Strong link between employee engagement and CSR: Study

But millennials not as committed to cause as baby boomers
By Sarah Dobson
|Canadian HR Reporter|Last Updated: 02/22/2010

As a Calgary-based global energy company that does business in the Athabasca oil sands, Nexen is familiar with public disapproval. And yet, when employees were asked about their perceptions of the company’s corporate social responsibility (CSR), ratings were high — in tune with Nexen’s high engagement ratings — which helped land it on Hewitt’s 50 Best Employers in Canada list.

Among highly engaged workers, 86 per cent strongly agreed the company was socially and environmentally responsible. Among moderately engaged workers, the number was 71 per cent and among low-engaged workers, 60 per cent.

The same outcomes were seen among different job types, ranging from senior management to clerical support, and among several dimensions of CSR, such as customer relationships and environment.

Being a company “under attack” from many sources, Nexen vies to be open and honest and communication is crucial, said Jim Shaw, community affairs manager at Nexen.

“Even those who are working in those areas that have high controversy understand and know what’s going on,” he said. “Those global pressures, the stakeholder pressures, all come into effect here.”

Research provides proof

There is a strong correlation between employee engagement and employee views of their employers’ record on CSR, according to research by Hewitt and Canadian Business for Social Responsibility (CBSR). In looking at Hewitt’s Best Employers in Canada and Best Small & Medium Employers in Canada surveys, Hewitt and CBSR gathered opinions from 100,000 employees and 2,000 leaders at 230 workplaces to understand the relationships between CSR perceptions, engagement and other work environment factors.

Defining engagement as “the state of emotional and intellectual commitment to an organization,” the study found 86 per cent of employees at organizations with high engagement strongly agreed they worked for an employer that was socially and environmentally responsible. That figure fell to 71 per cent among those with moderate engagement and 60 per cent among those with low engagement.

“Employees who work in high-engagement organizations were a lot more positive about their employers’ social and environmental record and its position around CSR,” said Neil Crawford, Hewitt’s leader of the Best Employers in Canada study.

“High engagement is going to make it a lot easier for you to execute on your strategy to move forward on CSR but it could be difficult to try to move forward on CSR if you have low engagement.”

When executives were asked what they viewed as the potential benefits of investing in or pursuing socially and environmentally responsible practices, the top three responses were: a positive organizational reputation, higher or sustained employee engagement and eliminating waste or reducing the impact on the environment.

There’s no question, in looking at the statistics, if an organization is very strong in CSR, it will be an organization with a highly engaged workforce, said Barb Steele, director of membership at CBSR in Toronto. It’s not clear which is driving which, but they are “inextricably linked and drive each other.”

“It’s significant because now we have solid, quantitative evidence that these two elements are related,” she said.

“CSR and employee engagement, we know, are drivers for change, so here we begin to see that the real win is in the intersection of using these two elements at the business together.”

However, the differences were not as pronounced when Hewitt and CBSR looked at the personal commitment levels of employees around social responsibility — such as donating to charity, recycling, buying green products or trying to minimize their impact on the environment.

In comparing the levels among highly engaged employees, 45 per cent said they had a high personal commitment, 52 per cent had a moderate commitment and three per cent had a low commitment. Among the moderately engaged, the numbers were 39 per cent, 57 per cent and four per cent and among the low-engaged, 35 per cent, 61 per cent and four per cent, respectively.

“There isn’t a lot of difference,” said Crawford. “Clearly there are some opportunities here in terms of how you link up what people are doing at home versus what they’re doing at work and what the organization is trying to do in terms of moving forward on corporate social responsibility.”

Generational differences

However, differences did emerge among generations, as personal commitment levels were lowest among millennials (35 per cent were highly committed) compared to generation X (38 per cent), mid-baby boomers (50 per cent) and matures (54 per cent).

“Contrary to what people might think, it’s in fact the millennials that have the lowest percentage of high commitment,” said Crawford.

However, the lowest engagement in most companies is often among millennials and generation X “because the work environment, for the most part, is meeting baby boomer needs, they’re still the largest part of the work environment,” he said.

Differences also emerged in looking at leadership attitudes to CSR, found the study. When asked about the return on investment for CSR expenditures, 77 per cent of leaders at highly engaged companies said it was justified, compared to 68 per cent at moderately engaged companies and 65 per cent at low-engaged companies.

Obstacles to pursuing CSR practices included a lack of resources, costs, insufficient return on investment and lack of organizational support, according to the leaders surveyed.

But this kind of response is very common because it’s such an emerging area, said Ted Emond, a Toronto-based senior consultant at Hewitt. “Companies don’t even know where to put this function.”

Social responsibility is an evolutionary process, said Shaw of Nexen.

“It’s not by any means some kind of off-the-shelf program that you can roll out in a week,” he said. “It’s something you have to continually work on.”

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