HR Becomes Key Player in Corporate Social Responsibility

By Joanne Sammer Jan 22, 2008
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As more companies embrace corporate social responsibility (CSR), they are looking to human resource executives to play a major role in these initiatives.

“HR already plays an important role through recruitment and learning,” says Jim Maurer, a partner with Grant Thornton LLP in Chicago. And that is only going to increase. “The new generation of recruits wants to be part of a company that is socially responsible, and they want the opportunity to take part in socially responsible initiatives,” he says. “They expect companies to be socially responsible and they want to know what the company is doing in that area.”

Maurer points to a 2007 Grant Thornton survey (see box, below) as evidence of HR’s prominent role in CSR now and into the future. Indeed, the findings suggest that CSR can be a significant way for HR to positively affect company performance.

Executives: Corporate Responsibility Can Be Profitable

In June 2007, BusinessWeek Research Services, in partnership with Grant Thornton, conducted a national survey that showed U.S. companies plan increased investment in corporate responsibility programs.

The survey of 500 executives from 159 U.S. companies revealed more than 75 percent believe that corporate responsibility initiatives can enhance profitability, and 77 percent expect corporate responsibility to have a major impact on business strategies over the next several years. Moreover, 64 percent of these executives felt that HR should take a leading role with social initiatives.

Other highlights from the survey:

    • 19 percent of surveyed companies report having a single person in charge of all their corporate responsibility programs.

    • 68 percent say they expect environmental responsibility reporting to be mandatory within the next five years.

    • 70 percent foresee increased government regulation for environmental responsibility in five years or less.

    • 62 percent believe that pressure to pursue corporate responsibility programs will come chiefly from consumers (45 percent) and investors (21 percent).

    • 64 percent believe that the HR department should take the lead on social programs, while 50 percent say operations should be in charge of environmental initiatives and 57 percent feel that finance should be responsible for economic responsibility programs

The three greatest benefits of enacting corporate responsibility programs, executives said, were that they:

    • Improve public opinion.

    • Improve customer relations.

    • Help attract/retain talent.

But what does CSR look like in practice? The elements of CSR differ from company to company. Some emphasize philanthropy, while others take a more holistic view. Here are details of how three companies have made CSR part of their operations:

Customer-Driven CSR at Sun Microsystems

It is not only employees who expect companies to be socially responsible. Customers also have that expectation. In fact, Marcy Scott Lynn, CSR program manager with Sun Microsystems in Santa Clara, Calif., notes that the company’s customers have been demanding greater CSR from Sun and their other vendors. “Our customers demand a higher level of accountability with regard to social responsibility,” she says.

Sun’s CSR initiative involves everything from its products to its operations to how and where its employees work. “CSR at Sun covers how we make money, as well as what we do when we make money in terms of philanthropy,” says Lynn. For example, the company publishes its monthly energy use and related carbon dioxide emissions for its major U.S. facilities and communicates the energy requirements of its various products. The company electronically also publishes an annual CSR report.

Lynn emphasizes, in particular, the key role HR plays in CSR at Sun. “HR has a large tactical role because one of the largest primary audiences for CSR-related communication is employees,” she says. For example, the CSR program recently partnered with HR to incorporate discussions of CSR into the orientation for new employees. “We want to make sure new employees are getting CSR information and that the importance of CSR is emphasized during orientation.”

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The HR team makes sure the importance of CSR
is emphasized during employee orientation
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This emphasis on employee communication is crucial in Lynn’s opinion because employees are at the front lines of the company’s efforts to weave CSR into the fabric of its operations. For example, with customer privacy a key element of CSR, it will be employees and their actions that determine how well the company delivers on its promises to customers in that area.

“We want employees to understand CSR and their role in achieving CSR-related goals,” says Lynn. “They need to understand how every job is a CSR job.” To that end, Lynn is working with HR to make sure HR considers CSR when evaluating whether potential recruits will be a good fit for the company.

Community Involvement at Ipswitch Inc.

For Lexington, Mass.-based Ipswitch Inc., CSR has a heavy emphasis on philanthropy. For the past 10 years, the company has donated 5 percent of its annual profits to charities in its communities. “We were interested in doing something for the community and sustaining it,” says Roger Greene, the company’s president and CEO. “The community relations aspect of giving makes us a stronger company and better able to recruit and retain talent based on our values.”

This activity provides opportunities for the company’s 550 employees to get involved in local charitable organizations. For example, the company supports an organization that provides training and education to young people who have few or no work skills. The company provides internship opportunities for the program, and its employees get involved by giving lectures during the program’s training sessions.

Greene notes that each company needs to approach CSR in a way that meshes with the company and its goals and values. “It is important to take some time to figure out what you want to do in order to get customers and employees more engaged in the company,” he says. For example, Ipswitch tied product sales in the U.K. to promised charitable donations for needy children. As a result, sales went up significantly and the company was able to make a sizable donation.

CSR at Gentle Giant Moving Co.

Of course, CSR is ultimately less about specific programs than it is a way of doing business. But it can take some time to achieve that.

For Gentle Giant Moving Co., a moving and storage company in Somerville, Mass., CSR has been 27 years in the making. “We were founded on CSR,” says Ryan Falvey, the company’s vice president of organizational development. “The goal of the founder was to change the experience of moving to one that is enjoyable and stress-free. To do that, we need motivated and engaged employees to perform that role.”

Therefore, the company’s CSR effort begins by focusing on hiring exceptional people who have the energy for hard work and learning on the job. The company follows up by providing training programs for employees that focus on taking care of the customer. Falvey notes that this training focuses half on technical moving skills and half on softer skills, such as effective communication, decision making and problem solving.

At the same time, the company does pro bono moves for local charities and homeless shelters. “We make sure all of our staff do a pro bono move during their first year,” says Falvey. “We want to make sure that our staff want to give back to the community.”

This approach pays off in customer loyalty with 85 percent to 90 percent of the company’s business coming from repeat customers. It has helped keep turnover low, with 50 percent of the staff having been with the company for at least five years. That statistic is particularly impressive because the company hires about a third of its workforce, primarily college students, on a seasonal basis.

Joanne Sammer is a New Jersey-based business and financial writer. Her articles have appeared in a number of publications, including Business Finance, Consulting, Compliance Week and Treasury & Risk Management.

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