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Stakeholder to Shareholder Alchemy: How HR Fosters/Nurtures Corporate Citizenship

Submitted by: Abhishek Ranjan

Posted: Jan 25, 2016 – 06:00 AM EST

Tags: csr, hr, corporate social responsibility


For a cause that is all about transforming communities and impacting people, it is only natural that Human Resources have an important role to play. In this post, I look at the mutually beneficial relationship that HR and CSR have now begun to share.

As it happens, a majority of Indian companies hold the HR function responsible for CSR. This seems only natural, given that the core of CSR initiatives depends on the deployment of the organizations human resources towards accomplishing the social goals laid out by the initiatives. Previously, HR have championed CSR – and vice versa – but as CSR comes into its own as an important – in some cases, mandated – function of the organization, they are beginning to diverge and be more exclusive. HR and CSR, in essence, had the same long-term goals: how to add the maximum value to the organization in the long run. Given their mutual focus on the human element of the organization, HR and CSR strengthened and supported each other. This brought about stakeholder value, to supplement the traditional shareholder value.

The divergence in HR and CSR is being driven by CSR integration models that bucket these functions in a variety of ways. The independent CSR integration models have two ways of manifesting this. HR in a leadership role sees CSR housed within HR, while HR in a consultation role sees CSR housed adjacently within a non-HR function.  Shared CSR integration models either disperse CSR accountability across teams or manifest CSR as an independent team or foundation. With the rise of stand-alone CSR teams, there has also been a corresponding swell in the demand for CSR professionals. In India, with the CSR mandate, executive reports are suggesting that this demand will surge about 50 to 60 percent thanks to the legislation. Immediately, there is likely to be some poaching from both NGOs and corporate houses to fulfil this need.

The estimated $2 billion CSR spend in India, coupled with Individual Social Responsibility (ISR), will have a ripple effect. Youth are embracing CSR like never before. Globally, more than 3.5 million LinkedIn members have indicated on their profiles that they would serve on a non-profit board or volunteer their skills. This is great news, given that employees are the backbone of successful CSR. Of course, investment and latitude from the company are important; however, the success of CSR programs relies hugely on the committed volunteerism of employees.  That’s why it is important to engage employees in such a way that they adopt a mantra of ISR. This way, employees invest their time and skills in community service actions that are supported and endorsed by all stakeholders.

From the ALS Ice Bucket Challenge to Giving Tuesday, we have begun to see more creativity in social engagement and awareness towards ISR. Corporates are looking to create sustainable ISR initiatives through their Corporate Citizens programs. I believe Corporates can encourage employees to become effective brand champions by creatively and effectively communicating Corporate Social Responsivity. This could give employees more reasons for pride and satisfaction in their organizations. A prominent industry poll found that 95 percent of those surveyed felt more engaged working for a company that gave back to the community. 83 percent of the surveyed group felt that a company’s commitment to social issues played an important role in determining where they chose to work. Significantly, 47 percent responded that they would consider changing jobs if their employer did not operate in a socially responsible manner. A recent Gallup report showed that only 13 percent of employees felt they were ‘highly engaged’ while 26 percent felt ‘actively disengaged’ at their workplaces. This is of particular relevance to the need for enhancing employee perceptions of workplace engagement.

CSR, as dependant as it is on employee participation, is a key area of focus for HR’s broader employee engagement practices. An employee volunteer program will involve employees in the development and implementation of volunteering initiatives. Ideally, programs could consider recognizing private volunteering, provide ad-hoc resources for supported volunteering, sponsor events and develop and organizational framework for volunteering opportunities. Side by side, or alternatively, Charitable Giving Programs for employees could engage employees with philanthropic initiatives through programs that empower employees to choose the charity for the firm, or direct funds to a personal charity. Organizations could also offer to match employee donations. Such moves would enhance CSR maturity indicators, covering engagement, activity and motivation proactively.  

As part of a broader set of goals for HR, CSR related employee initiatives can also be linked to performance appraisals. CSR can be integrated with learning and development through the orientation and probationary review processes. Job-specific or generic CSR training can also be merged with career path development and succession planning programs.  For CSR to be successfully integrated into workforce planning, key skill sets, competencies and gaps will need to be identified. Organizations would do well to incorporate CSR into employer brand and employee value propositions. Extending CSR into recruitment programs could be enabled by CSR-related questions in interviews, offer letters and Early Employee Contact. Similarly, exit interviews could also include a CSR angle. Organizations looking to integrate CSR into performance could declare their CSR goals in job descriptions, annual performance plans and team goals with the addition of a formal or informal reward system. Business units could be supported in developing performance evaluation systems that foster CSR behavior. Annual performance reviews could bring in a CSR focus.

As you can see, the ‘people focus’ in CSR goes well beyond the boundaries of the receiving community. CSR transforms the participating community as much. In my next post, I look at the bottom line: performance. Stay posted for my take on how CSR delivers value.   

The opinions, beliefs and viewpoints expressed by CSRwire contributors do not necessarily reflect the opinions, beliefs and viewpoints of CSRwire.

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