What are CSR and ‘employee engagement’

There seem to be more buzz words around us than we could possibly absorb.  Webster recently added ginormous and smackdown to the dictionary.  How do you sift through the new concepts and decide what will bring you or your business values?

There are two business concepts that are gaining wide recognition that are worth your time to understand: corporate social responsibility (CSR) and employee engagement. I couldn't find the definition for either term in Webster's – so if you are familiar with these terms you are slightly ahead of the curve.

Corporate Social Responsibility

Perhaps the reason the term CSR doesn't appear in the dictionary is that it also known by a variety of other names: sustainable business, triple bottom line and corporate citizenship to name a few. 

Generally, CSR is understood to be the way firms integrate social, environmental and economic concerns into their values, culture, decision making, strategy and operations. Done in a transparent and accountable manner it helps establish better practices within a firm, create wealth and improve society. 

Michael Porter, a professor at Harvard Business school, sums up the essence and value of CSR. “There is no way to avoid paying serious attention to corporate citizenship: the costs of failing are simply too high.... There are countless win-win opportunities waiting to be discovered: every activity in a firm’s value chain overlaps in some way with social factors — everything from how you buy or procure to how you do your research — yet very few companies have thought about this.

“The goal is to leverage your company’s unique capabilities in supporting social causes, and improve your competitive context at the same time. The job of today’s leaders is to stop being defensive and start thinking systematically about corporate responsibility.”

What does this mean to small businesses who feel an urge to be more sustainable, but don't know where to start or get intimidated by the perceived costs? Merely understanding the concepts, terms and definitions related to social responsibility can make us see everyday processes through a new lens.

Putting a recycling box or compost bucket beside the garbage, modifying procurement processes to include relevant sustainable requirements or recognizing employees for community contributions are all small examples that are common. 

The ISO recently came out with a voluntary international standard: ISO 26000 Guidance for Social Responsibility.  The document provides definitions, principles and trends for seven core subjects and is useful for all types of organizations, regardless of their size.  The seven core subjects are: Community Involvement and Development, Human Rights, Labour Practices, The Environment, Fair Operating, Practices  Consumer Issues and Organizational Governance.

Reflecting on what you know about the subjects and considering how it can be applied to your sphere of influence is a good start. I have heard many excuses for why a business hasn't initiated CSR – but I haven't heard anyone express regret for actually doing it. 

Employee Engagement

I come from a corporate background, where employee engagement is regularly measured and is part of the water cooler chatter. The term is not as common in the small business sector, perhaps because employee engagement is generally higher at small companies. However, understanding the concept and how to cultivate it can reap your business many benefits.

Employee engagement describes an employees' emotional and intellectual commitment to their organization and its success. Engaged employees experience a compelling purpose and meaning in their work and give their complete effort to advance the organization's objectives. Alternatively, it can be defined as an employee's drive to use all their ingenuity and resources for the benefit of the company.

Having engaged employees results in higher productivity, better customer service and more innovations. Conversely, the most costly product of low engagement is high turnover.

The cost of replacing an employee is pegged between one and three times their annual salary depending on their skill level. The cost of a disgruntled employee servicing customers or being lazy at work is difficult to measure but is easy to imagine.

There are many factors that drive engagement and there are many resources out there to measure employee engagement and help raise it. Understanding what drives engagement is a complex science, but some of the factors are: involvement in decision making, access to appropriate training, the organization's concern for people's well being and respectful communication.

In a nutshell, raising employee engagement is achieved by doing whatever is required to make someone feel valued and involved in their role.

Together . . .

The two concepts defined here are distinct, but they are entwined in real operations. Effective CSR practices often raise employee engagement and conversely, firms with high engagement may have innovative CSR processes because the employee's care so much about their employer's ongoing success. 

Effectively managing CSR and employee engagement is proven to take your company operations to a higher level – in terms of financial success and long term sustainability.

Perhaps most importantly, these concepts aren't reserved for large corporations, small businesses can especially benefit from paying attention to them.

To read this in the Kamloops Daily News, follow this link: http://www.kamloopsnews.ca/article/20110601/KAMLOOPS0304/110539946/-1/kamloops/what-are-csr-and-8216-employee-engagement-8217