Why startups, too, need to embrace social responsibility
Startups have always been a symbol of change. They disrupt the industry with their innovative and creative ways, and usher in a new way of doing things in a more efficient and economical way. However, when it comes to businesses investing money and expertise in social causes, most often the corporates or the big fish are pulled up and asked to be more responsible. Agreed, they may do more damage to the environment or use more resources for their operations, but in this time and age, startups, too, cannot wash away their hands from engaging in activities that are aimed at the larger social good. So here is a list of reasons why you as a startup should engage in and scale up socially responsible business practices:
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Customers prefer socially responsible business
A single statistic is enough to close this argument, according to Tiffany Apczynski, public policy and social impact VP at Zendesk. Today, she says, more than 90 percent of consumers have the tendency to move towards brands associated with a good cause. According to research conducted by the PR agency Cone Communications, about 84 percent of consumers today seek out responsible products whenever possible and 90 percent would boycott a company if they learned of irresponsible of deceptive business practices. They are also willing to bear the extra costs the startups may incur trying to be ‘world-positive’ businesses, says a report by Nielsen. About 55 percent of global online consumers from 60 countries said that they are willing to pay more for products and services provided by companies that are committed to positive social and environmental impact.
Employees of socially responsible businesses are more productive and engaged
We know what having disengaged employees can do for your business. Social responsibility programmes can improve engagement among your employees, claims a study conducted by the Society for Human resources Management. Businesses with strong sustainability programmes led to 55 percent better morale and 38 percent better employee loyalty. A report from the Silicon Valley Community Foundation says that social responsibility also has the potential to reduce staff turnover by 50 percent and increase employee productivity by 13 percent.
It can create better leaders
Startups are a learning space for both employees and entrepreneurs alike. People work for startups because they understand the value of playing a larger role in a smaller organisation. Being more involved and having the power to initiate change is one of the motivators that employees seek in startups. Entrepreneurs should also train their employees to become self-managers and future leaders. A social responsibility programme like a volunteering programme will be a great step towards such a plan. An article in the Stanford Social Innovation Review says that 91 percent of millennial women and 76 percent of millennial men found it important to be able to contribute to their communities through their work. The article goes on to say that today’s corporate volunteers are tomorrow’s corporate leaders because they get first-hand experience about complex issues in the real world and start devising solutions to these diverse challenges.
Millennials want to work with socially responsible businesses
Not just your consumers, your employees, too, want to work with a company that does good for the community and world around them. It becomes easier to recruit talent as research says that 45 percent employees are ready to take a 15 percent pay cut for a job that makes a social or environmental impact. Much like your customers, even your employees wouldn’t want to be associated to you if you were found to be indulging in irresponsible production practices. A Forbes article reports that 83 percent employees would leave their jobs if they knew their employers used child labour, 65 percent would quit if they worked for businesses that caused environmental damage and 32 percent wouldn’t want to work with a business that gave little or no money to charity.
The list of such advantages keeps going on. A report by Silicon Valley Community Foundation says that social responsibility has the potential to increase your market value by four to six percent. It can also provide you better access to finance because venture capitalists and some major banks are on the lookout for startups that have a social impact. Socially and environmentally responsible business practices not only increase sales and revenue but also keeps your customers and employees engaged. It’s not too late to take a step in this direction and join other businesses to make this world a better place.