A new study from the Kenexa High Performance Institute, a division of Kenexa (NASDAQ: KNXA), a global provider of business solutions for human resources, shows that organisations that are genuinely committed to corporate social responsibility (CSR) substantially outperform those that are not. They also have a higher level of employee engagement and they provide better customer service.
The results of the survey of 30,000 employees in 21 countries, which examined their views on corporate responsibility and its impact on their organisations, are available in a free white paper, entitled Assessing Corporate Responsibility. Is it Good For Business?
Dr Brenda Kowske, research manager at the Kenexa High Performance Institute, who co-authored the white paper with her colleagues Anne Herman and Susan D’Mello, said: “Our study shows a statistically significant relationship between corporate responsibility and organisational success. Employees who work in organisations that have a greater sense of responsibility towards their communities and environment, both ecological and social, have an engagement level that is four times higher than it is for employees who work in a low CSR culture. We also found that companies that prioritise CSR have a considerably higher rating for providing excellent customer service.”
Through an analysis of the financial metrics of 175 companies, the research reveals that those organisations that were most committed to CSR reported an average return on assets that was 19 times higher than the average of those least committed to CSR (a gain of 4.83 percent, against a mere 0.25 percent).
When analysing the total shareholder returns of these companies over the three years from 2007 to 2009, the researchers found that many of the organisations had reported a financial loss. However, low-scoring CSR organisations lost, on average, 11 percentage points more than high-scoring CSR companies.
“There is now a need to expand the body of research into CSR to further explore and understand the relationship between CSR and organisational success,” said Dr Kowske. “For example, do CSR actions actually produce these tangible business benefits or do highly successful companies simply have more resources to devote to CSR, creating a positive cycle? Whether they do it to manage their public image or because it’s the ethical and right thing to do, one thing is certain: organisations in every industry in all of the major economies around the world are now paying heed to the notion of corporate responsibility.”
Assessing Corporate Responsibility. Is it Good For Business? can be downloaded free.
Editor’s notes: The Kenexa High Performance Institute (KHPI) has been measuring corporate responsibility and its dividends for over two decades. This latest study was conducted in 21 countries, including Canada, China, Brazil, France, Germany, India, Italy, Japan, Russia, Spain, the United Kingdom and the United States.
Kenexa® provides business solutions for human resources. It helps global organisations to multiply business success by identifying the best individuals for every job and fostering optimal work environments for every organisation. For more than 20 years, Kenexa (kenexa.com) has studied human behaviour and team dynamics in the workplace, and has developed the software solutions, business processes and expert consulting that help organisations impact positive business outcomes through HR. Kenexa is the only company that offers a comprehensive suite of unified products and services that support the entire employee lifecycle from pre-hire to exit.