In the second of a new series of informative articles explaining the rise of CSR and where HR fits into its evolution, Article 13's Paul Toyne looks at where HR fits into the picture.
Within business, Corporate Social Responsibility (CSR) is managed in a variety of different places. Large FTSE 100 companies have dedicated teams overseeing CSR and their names vary reflecting the different emphasis companies place on it. For example, the bank HSBC Holdings has a community unit that is within corporate affairs.
Last year, a survey of UK businesses active in CSR found that less than a fifth had teams dedicated to the function. Over 80% placed CSR in public relations and HR accounted for a quarter. However, the topic of CSR is becoming a must for HR because of the growing recognition that staffing is an area of risk to business. This link of risk and CSR is fundamental relating it to the business and as this article discusses a key driver for HR involvement
High staff turnover, loss of key employees at critical times, the high cost of recruitment and the training of new staff can all damage a business. CSR strategies and programmes can help manage this risk by creating an environment where staff can enjoy their work and where they can feedback concerns about the company’s behaviour so action can be taken - for example, the identification of illegal workers in the supply chain.
The recognition of the value of staff to an organisation is one of benefits from CSR as it is not just about engaging with external audiences. Moreover, it is about how you interact with your staff. Increasingly businesses are realising the importance of employer brand. Just like other stakeholders, employees expect certain things not just a salary from their employer.
Staff members want to feel they can identify with the company. Employer branding is about making sure that employees feel good about the place they work. They can then be ambassadors for the company and that ‘feel good factor’ can permeate out to others, notably customers and clients. For these benefits to be accrued the organisation needs to be CSR compliant (see note 2 below for more on this).
The role of HR
In many cases the board may have developed corporate policies that cover a range of issues, including CSR, but no one ensures they are adhered to, checks the staff awareness, or assesses their impact. It may be that the board’s present mission, objectives and values do not reflect the values of staff or expectations of customers. Arguably, HR is best placed to engage staff in these issues.
HR can play an important role in developing the process where the business objectives are assessed and values re-aligned to match them with staff expectations. There are many ways this can be done:
- Workshops to engage with staff and promote the exchange of real life experiences.
- Develop interactive intranet sites that show case examples of good practice, or build in opportunities for promotion of good practice at staff meetings.
- Review company policy and procedures to ensure values are consistent – procurement, recruitment, training, appraisals and exit interviews.
- Consult and involve staff more in the running of a business.
- Provide feedback questionnaires for employees, customers and suppliers – to show the organisation is living its values.
HR should also play the gatekeeper role in the development and monitoring of staff policies and practice. It needs to be asking questions such as: ‘Does the business have a social responsibility policy or an environmental policy?’ and ‘How does the business ensure that these policies and the company’s values drive the way the company does business?’ These values need to be reflected in staffing issues – recruitment, training, appraisals, and in other processes such as procurement. HR has an important role to play in ensuring this happens.
Future trends in CSR for HR departments?
CSR is here to stay, how and where it is displayed with business will depend on the board and other external factors. However, for CSR not to be merely an add on but to be actually embedded as part of the business - reflecting the way it does business, its culture and values - then HR will need to play its part.
HR departments may have a natural ally in their financial directors who are beginning to recognise staff as an area of intangible risk. FDs should be prepared to invest to manage this risk and create an employer of choice which delivers benefits to the bottom line in a number of ways from improved staff retention to improved work performance through more motivated staff.
Note 1: How HR can make the case for CSR ownership.
Questions to ask the board or senior management team.
- Do we have CSR policies? Do our company values fit with our business objectives?
- Are our staff motivated and proud to work at our company?
- Do we have high staff turnover? Do our costs of recruitment need to be reduced?
Making the business case – the benefits for championing CSR in HR
- Staff pride in the company they work for
- Improved staff motivation leading to improved work performance
- Encouragement of innovation
- Reduced staff turnover - savings recruitment and training costs
- Reducing risk within business – from suppliers, staff, through to customers
- Increased profitability
Note 2: Is your organization CSR compliant?
Despite the wide scope of CSR there are some simple things that can be done to identify the way your organization conducts its business, for example:
- Does your organization have social and environmental policies? If yes, are staff and suppliers aware of them?
- Are you aware of the codes of practice, guidelines, indices that are relevant to your organisation? What standards cover most aspects of your organisation and are they universally used by your industry?
- Have you carried out an audit of your employees (and supply chain) activities to scope areas of opportunity and risk for your organisation?
This article was first published in February 2004 on HR Gateway. Reproduced with the permission of HR Gateway, February 2004.