A new study by CR magazine highlights the bottom line burdens of a company’s bad reputation. In a survey titled The Cost of a Bad Reputation, CR revealed how difficult employee recruitment is for companies with negative reputations.
How difficult? According to the report:
**Candidates are reluctant to join organizations that have a bad reputation, and among those willing to join, a significant pay increase is needed as enticement.
**Companies with bad reputations face increased recruiting costs due to the greater difficulty to source, offer and on-board new hires.
**While recruiting expense increases are in the millions of dollars, this great expense is dwarfed by the billions of salary cost differential. The cost of recruiting and salaries added to any expense associated with a reputation damaged by environmental scandal, for example, can be disastrous to a company’s bottom line.
**Nearly three-quarters (72%) of people surveyed feel that it’s important to work for a company led by a CEO who prioritizes CR and/or environmental issues.
**Interestingly, women place an even higher priority on this than men, 75% vs. 69%, respectively.
**A CEO perceived to be active in CR and environmental issues has an impact on recruiting. This reputation should be maximized when building the employer brand or against competitors whose reputations may be weaker.
A strong CSR program isn’t a magic bullet that can right all corporate wrongs. But we already know that robust employee volunteer programs pay big dividends with employee recruitment, engagement and retention, not to mention community impact. So it makes sense that a company with a damaged reputation should pay particular attention to how it’s communicating its philanthropic goals to employees and authentically, fully engaging them in that mission.
Employees expect nothing less. A study this year by America’s Charities revealed that 68% of employers report that their employees expect them to support volunteerism, and 50% of employers are moving to year-round engagement with their workplace giving programs. According to the report, Snapshot 2014: A Rising Tide of Expectations–Corporate Giving, Employee Engagement and Social Impact, employees increasingly expect their companies to provide the following: an effective, contemporary workplace giving program; the ability to use work time to volunteer; opportunities to engage in skills-based volunteer activities; and matching gifts for employee contributions to nonprofits.
A company suffering from a bad reputation has many obstacles standing in its way, only one of which is the ability to recruit talent. But corporate philanthropy, when it comes from a genuine place and is driven by employees, can chart a more positive path for companies that may help change its direction. The longer your track record of good corporate citizenship, the more genuine it appears, so now’s the time to launch a formal volunteering program if you haven’t already.
When you’re authentically focused on changing the world, you can shape and transform your culture in profoundly positive ways.