Corporate social responsibility is turning out to be the surprising tool for IT companies in India to retain employees. These programs are also linked to improved job performance.
Cognizant, the Teaneck, NJ-headquartered IT services firm with 200,000 employees and the bulk of its development operations in India, found that its corporate social responsibility (CSR) programs motivate employees to perform better in the workplace. A survey revealed that over half of Cognizant's employees volunteering in various CSR programs displayed improved workplace performance. Nearly all of them felt their activities created a sense of pride about their employer as well as their teams.
The IT sector in India, a country with the world's largest numbers of citizens living in poverty as well as millions of undernourished children, is seen to be furthering the wealth divide. Even as its entrepreneur billionaires and its well-paid workers are under increasing public scrutiny, IT firms have raced to undertake meaningful CSR programs to fulfil ethical obligations and salve their social conscience.
It is only recently that these firms are waking to the fact that CSR activities do not just impact the communities around them but also help the organization and its employees directly. CSR initiatives are turning out to be a significant retention tool in a sector where attrition has been a big bane, hovering around the high double-digits in some firms.
Mohit Gundecha, cofounder and CEO of a Mumbai-based talent retention analytics firm, said that CSR programs are proving to be one of the biggest drivers of talent retention, job satisfaction, and team bonding. "Such projects affect how the employee feels about the company as well as how an employee's family feels about him/her being in the company which is significant as, culturally, families pay a big part in a person's career choices," said Gundecha, whose firm works with customers such as business process services firm WNS and IT consulting firm Capgemini.
Jombay's India attrition report 2014, which polled 3,000 employees in 60 Indian firms, revealed that CSR involvement helps employee retention. "In the IT industry, the probability of employees staying back is 40% more for employees who take part in CSR than those who do not," said Gundecha.
To be sure, Indian firms of a certain size are required by a 2013 Indian law to set aside a percentage of their profits for CSR activities and derive tax benefits in return.
The Indian IT sector employs a large chunk of millennials and so, retaining employees is also about marketing and keeping the company's brand alive internally. "CSR activities bring companies more social visibility and branding, especially amongst a generation that sees a career as not just about the money and title but also about having an employer with better ethics and culture," said Sudhir Sinha, CSR and sustainability adviser at consultancy PricewaterhouseCoopers.
Ness Software Engineering Services, a mid-sized US-based IT services firm, which runs three development centers in India with over 3,000 employees, has been running CSR activities for the last few years. In Bangalore, for instance, the company has adopted schools for underprivileged children where it provides teaching material and infrastructure. Its employees volunteer to teach at the schools. "About a fifth of our employees routinely engage in programs spanning education, hygiene, and fundraising for causes, and aside from the tangible benefits of their social engagement, these employees tend to be more dedicated to the company and their work," said Pruthvi Nanjappa, vice president, human resources at Ness.
At Cognizant, grassroots volunteerism has added a new dimension to work. The company's CSR program Outreach comprises 50,000 active employee volunteers who work in the field of educating the underprivileged. In 2014, volunteers clocked 300,000 volunteering hours in teaching and creating career awareness in 110 schools with 400,000 students. "Outreach gives employees a greater sense of purpose; they feel motivated and this, in turn, leads them to excel in the workplace as well," said Archana Raghuram, global head of Cognizant's Outreach program.
Besides Cognizant, India's biggest IT employers TCS, Infosys, and Wipro allocate funds and offer workers opportunities to volunteer in areas aligned with their own interest. "When employees get engaged, they stay longer," said Sinha of PwC.