Contact Us

Use the form on the right to contact us.

You can edit the text in this area, and change where the contact form on the right submits to, by entering edit mode using the modes on the bottom right. 

240 Shahpur Jat
New Delhi, DL, 110049
India

9811111111

Q&A: DOES EMPLOYEE ENGAGEMENT COUNT TOWARDS CSR SPEND AS PART OF THE NEW COMPANIES ACT?

Content Hub

Q&A: DOES EMPLOYEE ENGAGEMENT COUNT TOWARDS CSR SPEND AS PART OF THE NEW COMPANIES ACT?

Anubhav Gupta

 

This is a question we are being asked a lot at the moment. And it’s a good one.

There are numerous reasons why you would want to target your own employees with responsible initiatives – not least of which because more engaged employees have repeatedly proven to be more productive, loyal and innovative in their roles. And of course if you are an employer with low-wage or contract workers, the need for targeted social interventions is all the more pressing.

However the rules of the new Act state that any programmes that are “solely for the benefit of your employees and their families” do not count towards your reportable CSR spend.

Punj Lloyd carries out health and HIV awareness with its hired site workers

Punj Lloyd carries out health and HIV awareness with its hired site workers

Reaching the other 90 percent

We can’t speak for the government on why they chose to include this particular rule, but it does make sense in a broader perspective. Encouraging corporate spend on responsible initiatives is an attempt to direct not only corporate finances but also private sector expertise and efficiencies towards addressing some of the country’s most critical social issues.

And with only ten percent of India’s population engaged in formal employment, allowing companies to restrict programmes to their own employees would potentially exclude the 90 percent of the population who rely on informal labour, agriculture, or have no regular employment – and it doesn’t bode well for the implementation of holistic, long-term, societal interventions.

Employees are not entirely excluded

Having spoken to a senior government advisor, it’s clear that there’s no rule saying your employees can’t benefit from programmes if they are in the target groups that your CSR policy is aimed at – for example, female employees can benefit from any women’s empowerment programmes you initiate, and your employees’ children can benefit from local education projects.

A worker being surveyed as part of CSR strategy development

A worker being surveyed as part of CSR strategy development

Balancing priorities

Our recommendation in order to create strategic advantage internally, whilst benefitting society, is to think of your employees as representative members of the communities in which they live. The Act encourages businesses to “give preference” to the local areas around it and where it operates, so having a sample of that community in your own building is a great tool for you to understand the communities’ needs and create relevant programmes around them.

We recently trailled this concept with one of our major clients. Having a workforce exceeding 70,000 across the country, we worked with them to define an accurate sample group of 1,200 and implemented an in-depth quantitative survey to assess their priorities, needs, and interests, both in the workplace and outside. The findings and trends uncovered through this exercise have become the building blocks of a CSR strategy that will target other low-income households in the local area and, of course, will additionally benefit the employees and their families where possible.

Three point guide

- Engage your workforce in the CSR process, even those (like corporate staff) who may not be the final beneficiaries.

- If you employ low-wage workers, utilise their knowledge and experience to define what programmes would be useful to the local community.  

- Think about programmes you can implement both internally and externally – identify the crossover areas and deploy your corporate expertise to address them.