Most, if not all businesses understand well that their competitiveness hinges on several determinants, key among them being workforce productivity. Competitiveness increases when productivity increases relative to costs; therefore, organisations must examine their entire productivity architecture continuously, to enhance productivity, or at worst, take effective steps to mitigate challenges to productivity. In this piece, we examine one critical element of that architecture: Internal Corporate Social Responsibility (ICSR).
ICSR refers to a firm’s initiatives and practices that are focused on the well-being and development of its employees and other internal stakeholders. It is part of the broader concept of Corporate Social Responsibility (CSR), of which the external dimension focuses on aspects such as environmental sustainability and community engagement. It focuses on creating positive work environments, on ensuring fair labour practices, on providing opportunities for professional growth, and on fostering cultures of respect, transparency, and ethical behaviour within organisations.
At its core, it is an acknowledgement that a company’s responsibilities extend beyond its financial performance to include the social and environmental impacts of its operations. In fact, multiple studies, suggest that any gains made from trying to improve or enhance productivity while ignoring the well-being of employees are likely to be short-lived.
The inextricable link between a firm’s ICSR and its productivity is so significant that popular global firms like Google, Netflix, Starbucks, and Coca-Cola have embarked on comprehensive ICSR initiatives. These ICSR activities in tandem with externally focused CSR initiatives have simultaneously positioned those companies as sustainable business beacons, and employers of choice, and enabled them to boost their productivity.
A cursory internet search using the prompt, “Improving Labour Productivity through Internal Corporate Social Responsibility” revealed that as far back as 2008, the Trinidad and Tobago Manufacturers’ Association (TTMA) partnered with the UN Development Program on a project aimed at strengthening the ICSR practices within labour intensive enterprises in the country and developing an ICSR model that can be replicated.
Surely, based on the aforementioned, we can see that a case exists for ICSR to be included in any discussion focused on productivity. The impact of a comprehensive ICSR programme on workforce productivity cannot be overstated.
ICSR is an ever-evolving concept that is continually researched with the literature suggesting that its crucial dimensions can include Economic Responsibility, Legal Responsibility, Employee Well-being, Professional Development, Ethical Practices, Work Diversity, Human Rights, Engagement and Inclusion, Training and Development, Health and Safety, and Work-Life Integration. These dimensions will constitute some essential talking points at HRMATT’s C-Suite Conversation on Productivity.
Focusing on these internal aspects, companies can create sustainable and responsible businesses that contribute to the well-being of employees and by extension, the broader society at large. It should also be noted that increasingly, this internal dimension of firms’ Corporate Social Responsibility (CSR) is being recognised as a crucial part of achieving the United Nations Sustainable Development Goals due to its impact on the quality of life for employees and their communities.
So, what are some of the significant potential impacts of ICSR on organisations?
- ICSR encourages increased work engagement among employees by prioritising employee well-being, safety, and work-life balance. Further, it fosters positive work environments, which in turn can lead to more engaged, committed, motivated, and productive employees.
- By addressing health and safety concerns, providing training and development opportunities, and promoting a diverse and inclusive workplace, ICSR reduces burnout. Burnout negatively impacts employee productivity, and the implementation of ICSR practices mitigates this risk.
- Employees who perceive that their organisations care about their well-being so much so that they remain ethical in their treatment towards them, tend to be more satisfied with their jobs. Satisfied employees tend to be more productive and committed to both their jobs and the organisation.
- ICSR practices create a sense of purpose and alignment with organisational values. This positively impacts both individual and team performance.
- ICSR practices can foster intrapreneurial behaviour among employees—that is their ability to innovate, take initiative and contribute positively to organisational growth.
- Employees who are supported by their organisations through health programmes, training, and a balanced work environment are more likely to exhibit intrapreneurial traits, which in turn lead to improved productivity.
- Companies known for their ICSR initiatives build positive reputations, which can attract top talent, potentially leading to enhanced productivity. Talented individuals seek out organisations that align with their values, and ICSR practices signal a commitment to social responsibility, making the company an attractive employer to those committed to their values.
- ICSR is not just about short-term gains; it contributes to long-term sustainability. When employees feel valued and supported, they are more likely to stay with their organisations and contribute positively to its growth.
- ICSR has the potential to drive employee engagement and satisfaction; this is typically characterised by reduced turnover, increased stability, continuity, and accumulated knowledge, all of which positively impact productivity over time.
Internal Corporate Social Responsibility (ICSR) does not just constitute another box to tick for organisations, but rather, it can lead to a significant entrenchment of a culture focused on productivity in organisations where it is applied. Its crucial dimensions and benefits in addition to the implementation of its initiatives are sure to be salient conversation points in HRMATT’s C-Suite Conversation on Productivity, taking place on Wednesday, June 12 at the Hyatt Regency.
