CSR in SMEs

Initiatives in favour of the workforce as a win-win option

SMEs, Small and Medium Enterprises. Despite their name, they play a very influential role in the economy and have a relevant impact as they represent the more widespread form of enterprise in the European Union. According to the latest EU annual report on SMEs, in 2012 there were about 20 million European companies in this category: they provided employment to about 87 million people – being two thirds of the total jobs in Europe for that year – and delivered almost 60% “of the gross value added generated by the private, non-financial economy in Europe during 2012”.

What is the role they can play in sustainability and Corporate Social Responsibility (CSR) initiatives?

An important factor to be highlighted about SMEs is their set of characteristics differentiating them from large corporations. Generally speaking, large companies might benefit of scale economies, be more structured, and have more resources, to name a few. On the other hand, being smaller it can mean to be more agile and flexible – having fewer rules, less bureaucracy and more efficiency – to be closer to the territory and to the people, as well as to enable more personal relationships in the workplace.

Due to these features – and to the fact that CSR practices not necessarily need complex or costly programmes – it implies that the important role that SMEs play economically can also be translated into a strong potential to leverage sustainability – as well as grant a return (in terms of both intangible and tangible benefits) to the company itself.

Let’s focus on CSR actions tuned in favor of the workforce: even simple and straightforward initiatives can have a relevant positive impact for both parties. How?

A SME could improve the working conditions and the atmosphere of the workplace, for instance providing time and space to relax or rest, parental benefits, flexibility in the working hours (technology facilitates this), possibility to work from home and to find the right work/life balance.

Then it might be easier for a SME to be open to the dialogue, call the employees to participation and give them a voice: this process can provide mutual valuable information. For a SME it could also be easier to empower employees and give them trust, make them feel part of the company. Promoting shared values to stimulate employees and drive their actions could be another big driver to have the workforce aligned with the company’s vision and mission.

It is interesting to note that these processes – opposite than in larger corporations where CSR is developed with formal structures and sets of procedures – are often informal and more intuitive in SMEs.

And what are the results of implementing these actions? On one side, it can clearly improve the employees’ job satisfaction but also increase their creativity and innovation. In exchange, the company gains from the increased motivation, commitment and engagement of its workforce, which becomes more loyal. Passionate and motivated employees who share the company’s values can become also the first and free-of-cost advocates of the company’s products / services (advocacy is an important and growing trend in the purchasing patterns, driven by the social media and eased by the digital interconnectivity).

With simple and successful CSR initiatives a SME over time can attract the best talent, create a stronger bond and increase retention, lowering the employee turnover (which is a big big issue in China at now for instance). A fair remuneration is obviously important but not enough on its own.

As a result, there is an increase in employee productivity as well as in competitiveness of the company. CSR addressed to the employees is a win-win option and the agile structure of a SME might even make it easier to implement it.