The business case for volunteering

Some executives still view corporate volunteer programs as an unaffordable luxury in hard times, excess weight that can be jettisoned when the weather gets heavy. That might even have been true at one time. These times are different. The world has changed in the 21^st century and business isn’t business as usual.

Deloitte’s Center for the Edge 2011 Shift Index indicates the intensity of competition in the U.S. has doubled in the last 40 years. Change is increasing exponentially. The average tenure of a company in the Fortune 500 is dropping like a stone through still water, currently 15 years, trending toward five. You only have to look at Research in Motion for an example of how far and how fast a company can fall. In such an environment where the powerful fall like plague victims, it requires marshaling all of a company’s resources to maintain competitive advantage.

On average, only 33% of workers are engaged with their jobs; 67% are either disengaged or actively disengaged.

For years it’s been popular for companies to claim “people are our most valuable asset.” The fact that people were included among the inventory was a clue. In the 21^st century products are ideas and the workforce is more than an asset, it’s the source of wealth. Engaged employees, passionate employees improve almost every metric that matters to a company.

In Gallup recent meta-analysis of 199 studies involving 152 organizations spanning 44 industries and 26 countries, they found employee engagement increases profitability by 16%, productivity by 18%, customer loyalty by 12%, and quality by 60%.

In case you breezed past that last metric, let me repeat it. Employee engagement increased quality by a whopping 60%. If employees aren’t developing positive emotional attitudes toward their company, their jobs, and their colleagues, it’s gutting the quality of their products and services.

A recent research paper by the Accenture Institute for High Performance (What Executives Really Need to Know about Employee Engagement) listed among the benefits of engaged (versus disengaged) employees the likelihood to use a variety of skills on the job (71% vs. 32%), the feeling that they have greater control over their work (53% vs. 22%), a belief that their job is important (73% vs. 26%) and that their company has a strong culture of trust and respect (52% vs. 6%). Engaged employees have a positive emotional impact upon their co-workers that shouldn’t be undervalued.

And a 2010 study by Towers Watson (Strategy at Work) found that companies with a highly engaged workforce have shareholder returns twice as high as those with low engagement.

What’s the cost of disengagement? It’s been estimated at $300 billion in lost productivity for the US alone. But it’s not the US alone that’s affected. Blessing White’s Employee Engagement Report 2011 indicates the problem is worldwide.

	Engaged	Disengaged
India	37%	12%
Australia, NA	36%	17%
North America	33%	18%
Europe	30%	19%
SE Asia	26%	16%
China	17%	29%

The comparison between world class and average organizations is also stark.

World Class		Average
67%	Engaged	33%
26%	Not engaged	49%
7%	Actively disengaged	18%

Obviously, engaged workers are profitable, disengaged ones are expensive. How do you encourage engagement? One way is to encourage them to volunteer.

According to the eighth annual Deloitte Volunteer IMPACT Survey, millennials who frequently participate in workplace volunteer activities are more likely to be proud, loyal and satisfied employees, as compared to those who rarely or never volunteer.

• They’re twice as likely to rate their corporate culture as positive (56% versus 28%)
• More likely to be very proud to work for their company (55% versus 36%)
• More likely to feel very loyal toward their company (52% versus 33%)
• Nearly twice as likely to be very satisfied with the progression of their career (37% versus 21%)
• More likely to be very satisfied with their employer (51% versus 32%)
• More likely to recommend their company to a friend (57% versus 46%)

In other words, they’re engaged employees. Besides retention, there are other benefits that cascade from employee engagement, benefits that drive a company’s bottom line. Accenture itemized the benefits in a 2010 research paper and reinforced the message more recently in What Executive Really Need to Know about Employee Engagement.

Engaged employees are:

• 87% less likely to leave the company
• 86% happier at work
• 70% more customer-focused
• Generate 43% more revenue
• Have 37% fewer sick days

There remains the question whether volunteering is cause or effect, whether workers volunteer because they’re engaged or the act of volunteering encourages engagement. I suspect it may be one of those paradoxes of human behavior—we often heal ourselves when we focus upon helping another. Practically, it doesn’t really matter. There’s a positive correlation between volunteering and engagement. A company with more volunteers in their workforce is likely to have more engaged workers.

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