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Research Shows That Even In The For-Profit World, Employees Will Sacrifice Salary For Strong Corporate Social Responsibility

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The Reputation Institute ranked the top 10 worldwide firms with the best CSR, Microsoft being nr 1. Picture: Microsoft European Headquarters

According to new research from Columbia Business School, workers of all ages increasingly value purpose and meaningfulness at work, so much so that they are willing to give up monetary benefits in exchange.

“We tend to think of valuing non-monetary benefits over money only in mission-driven and public service organizations, but this research demonstrates that workers in for-profit organizations are also motivated by a company’s social responsibility,” said author Vanessa Burbano, assistant professor of management at Columbia Business School.

By conducting field experiments in two online labor marketplaces, Burbano studied the relationship between social responsibility and employee salary requirements in settings where workers were making real decisions about job opportunities and compensation. She discovered that information about an employer’s social responsibility could favorably influence prospective workers. In one study, workers submitted 44% lower wage bids for the same position after learning about an employer’s social responsibility.

Burbano also found that higher-performing, more qualified workers were willing to forego the wage differential they would otherwise demand after receiving information about the employer’s social responsibility.

“There has been a commonly held view that workers who are altruistic by nature are the ones that are responsive to social responsibility, but these two studies show that even purely self-interested individuals prefer socially responsible employers. It’s the idea that if an employer treats the broader community well, it’s more likely to treat employees well,” said Burbano.

To conclude:

  • Companies that want to hire the most highly qualified and productive workers should promote their corporate social responsibility.
  • Workers submitted wage bids that were lower by almost half of what they normally would demand when they received a company’s corporate social responsibility messaging.
  • Different personality types are influenced by social responsibility messaging.

The research, titled Social Responsibility Messages and Worker Wage Requirements: Field Experimental Evidence from Online Labor Marketplaces can be found here.

Source: Columbia Business School

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