Corporate Social Responsibility Increasingly Linked to Staff Retention and Employer Branding

Scale Impact and the Hungarian PR Association joined forces in 2022 to assess the receptiveness, practices and vision of Hungarian companies in the field of CSR (Corporate Social Responsibility).

The research is topical because global trends have shown for a few years that companies should spend on sustainability and social activities not only out of goodwill, but also out of business interest - they write in the research summary, the data of which is now also presented in Connect Magazine.

The acronym ESG (Environment, Social, Governance) has shaken up the world of business, lending, investing and then the stock market and larger companies with ever stricter regulation, ever more flesh-and-blood scrutiny of what companies do other than increase business profits, says the summary.

How does this affect the Hungarian economy? Where do we stand in CSR compared to developed European countries, how strategic is the corporate approach, how much do companies spend, do they care about the issue and what issues drive them? 

In other words: can we trust corporations to make the world a better place?

Between the first meetings of the survey and the online questionnaire, the Hungarian economy took a big turn: the new energy bills announced in mid-summer, skyrocketing energy and raw material prices in the wake of the Ukrainian-Russian conflict, and inflation made the crisis "tangible" overnight. The question was to what extent domestic companies would be prepared to respond or deal with an issue that was apparently not a basic condition for business survival.

However, the response was positive and dozens of companies agreed to participate in in-depth interviews. A further starting point was the PR Trend Report, published by the MPRSZ in 2021, which included several chapters on corporate sustainability and social responsibility.

Goodbye CSR, hello ESG and business sustainability!

While the focus of CSR activities is clearly on national social issues, companies also make an effort to be good corporate citizens on a local level by providing aid to the neighborhoods near their factories, offices, and other facilities.

A trend in recent years has been the growing role of environmental sustainability in the lives of companies,

as reflected in the fact that the term CSR is becoming somewhat outdated and is being replaced by 'business sustainability' or ESG in other terms.

On this basis, the need to move towards business, workforce or customer retention will increase the rate of spending and engagement in this direction.

When companies engage in CSR, they are supporting an important cause, preferably one that is aligned with their business objectives.

The research allowed for more than one response, but a clear leading theme still emerged:

  • 20% went to social and economic development,
  • Education and training received 19%.
  • This was followed by environment and animal welfare with 16%,
  • followed by health and welfare.

Support and activism related to religion and belief was the least popular.

Workforce and brand value motivate

Various factors, identified in the literature and international research, influence the CSR efforts of businesses:

  • workforce retention,
  • employer branding,
  • Generation Z value perception,
  • or attracting and retaining customers.

The PR Trend Report 2021, published by the Hungarian PR Association, mentions the Generation Z employee/buyer as one of the main drivers of a purpose-based corporate culture.

In a multiple-choice question, 68% responded that

retention, i.e. how employees value the company's efforts in this area, is a key factor in its CSR activities.

Almost as many (64%) indicated that increasing brand equity was also important,

55% also highlighted employer branding.

Managers' personal brands, bringing Generation Z into the workforce, and retaining existing customers all scored lower than these numbers, but still above average, at around 30%. Only 10% of businesses cited CSR as a key driver of sales, indicating that the vast majority do not consider CSR to be a sales driver.

Why CSR activities need to be linked to the corporate culture

According to the PR Trend Report survey, 47% of the adult population believe that CSR is often just part of the communication and not backed up by real action. The survey asked respondents for their views on this statement, i.e. how active CSR practitioners see the situation in their country.

The average of respondents was evenly split, i.e. it was not clear whether the majority agreed or disagreed with the statement.

Considering all the answers, this statement perhaps sums up the point: "There are companies that really only use CSR as a PR tool, but fortunately there are also many examples where this type of activity has become an important part of the organization", the research summary points out.

More extreme views were also expressed, for example, that "in many cases we see companies choosing CSR activities more for marketing than for the real value of the work they put in. A lot of companies are using greenwashing methods to meet new trends".

On the other hand, "... CSR is now embedded and/or should be embedded in corporate strategy. This is important both because of the example it sets for employees and society, and because companies have a responsibility to promote 'good causes'".

A more detailed summary of the research is available here.

New research: is corporate culture the social responsibility of SMEs?

As the respondents to the previous survey presented above were mainly from large companies, Scale Impact has launched a new survey to look at CSR in the domestic SME sector. If you want to help with your answers and you represent an SME, please fill in the questionnaire!

The results will be presented at a press event, expected in spring 2023.

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