Corporate Cuts in NRA Discounts—The Right Strategic Choice or Not?

Allen Smith, J.D. By Allen Smith, J.D. March 9, 2018
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​When companies consider distancing themselves from the National Rifle Association (NRA) by ending discounts to NRA members, they need to ensure that it's the right strategic decision for their workforces.

Many companies have dissociated themselves from the NRA following the shooting deaths of 17 students and educators at Marjory Stoneman Douglas High School in Parkland, Fla., on Feb. 14.

After the massacre, NRA CEO Wayne LaPierre said that limiting access to guns as a reaction to violence is "completely ridiculous" and that there instead needs to be more school security, reported The Hill.

That prompted people who believe guns are a problem in American society to call for boycotts of companies associated with the NRA. Delta, Alamo, United Airlines and several other companies have all announced they will no longer offer discounts to NRA members.

Corporate leadership "will be more prone to accept social responsibility actions if there is data to support the actions," said Sylvia Washington, SHRM-SCP, director of employee relations for Greystar, a property management service in Seattle. "How will being socially responsible increase revenues, attract key talent, and improve market share and employee engagement?"

Distancing from the NRA

Delta announced Feb. 24 that it would discontinue discounts to NRA members traveling to the NRA's annual meeting. In response, Georgia lawmakers on March 2 voted to block a jet fuel tax break that would have saved the company $40 million, even though only 13 NRA members used the discount, according to The Washington Post.

"Even though it has an impact on profitability, it is commendable that the company is staying firm at this time, stating their ethics are not for sale," Washington said.

Delta ended its affiliation with NRA because it said it did not want to support a politically divisive group. "Our people and our customers have a wide range of views on how to increase safety in our schools and public places, and we are not taking sides," wrote CEO Ed Bastian in a memo to employees. "Our objective in removing any implied affiliation with the NRA was to remove Delta from this debate."

Other companies took similar actions to end partnerships and discount programs with the NRA, including Alamo, Allied Van Lines, Avis Budget Group, Chubb Insurance, Enterprise Holdings, First National Bank of Omaha, Hertz, Lockton, MetLife, National Car Rental, Paramount Rx, SimpliSafe, Starkey Hearing, Symantec, TrueCar and United Airlines, reports Time.

Dick's Sporting Goods announced Feb. 28 that it will stop selling assault-style rifles and bar the sale of guns to anyone under 21. Walmart then said it will stop selling firearms and ammunition to people younger than 21, noted CNN.

But FedEx resisted calls to discontinue its discounts to NRA members, according to Business Insider.

The NRA tweeted, "The loss of a discount will neither scare nor distract one single NRA member from our mission to stand and defend the individual freedoms that have always made America the greatest nation in the world."

Getting the C-Suite's Buy-In

Usually, the financial costs of responding to an ethical question, such as the loss of customers, top the C-suite's concerns, noted Deirdre Simmons, SHRM-CP, an HR consultant with NFP Insurance Services Inc. in Danbury, Conn.

HR should point out some of the potential indirect costs, she said. For example, if employees think the company should distance itself from the NRA and it does not, engagement could plummet, she said.

However, while some social actions, such as charitable giving, may be popular, taking a political position in the name of social responsibility is riskier, said Joyce Chastain, SHRM-SCP, a regulatory compliance consultant with The Krizner Group in Tallahassee, Fla. If company decisions are contrary to employees' personal beliefs, workers may leave, she observed.

"Some employees, customers and investors may applaud a company's stance on an issue, while others may see it as being politically correct or pandering or simply falling on the wrong side of the issue," said Marci Haabestad, SHRM-SCP, chief people officer for KeyPoint Government Solutions in Loveland, Colo. A negative reaction could hurt recruiting efforts, damage employee engagement and invite boycotts, she noted.

She said that employers should consider whether a stance will differentiate the company in a positive way from the competition and boost sales. "Few companies can afford the luxury of just taking a stance on social issues without first calculating the likely impact to the bottom line, and HR needs to be prepared to participate in that conversation," Haabestad observed.

If engagement surveys show a large percentage of employees want to work for a company that takes a stand, that would be useful information, said Patti Perez, vice president of workplace strategy with HR consultancy firm Emtrain in San Francisco.

"Our demographics are changing. … Employees are increasingly demanding that the companies they work for take stands on important social issues."

But a stance may please some employees, while "others may vehemently oppose it as counter to their own philosophies and deeply held beliefs," said Kelly Marinelli, J.D., SHRM-SCP, principal consultant with Solve HR in Boulder, Colo.

Messaging to Employees

If a company is going to take a stance on a political hot-button issue, it should carefully craft internal messages for employees about its position, Perez said.

Send out a video of the CEO explaining the company's commitment to its employees and the issue at hand, she suggested. Explain the decision-making process, "so employees know these decisions aren't done just as a publicity stunt."

 

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