Corporate social responsibility (CSR) is a strategic business tool that is actually quite easy to define: “Doing good while doing well.” This approach stands in contrast to the single-minded focus on profits that until fairly recently dominated the business world. In recent years, many companies have made CSR an integral part of their everyday activity. These companies are now inextricably linked to their social vision, placing equal importance on social objectives and financial performance.
These hybrid companies must also satisfy the demands of a new demographic: millennials. With lofty aspirations and stringent demands regarding sustainability and the social component of the economy, this up-and-coming generation is helping to fuel the CSR boom. The relationship between millennials and CSR strategy has become increasingly clear.
Local business-related actions
This issue was recently highlighted by a study of millennials’ interest in CSR actions. The study reached two main conclusions: that millennials are more likely to be interested in local activities, and that the most effective initiatives are those related to a company’s core business.
These findings suggest that millennials perceive CSR actions as more visible and accessible when they are locally based. Moreover, this new generation is likely to view CSR as false advertising if the actions have nothing to do with the company’s core business.
Local CSR actions improve employer brand perceptions by 53.1%, while actions related to the core business are associated with a 33.2% increase.
Positive impact on employer branding
The study also looked at the issue of employer branding—that is, a company’s ability to attract and retain the best talent. The findings show that millennials are more willing to work for companies that design actions directly related to their core business. All things being equal, companies that engage in this practice find it easier to recruit and retain top talent—a key advantage in a world where organizations are fueled by human capital.
Drawing on nearly a thousand survey responses, the researchers concluded that local CSR actions improve employer brand perceptions by 53.1%, while actions related to the core business are associated with a 33.2% increase. Despite the gap between these two figures, it is clear that both types of actions have a significantly positive effect and that together they can maximize an employer’s appeal.
Consistency in consumer branding
The study also found certain parallels with millennials’ concerns regarding the consumption of particular brands. Although CSR generally has a larger impact on employer branding than on consumer branding, consistency between the two provides an enormous strategic advantage. An overarching strategy based on local actions associated with the company’s core business can do a lot to strengthen the market value of a brand.
The study also found that millennials’ perceptions are not terribly different from those of their immediate predecessors (Generation X). Therefore, it is possible to establish a single formula for attracting talent through CSR strategy: local social actions linked to the company’s core business.
The only notable difference between millennials and Generation X has to do with consumption habits. Millennials, with their skeptical and pragmatic outlook, are somewhat less inclined to buy products and services from brands that adopt CSR strategies.
It is possible to establish a single formula for attracting talent through CSR strategy: local social actions linked to the company’s core business.
CSR as a part of the business model
Whatever the target audience may be, there is a clear relationship between a brand’s CSR image and its economic performance. By confirming the importance of employer branding and consumer branding—two critical variables for business growth in today’s world—the study underscored the strategic significance of CSR and related policies.
These findings also point to ways in which the concept of CSR has evolved. In the past, these activities were deployed defensively, with the aim of preventing or reacting to crises and conflicts. Today, they are an intrinsic part of business strategy. Without a doubt, when it comes to strategy, social and environmental concerns are now on equal footing with finance.
About the study
- The study cited in this article collected nearly a thousand valid survey responses from millennials and members of Generation X.
- There were three focus groups with a total of 23 participants, representing three different countries.
- The study examined the actions of Coca-Cola European Partners and four other leading companies.
- The aim of the study was to assess the impact of various CSR actions on an intangible asset: employer branding among millennials. The study was made possible by a collaboration agreement between Coca-Cola European Partners and the IE Foundation.
© IE Insights.