Taking the First Steps into CSR for SME Construction Businesses
Customers have power over firms – in highly competitive markets sector, customers have the option to switch supplier.
This is the primary reason why Corporate Social Responsibility (CSR) can help safeguard growth and business development within such as competitive sector as Construction. Clients are consumers, and consumers value responsible behaviour by companies and reward such behaviour with loyalty to thier products and services.
For this reason, no growing SME construction business can now afford to be perceived as lagging in its responsible management activities nor to be half-hearted in thier enactment. A future growth focussed boardroom and its members within the construction sector are now expected to have an understanding in not only:
- how they fulfil legal obligations to society on health and safety, the environment, human rights or race, gender or disability discrimination, but also
- how they incorporate these into their business model, their brand and reputational safeguards with clients, banks and society.
The potential damage locally to a construction SME if its reputation and future workload can be significant when its own practices, or those of its employees, contractors & suppliers are called into doubt or question. What first steps can a SME construction company take towards building responsible management practices into the Boardroom and its work force without draining its limited resources.
Building the Business
In the UK there is a high correlation between companies being perceived by the public as socially and environmentally responsible and being viewed favourably overall. Consumers value responsible behaviour by companies and reward such behaviour with loyalty to its products and services. For this reason, no company can afford to be found wanting in fulfilling its legal obligations to society on health and safety, the environment, human rights or race, gender or disability discrimination. The potential damage to a business, its reputation and its sales is great if its own practices, or those of its suppliers or subsidiary companies, are called into question.
Employees as resources
One of the biggest mistakes a business can make is to forget that its employees are its key resources. Experienced employees with their site experience, specific trade and in the technical nature in how issues are managed quickly and efficiently to maintain construction progress is a key determinant of ‘profit’ and ‘efficiency’. Success is often defined not by the management team but by the relationship between firm’s leaders and their key employees, and the mutual regard both parties have for eachother.
To succeed, construction firms need to attract and retain the best people locally to work for them. Respect for people, their skills, diversity and their need to achieve a good work life balance is an important aspect of socially responsible business practice. Firms that fail to improve their attitude and performance towards respecting people will fail to recruit and retain the best talent and business partners. The construction industry has a generally poor record on employment issues and under-performs on diversity and employee satisfaction scores. Companies can either follow the pack or differentiate themselves by demonstrating that:
- they value their workforce, their health & safety, their working environment, training, personal development & diversity; and
- they maintain an active commitment to equal opportunities for all across thie workforce.
For this reason, the industry’s own Movement for Innovation recommended that firms of all kinds and sizes should commit to achieving the standard of Investors in People as the most effective and most systematic means of developing and demonstrating respect for people. Furthermore, people want to work for socially responsible businesses that respect not only their own workforce but wider societial values. Surveys consistently find that most people believe that a company that supports society and the community for example, by establishing links with local or national charities, schools or other local groups is a good company to work for.
Trust is important in influencing the way employees, clients and the wider community judge a company. A successful company needs to operate with honesty and openness to create trust in its relationships with all its stakeholders.
Although there is no legislative requirement to report on social responsibility, companies that do so tend to be better perceived by their stakeholders. Reporting and communicating their impact on society can help to demonstrate openness and transparency about their operations, a willingness to be accountable for their actions and their seriousness of intent regarding community and social responsibility, thus developing confidence in their business.
Reporting is, however, not an end. The public will see through cynical reporting and attempts to be politically correct for its own sake. Companies need to demonstrate their commitment is real and produces real results.
The principles of community and social responsibility need to be embedded into the overall business conduct of a company and become part of its core values and objectives. A badly targeted approach will be ineffective, and companies need to identify the actions that will have most impact for them, manage them in a professional way and communicate to their stakeholders what they are doing. Without effective communication, no-one will be aware of their work. Without awareness, there will be no benefits to business standing or reputation.
As for any other project, it is first vital to secure the commitment of senior management and the allocation of adequate resources for developing a community and social responsibility strategy. Then, by reviewing current policies and performance, you can identify the issues of most relevance to your company and develop an effective strategy and action plan. The process should be iterative, with review of progress leading to adjustment of the strategy and continued business improvement.
Five Common Strategies to Consider Starting with
- Building Satisfaction and relationship with the customer – building future relationships based on integrity and tailored to the customer’s needs.
- The development of talent and commitment among the firm’s key frontline employees – to invest in a team committed to and prepared for the construction sector challenges the future will bring.
- Responsible Management based on solid values – the senior management team will continue to develop in terms of good boardroom governance that strives to ensure values and responsible culture, risk management and relations with third parties.
- Responsible Construction & Sustainable development – Demonstratable progress towards achieving a low-carbon construction industry by managing the direct and indirect impacts arising from operational activities.
- Social contribution – Contributing to building a better local community, supporting real needs and safeguarding the natural environments & its resources.
Increasingly SME companies within the construction sector are seeking to build in business strategies that, through choice or through client requirements, that build in Corporate Social Responsibilities (CSR). Leading Green can provide strategic and operational support to Boardrooms & senior leadership teams on topics such as Responsible Management, Sustainable Construction, Governance and CSR that are essential on BREEAM and LEED registered projects.