real and tangible benefit to your organization because it is a real and tangible benefit for your customers. Finally, customers who choose to do business with you because of your impact in the community often become some of your most ardent – and public – supporters and are more than willing to help tell your story.
PR and Brand: Your reputation has value. In fact, many companies incorporate on their quarterly balance sheets a line for goodwill and intangible assets – this is an estimate of the value of their brand and reputation. Here, according to Project ROI, strong CSR programs can account for seven to 11 percent of a firm's brand and reputation, making this a sizable asset worth protecting. For organizations that do not currently have CSR programs, implementing these programs can add value to their businesses.
Investor Relations: Investor confidence increases when organizations invest in and manage intangible assets like strong CSR programs. These attributes demonstrate an integrated approach to innovation, talent and reputation. They also strengthen confidence in future performance of management, corporate culture, competitive advantage and employee engagement. A well-managed CSR program can be compared to an insurance program that protects intangible assets and investor confidence.
The case for corporate social responsibility as a bottom-line focused strategy is becoming increasingly clear, and what used to be known as a "nice thing to do" in the business community is becoming a "must do." In fact, a quality CSR program is a true value-add toward growing the three most critical aspects of any business – customers, employees and investors.
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