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How Corporate Social Responsibility Contributes To Recruitment

Isbella Ribar

Mon, 1 Nov, 2021


Isbella Ribar

  • Reading Time:
    ~ 3 minutes

CSR, or corporate social responsibility, has become increasingly important to the business world in recent years.

A consequence of this change is an acknowledgment that corporations have a responsibility to pursue goals other than the bottom line in developing projects and schemes that make the world a better place.

It would seem that CSR initiatives are still being pursued despite the financial pressures caused by the Covid-19 pandemic.

Quite the contrary, in fact. Having witnessed the underlying fragility and inequality in our society for the past year, many businesses appear to be much more conscious of their wider responsibilities.

However, CSR isn’t just about doing things because they’re the right thing to do. In addition, it’s a smart business move. Recruitment is one of the ways that it can make a difference to your business.

The Connection Between CSR And Recruitment

Taking corporate social responsibility is clearly linked to improved recruitment.

Reputation plays a large role in this. Academics at the University of Vermont, Brock University and the University of Calgary found that CSR contributes to the improvement of reputation and the attraction of potential employees on two specific fronts.

Study subjects were shown the “websites” of fictitious companies and asked to decide whether they would like to work for them and whether they cared about employees.

Their decision came down to two factors – Person-organisation fit and Signalling.

Person-Organisation Fit

Person-organization fit evaluates the degree to which people believe they share the values of the organization they work for or are applying to.

This is a crucial part of CSR’s role in recruitment: it shows potential candidates if those companies align with their values. Study results suggest that in areas such as environmentalism and community service, CSR schemes can positively affect perceptions of a person’s fit with their organisation.

Signalling

An applicant’s perception of the company can affect how they apply. Applicants normally have little knowledge of the company they are applying to, the researchers note. “So they use whatever information they do possess to inform them about unknown working conditions.”

Consequently, candidates infer information about work conditions and things like promotion opportunities from the reputation of a company outside the company.

It could be argued that if a company cares about its community, then it probably cares about its employees as well.

An article by The Lighthouse, Macquarie University suggested that the pandemic has been the litmus test on how seriously companies take their social responsibilities. The pandemic has offered companies the platform to show the depth of their commitment to society. Certain companies went above and beyond giving others no choice but to follow suit, in the eyes of a potential candidate the reaction of companies to the pandemic (and in particular, what follows) would be pivotal in their perception of said companies. 

The pandemic lends support to the person-organisation fit theory: people are feeling more socially engaged, more aware of injustice, and more convinced that things need to change. Therefore, people expect businesses to reflect their values.

Based on this, candidates will search for companies that participate in meaningful corporate social responsibility programs.

Forbes argues that financial success cannot be separated from a company’s internal and external reputation.

Several studies indicate that when a company abandons its social responsibility it has a significantly negative impact on productivity and return on capital.

Indirect Links

However, corporate social responsibility initiatives are good for the whole organization, not just for recruitment efforts.

The CSR function has shifted from a cost centre to a revenue center, as Laura Colombo writes in Forbes.

Many companies have been able to see a positive impact on their bottom lines by making their headquarters more environmentally friendly, by creating adequate employee workspaces, and by increasing their diversity.

Colombo says that these companies become more trustworthy and appealing to the world – and therefore more successful.

More and more investors are considering CSR in investment decisions, so it can improve customer relations as well as offer improved access to capital. Furthermore, a more prestigious and better-performing business can in itself help with recruitment.

CSR initiatives are becoming increasingly popular with candidates, so companies that do not pursue them may be left behind and struggle to find qualified candidates.

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