“Creating a strong business and building a better world are not two conflicting goals- they are both essential ingredients for long-term success.” - Bill Ford
Over the years, Corporate Social Responsibility (CSR) has become a buzzword in the world of business. It is a type of business self-regulation, wherein companies take different initiatives to be socially accountable. The reason why businesses take different initiatives to support the environment, planet, its inhabitants and the society is that today’s customers are extremely concerned and interested in such subjects. According to a report, 77% of consumers are motivated to purchase from companies that are committed to making the world a better place, while 73% of investors state that efforts to improve the environment and society contribute to their investment decisions.
When consumers and investors both are more inclined towards companies that shoulder effective CSR initiatives, isn’t it obvious for CSR to become one of the top interests of most business organizations. When it comes to the type of business organizations that can benefit from CSR, we cannot help but name all types of businesses including small businesses.
Small businesses can benefit a great deal by shouldering innovative and impactful Corporate Social Responsibility initiatives. The following points are dedicated to elucidating the same:
7 Reasons why adopting a CSR strategy is crucial for small businesses:
Attracting good talent:
Small businesses have a challenging time attracting good talent. Most candidates prefer to get hired in well-established companies. They believe that such companies have better people processes and are more beneficial for their career advancements. As startups need talented and passionate people to grow and flourish, this challenge acts as one of the biggest obstacles on their path to success. But, good Corporate Social Responsibility initiatives can help them overcome this challenge and attract great talent. According to research, CSR can play an effective role in attracting potential employees by enhancing organizational reputation and attractiveness. Candidates prefer to work for a higher purpose over money. This is because giving meaning to our lives is one of the greatest aspirations we all have as human beings. So, if small businesses can help potential candidates find a higher purpose, they are likely to attract top talent.
Improves employee engagement:
Employee engagement is the precursor of an organization’s success in the competitive world of business. According to Gallup, it offers multifarious benefits such as increased productivity, profits, and reduced absenteeism. With all these massive benefits, an engaged workforce can act as a game-changer for small business organizations and help them get established in the competitive world of business. However, cultivating an engaged workforce is not an easy task. It requires persistent effort and the application of effective employee engagement strategies. Further, a report presented by the National Center for Biotechnology Information has highlighted that CSR is one of the best ways to enhance employee engagement. It enables employees to bring their whole selves to work which promotes their engrossment in the different tasks that they have to do. By involving employees in impactful CSR activities small businesses can improve their engagement levels and pave their way towards maximizing organizational productivity, performance, and output.
Reduces employee turnover:
According to a study, companies engaged in CSR can reduce staff turnover by about 50%. Isn’t it astonishing? As high employee turnover involves financial costs and money lost due to impaired productivity, it is extremely undesirable for all business organizations, especially small businesses. Moreover, the time and cost involved in replacing old employees and training the new ones can take a huge toll on the performance of small businesses. This means that small business owners should take proper measures to ensure low to negligible employee turnover. As mentioned above, Corporate Social Responsibility initiatives can help them a great deal in this regard.
Improves reputation and increases sales:
Businesses that are involved in innovative Corporate Social Responsibility initiatives make it into the headlines of different newspapers, magazines, TV shows, and publications. After all, these platforms and channels are always eager to get fresh, interesting updates and deliver them to their audience. As people get to know about the efforts that a particular company is putting towards protecting the planet or uplifting society, they develop an instant inclination towards it. This way, through genuine publicity small businesses, can improve their reputation and increase sales. Seems great, isn’t it?
Earning customer loyalty:
“Loyal customers, they don’t just come back, they don’t simply recommend you, they insist that their friends do business with you.” These words by Chip R. Bell highlight the importance of customer loyalty for an organization. Loyal customers continuously make purchases from a company, use its services and thus, help it thrive. Along with this, they also help it expand its business through word-of-mouth marketing. Further, a company with a huge base of loyal customers climbs the ladder of success in no time. For small businesses, earning customer loyalty can skyrocket their growth, popularity, and sales. Research has shown that one of the surest ways through which they can earn customer loyalty is by adopting an effective CSR strategy.
Most small businesses need investors to grow and thrive. But, attracting suitable investors and retaining them is one of the most arduous tasks for small business owners. The good news is that Corporate Social Responsibility initiatives can make this arduous task easy for them. It can help them attract investors and lead their business ahead. According to a survey, 73% of investors state that efforts to improve the environment and society contribute to their investment decisions. If a small business adopts innovative and impressive corporate social responsibility initiatives investors are more likely to make investments in it.
Enhances employee happiness:
Employee happiness plays an important role in deciding the destiny of a company. When workers are happy they serve the organization in the best possible way. They go the extra mile to contribute to increasing the growth and success rate of the company. On the contrary, unhappy employees do not feel like contributing to the growth of the organization. They are only concerned about their paycheque. If most workers working with the small business are unhappy, how can it succeed? So, small business owners must focus on enhancing employee happiness and CSR initiatives can help them in this regard. But, for CSR to increase employee happiness small businesses must choose those activities that are in alignment with the interests of their employees. As workers participate in these activities, they feel extremely happy inside. This happiness encourages them to give their best performance at work.
As discussed throughout, adopting a CSR strategy can be immensely beneficial for small businesses. Further, to receive the best benefits from the implementation of CSR practices, small businesses should try to create CSR strategies that align with the interests of their employees.