Today’s working generation has a fresh new attitude towards life and work that centers on a feeling of shared responsibility in a diverse, multi-ethnic and connected world, with a common global heritage. As an example, devastation caused by a fire, cyclone or earthquake in another state or another part of the world is seen as a shared problem irrespective of boundaries, and giving, volunteering and philanthropy play a central role in people’s personal and professional lives.
To attract, motivate and retain today’s talent, corporations must embrace employee giving and volunteering programs for the following five reasons:
#1 Employees Are Asking For It
A recent article in The Wall Street Journal – titled “I Don’t Have a Job. I Have a Higher Calling.” – pointed out that employees want their time at work to be meaningful to themselves and to society. Today’s mainstream workforce wants to make the world a better place in every little way they can… and seek employers that have similar values and strongly support philanthropic causes at the highest levels. In a survey of 15,000 ‘Class of 2014’ graduates, most wanted jobs with companies that make a difference in the world and give employees opportunities to meaningfully contribute to society… so corporations are increasingly implementing corporate philanthropy programs to attract talented employees.
#2 To Reduce Employee Turnover and Recruitment Expenses
Talented workers are picky about the companies they work for, and quick to switch jobs if they feel dissatisfied with their employer’s work culture, ethics and approach to philanthropy. Data from the Bureau of Labor Statistics shows that millennials typically change jobs every 18 months and the average employee turnover rate across all U.S. industries is about 15%.
A study by PwC showed that employees who are engaged at work are 87% less likely to resign than employees who consider themselves disengaged. Moreover, replacing good talent across typical American jobs ranges from about 16% to 30% and could go as high as 150% of the employee’s salary for top-level employees, according to a study by the Center for American Progress; and this is above the cost of finding, hiring and training replacements… so workplace policies that improve employee retention, such as employee giving programs, are key to retaining and engaging millennial employees, and reducing turnover expenses.
#3 To be Viewed as a Desirable Place to Work At and Attract Top Talent
With economic data pointing to a strengthening U.S. economy and an improving job market, hiring talent has gotten a lot more competitive and expensive. While bidding for talent is one way of doing it, a higher salary does not guarantee employment success. Instead, a corporation’s work environment, culture and values play a key role in influencing an employee’s job selection decisions – with companies facing a 21% increase in compensation to lure candidates who feel a company’s brand and reputation are unattractive compared to an 11% premium where candidates like a company’s corporate reputation, and nearly three in four candidates willing to accept a lower salary with the right company, per CareerBuilder.
Companies with strong workplace giving and volunteering programs create a sense of camaraderie and feel good factor that causes employees to recommend their workplace to friends, and helps corporations position themselves as attractive places to work at, for meaningful and long-term sustainable reasons.
A study titled “The Cost of a Bad Reputation” found that qualified job candidates have strong reservations about joining corporations with bad reputations. For example, half of those surveyed said they’d need more than a 50% pay-hike to move from a company with a good reputation to one with a bad reputation… and 76% said they would not join a company with a bad reputation even if they were unemployed!
#4. To Drive Revenue Growth and Increase Profitability
An article titled “Employees Who Feel Love Perform Better” (published in the Harvard Business Review) found a substantial increase in performance in a nurturing workplace environment. And a Gallup survey showed that companies with engaged employees typically report higher quarterly profits. When employees believe their employer actively supports their values, they feel a sense of workplace pride which translates into higher employee engagement and productivity, and drives up business growth, revenue, repeat customers and profits.
In December 2014, the Center for Corporate Citizenship (CCC) published a research report titled “The State of Corporate Citizenship 2014” that clearly linked corporate citizenship to business success and higher shareholder returns. Companies with integrated corporate citizenship programs saw a 2.2x increase in access to new markets and a 2.3x jump in employee retention. And companies with at least 4 years of corporate citizenship saw a 3x improvement in risk management and a 3.9x reduction in employee health costs. Overall, corporate citizenship translated into fewer sick days, lower corporate expenses, higher profits and overall business success, and lifted company shares.
#5. To Boost Brand and Corporate Reputation, and Increase Community Engagement Efforts
Active and well publicized involvement in social, environmental and higher causes goes far further in building core brand value than advertising, and is a lot less expensive. In addition to the benefits of employee engagement, consumers also reward caring companies with a “brand halo”. For example, a study by Cone Communications found that 90% of American consumers are more likely to trust and be more loyal to companies that back causes, and 82% said their purchasing decisions are influenced by companies that support social causes. So well intentioned and well executed workplace giving programs build corporate loyalty, brand respect and reputation – with employees, partners, local communities and other stakeholders.
In a nutshell, corporate giving is not just about being noble and selfless but has proven benefits such as attractiveness as an employer of choice, lower HR expenses, greater employee engagement and productivity, higher revenue and profits, and long-term brand and reputation development.