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Changing the World from the Inside Out: Engaging employees via Corporate Citizenship

Changing the World from the Inside Out:

Engaging employees via corporate citizenship

Interbrand | Pg. a


Interbrand | Pg. 1

Changing the World from the Inside Out: Engaging employees via corporate citizenship

by Tom Zara

In the face of a nine percent unemployment rate in the United States, you would expect the employer to have an abundant and eager array of choices in an underemployed talent pool. In reality, however, nothing could be farther from the truth. An economy that demands we do more with less has taken a toll on our best and brightest. The bunker mentality of the past 36 months conditioned the employee to live and perform under a dark cloud of doubt and apprehension. And now, as we turn the corner and head toward a more optimistic future, we can expect to see talent stir the winds of discontent, just as they have in the past. Organizations need to be aware of the new morality that has taken hold of the global economy. Today’s workforce has seen the impact that reckless behavior, greed, and questionable ethics can have on our society and are now uniting to usher in a new age of corporate citizenship. Employees will be demanding more and expecting more from their employers—and unless organizations meet these demands, employers will have trouble attracting and retaining talent. Instead, traditional employee engagement and job satisfaction efforts suffer from several fundamental yet addressable flaws. Corporate citizenship and the new workforce These efforts approach the workforce

as one homogeneous entity. They fail to acknowledge segmentation, and as a result, they fail to reach their intended audiences. Segmentation allows targeted messages and goals that are meaningful to their daily work.

It takes more than a pay stub and health benefits to motivate Millenials. Unfortunately, the majority of organizations still make the mistake of keeping their corporate citizenship under the radar, in an attempt to appear humble. (See Interbrand’s 2010 qualitative study of seventy global organizations.) While this humility may be admirable, it does not resonate with the future of our workforce: Millenials. As future leaders, Millenials see the world in different terms from the generations that precede them, according to a Mercer Management Study. • 64 percent of Millennials report employer corporate citizenship activities increase their loyalty. •

90 percent of employees would choose an employer perceived as more socially responsible.

50 percent of consumers view employee treatment as central to corporate citizenship.

It takes more than a pay stub and health benefits to motivate Millenials. This

generation has a deep sense of purpose, ethics, and morality in business, and has the drive and motivation to use their youth and energy to change the world. That’s why it is important for those in charge today to begin focusing on developing the kind of comprehensive corporate citizenship strategy that the new emerging workforce demands. But where do companies who are new to crafting engaging corporate citizenship strategies begin? Crafting an engaging corporate citizenship strategy There are three critical strategic initiatives companies must implement if they want to get this right. 1.

Employee benchmark research Anecdotal research is convenient and has great value but is too subjective and inconclusive to inform the employee engagement component of corporate citizenship. It is critical to have a fact-based understanding of how the employee workforce views the organization’s commitment to corporate citizenship. Critical questions need to be asked. For example, employees’ awareness of existing corporate initiatives, the level of participation in existing corporate initiatives, and the compatibility of the initiatives with the mission and purpose of the organization. Benchmark


Changing the World from the Inside Out: Engaging employees via corporate citizenship

Interbrand | Pg. 2

Where do companies who are new to crafting engaging corporate citizenship strategies begin?

research lets employees know that their contribution to shaping a strategy is vital. It shows them that their voice will be reflected in the tactics that define corporate citizenship. 2. Purpose definition All corporate citizenship programs that fully engage the employee do so because the organization has successfully defined, expressed, and connected the program to the organization’s larger purpose. Unfortunately, few organizations have a reverent sense of purpose—and even fewer invest in creating a culture that exudes the values and behaviors of the organization. The exceptions to this rule are Oxfam, Patagonia, Body Shop, IBM, and lululemon. What they all have in common is a commitment to a purpose. With these companies there’s an essential connection between “what I do” and “what we stand for.” This forges the kind of bond between employee and employer that can only come from a shared higher purpose. 3. Employee engagement All the best intentions, best purpose, and best strategies will fail if investments to fully engage employees are compromised by time, resources, and priority. A well-planned, yearlong campaign with clearly defined performance metrics needs to be the bedrock of the program. The experience of employees must be monitored and valued. How meaningful is the experience? How well does the employee connect their function with the purpose of the corporate citizenship program? How rewarding is the

initiative? How has pride and advocacy for the organization been affected by the program? These are a set of key diagnostic queries that must be fielded to ensure that the impact on employees has the desired outcome.

Today’s workforce has seen the impact that reckless behavior, greed, and questionable ethics can have on our society and are now uniting to usher in a new age of corporate citizenship. The ROI of a Truly Engaged Workforce Fully engaging the employee has a direct and favorable impact on the financial performance of the enterprise: •

According to Forrester Research, Inc., Fortune magazine’s “Most Admired Companies” stock prices appreciated 50 percent over peers after instituting employee motivation and alignment efforts.

A McKinsey & Company survey shows that satisfied employees are 30 percent less likely to leave, saving 1–1.5 times annual salary per employee turnover.

Employees with a high level of engagement are 38 percent more likely to have above-average productivity.

Failure to fully engage the employee has a very different impact on the bottom line, as a Watson Wyatt Insider study shows. For example, •

Total turnover costs including hard dollars and lost productivity are approximately 48–61 percent of salary.

An organization with 20,000 employees, 15 percent turnover and average salary of US $50,000 can translate into an annual turnover cost between US $72 million–92 million.

The war for talent will never call a truce. The competitive global economy thrives on the strength of the talent that feeds its growth and prosperity. The lines of the battle are well marked. For any organization, a corporate citizenship commitment that is informed and shaped by employees yields mutual benefits to the employer, employee, and the community in ways that make our world a better place than we found it. ■


Tom Zara Tom is the Global Practice Leader of Corporate Citizenship in addition to his strategy function at Interbrand New York. Given the growing importance of corporate citizenship and its contribution to brand definition and brand value, Tom now leads the development of this new practice area as an extension of his 17 years experience in managing core services of brand strategy, corporate identity programs, name changes, and launch communications consulting.

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Engaging employees via corporate citizenship

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