Demand for workers has surged as increasing employee dissatisfaction has led people to greener pastures in what has been dubbed the “Great Resignation.” Although the causes of the “Great Resignation” are complex and multi-faceted, common reasons cited for this exodus include lack of flexibility, feeling unsupported and undervalued, and lack of engagement. As employees look outward, companies have begun looking inwards to address the underlying issues causing this phenomenon. What are ways in which employers can enhance and support engagement? As we approach the season of giving, one way may be through philanthropic initiatives, which often give work greater meaning as they’re seen as an embodiment of the company’s values and commitment to the social good.
Companies that thoughtfully and intentionally engage employees ensure success in the recruitment and retention of diverse talent that will, in turn, keep them competitive and on the forefront of innovation. The disproportionate impact of the events of 2020 on underrepresented groups, however, demands that companies refocus their approach to philanthropy and begin thinking more critically about the type of world they want to build and who will build it. Below, we lay out four actionable steps companies can take in building philanthropic initiatives that positively impact diverse workforce outcomes.
- Leverage the expertise of internal resource networks. Philanthropic engagement opportunities, whether through service or financial contributions, must be offered with intention and should be resonant among employees. Employee resource groups (ERGs) are wonderful resources that can help companies more strategically target their philanthropic efforts in a way that speaks to their employee’s diverse values. By working with ERG or other internal resource network leaders to understand what resonates with employees the most, companies can shift away from a top-down approach to corporate social responsibility (CSR) and toward an employee-driven approach.
- Create philanthropic initiatives centered around diversity. Creating philanthropic initiatives specifically centered around diversity goals can help nurture and develop critical talent, as well as improve a company’s competitive context. Philanthropic programs centered around supplier diversity, for example, are especially impactful as it promotes the economic development of the communities in which employees live and work. These can include programs like providing financial assistance to help scale diverse suppliers or helping diverse suppliers get certified. Moreover, supplier diversity programs also impact talent recruitment. According to a 2019 UPS study, 52 percent of people said they wanted to work for a company with a supplier diversity program.
- Don’t be afraid to use philanthropic efforts as a marketing tool. Good corporate citizenship helps companies attract top talent and companies that leverage their philanthropic efforts as an internal marketing tool experience stronger talent recruitment and retention outcomes. Companies can promote their efforts by highlighting the grants or initiatives that foster both business goals and diversity goals, building positive brand recognition for the company as well as the organizations they partner with. Companies can also increase the visibility of their philanthropic initiatives internally by working with their ERGs to raise awareness, ensuring knowledge of philanthropic efforts reaches all employees. For many companies, what is to be gained by building positive brand awareness internally and externally makes developing and tracking philanthropic efforts a strategic business imperative.
- Utilize a data driven approach to measuring impact internally and externally. Successful philanthropic initiatives all start with robust tracking. Companies can boost retention by tracking employee engagement metrics around corporate volunteer opportunities, with research showing that turnover is reduced by 57 percent for employees engaged in their company’s philanthropic efforts. When integrated throughout other aspects of the business, tracking philanthropic efforts ensures that businesses strategy and community investment opportunities are aligned. A data-driven approach becomes especially salient as companies look to adapt their post-COVID-19 philanthropic engagement opportunities. Companies struggled to keep employees engaged through philanthropic service opportunities in 2020, illustrating the need to develop supplemental opportunities by better leveraging technology and nonprofit partnerships.
Although strategic corporate philanthropy won’t address all the obstacles in workforce recruitment and retention faced by employers today, its potential for positive impact is undeniable. Companies looking to improve in these areas would benefit from developing strategic philanthropic programs that address critical social and economic goals simultaneously and that are driven by the diverse experiences and perspectives of their workforce. Engagement improves diversity outcomes, which is good for the bottom line — companies in the top quartile for racial and ethnic diversity, for example, are 35 percent more likely to be more profitable than the national median for their respective industry. As long as companies continue to fail to create meaningful opportunities for diverse employees to engage and build trust, they will continue to bleed valuable talent.