More millennials are attracted to join and stay loyal to companies that are a force for having a positive influence on their community.
Today’s young professionals want more from their employer than just a paycheck. They seek fulfillment from their work and to be part of a company committed to making a positive contribution to the communities they serve by “giving back” through nonprofit organizations.
Studies by Stanford and the Satell Institute bring to light how it is in a company’s self-interest to encourage their employees to engage in Corporate Social Responsibility activities.
Learn from Stanford research
A study from the Stanford Graduate School of Business1 revealed that 90 percent of MBAs from business schools in Europe and North America prefer working for organizations committed to Corporate Social Responsibility.
Findings from the 2015 Cone Communications Millennial CSR Study point out that millennials are prepared to make personal sacrifices for creating an impact on issues they care about, whether paying more for a product, sharing products rather than buying or taking a pay cut to work for a responsible company.
“CSR is not isolated in a corporate structure. It goes much deeper than that. It connects to core functions and business units,” says noted author and CSR expert Professor Peter Frumkin of the University of Pennsylvania. “CSR is great for employee recruitment, retention and motivation. Companies that have progressive CSR policies do much better in a range of HR challenges.”
Community engaged employees add market value to their companies
While ethics and integrity are winning over financial rewards for millennials (who comprise the majority in today’s workforce and will make up three-quarters of workers by 2025), additional research shows it is financially rewarding for their employers. On average, every employee who participates in corporate community engagement activities adds $2,400 of value to the company because of decreased turnover and increased employee engagement.2
As an example, for the international furniture giant IKEA, CSR has been a crucial part of the company’s long-term recruitment strategy. Historically, IKEA has focused its CSR efforts toward environmental and international development concerns on a global scale. Recently, IKEA started engaging on the local level through the recently established Kamprad Family Foundation (KFF).
A Satell Institute commissioned study, conducted by Professor Fredrik O. Andersson of the University of Wisconsin-Milwaukee, brings to light how KFF’s commitment is making the community it operates in better.
The community is Älmhult, the small town in southern Sweden where IKEA founder Ingvar Kamprad began what is today the world’s leading home furnishings brand. IKEA’s CSR initiatives had frequently involved large global partners who are located and operate far from Älmhult. KFF, on the other hand, is situated and mandated to work locally and offers opportunities for interested and motivated IKEA employees to seek out and engage with various KFF projects.
Improving your standing with your community and your employees
By taking on matters such as improving the quality of life of the elderly and fueling rural entrepreneurship, IKEA, through KFF, is making life better for people in Älmhult while connecting strongly to young professionals seeking to be associated with a company that shares its values and takes responsibility for improving the lives of people in the community it serves.
Taken together, KFF represents an effort to give back to the causes that long time ago created the foundation for IKEA’s existence. Ultimately, IKEA and its founder Ingvar Kamprad are buying into the idea that when a company actively works with and protects its community, it can realize a substantial return on investment. Such reputation capital, while being an intangible asset, can function as an accelerator for future investments and increase the attractiveness of a company among internal as well as external stakeholders. These corporate winning topics will be explored in greater detail in upcoming Weekly INsights from the Satell Institute.
1Huffington Post, 02/03/2017
2Brian Kropp, “Maximizing the Effectiveness of Corporate Volunteer Programs.” Presented during the Corporate Board Leadership Council, July 2014.