Internal CSR: How to measure employee engagement to improve corporate social responsibility

• Fortune 500 firms now spend $20B per year (~2% of gross profits) on CSR activities.
• More than 90% of the 250 largest companies in the world now produce an annual CSR report, up from 13% in 1993.^1,2 

With this increased investment, it might be fair to assume that firms have been more successful at developing sunnier, authentic, endearing personalities. And to some extent, they have, but that effect hasn’t been universal across all audiences.

Firms’ CSR activities often leave out the people that should be the focus of their targets: current and prospective employees.

CSR has enormously flexible definitions and applications; however, despite recent increased investment, corporations have largely stuck to tried and true avenues of CSR: philanthropic, economic, and environmental initiatives. These domains get a disproportionate amount of attention, mainly because they are thought to accomplish the traditional goal of CSR - building a positive brand image for the firm.^3,4

However, CSR activities focused on donating X number of dollars to Y cause, or sourcing X% of a firms’ energy from renewable sources don’t have a significant, tangible impact on how connected employees feel to their firm. The often-overlooked ‘ethical’ branch of CSR has the potential to be far more effective in addressing gaps in retaining exceptional talent.

Ethical CSR ensures that an organization is operating in a fair and ethical manner - for example, your business might set a higher minimum wage than the legal requirement, particularly if the latter isn’t a livable wage. Because it looks internally first, this mode of CSR is best positioned to address the $500 billion/year in productivity American companies lose out on because of disengagement, or lower the proportion (58%) of Gen Z employees who reportedly moved jobs because of burnout-related concerns.⁵

Consumers and employees alike tend to associate good behavior with good culture. We view CSR as a good thing, therefore we associate positive attributes with the goods and services sold by that company. This is referred to as the Noble Edge Effect: where our impression of companies is influenced predominantly by the CSR activities they engage in.

However, we tend to only rely on cognitive biases, like the Noble Edge Effect, when we lack familiarity with the subject matter at hand.

While this might not be a significant problem with external CSR initiatives, employees of a firm know the firms’ intentions, culture and goals quite well. Any internal CSR efforts must be genuine and appropriately targeted to have a positive effect. This creates a natural dilemma when planning ethical CSR initiatives with the goal of improving employee buy-in and retention.

Solving the ‘authenticity’ problem with internal CSR incentives can’t be done in one fell swoop, but engaging employees in the process helps. Why? The IKEA Effect - we tend to place higher value on items that we helped create. Actively incorporating employee perspectives in the development of internal mental health policies, whether it be a self-assessment tool or otherwise, both increases the employees uptake of those tools, and further demonstrates the firms’ commitment to employee well-being. 

Take a moment to re-consider the opening scenario: Rebecca feels burnt-out and disengaged at work, but she doesn’t fully recognize her symptoms. Her productivity and happiness decline and the company, being unaware, does nothing to address it. She inadvertently transfers her negative feelings associated with burnout onto the company and starts looking for new positions. Rebecca, being the qualified and driven employee that she is, finds a new position fairly quickly and leaves the company. The company is forced to spend time and money recruiting again.

This inefficient situation is avoidable, potentially through the implementation of self-assessment interfaces as a matter of company mental health policy.

Consider a second scenario: Rebecca feels burnt out but doesn’t fully recognize it, and the company delivers quarterly self-assessments to identify potential mental health concerns their employees are facing.

Rebecca completes the interface anonymously, realizes her symptoms of burnout and more importantly, that the company cares about how she feels. The survey directs her to the appropriate resources within and outside the company. Rebecca is happier and stays in her position, the company doesn’t have to recruit a replacement or lose a valuable, promising team member. 

An ethical CSR initiative, like a self-assessment survey, can not only help Rebecca with her pain point, but demonstrate to her that the company is invested in her well-being. The development of such a self-assessment survey is a part of a clearly communicated internal policy for productively addressing burnout, disengagement and mental health concerns.

Almost half of all employees that disclose a mental health issue report a negative reaction/consequence. This isn’t a viable trend for firms looking to recruit and retain top tier talent. In an age where 94% of GenZ and 88% of Millennial employees have sought a job change due to burnout, disengagement and mental health concerns, developing a CSR strategy to directly address these causes is worthwhile for a firm that would like to retain and attract talent.⁵ 

The Decision Lab is an evidence-based consultancy that uses behavioral science to promote social good. We work with some of the largest organizations in the world to spark change and tackle tough societal problems. If you'd like to improve your organization’s corporate social responsibility together, contact us.