As society struggles with the profound impact of coronavirus, corporations have a responsibility to step up and help support the government in taking action. As the department within companies which has direct relationships with non-profit organisations and the communities they are part of, Corporate Social Responsibility (CSR) professionals should be on the front lines helping with funding and solutions of any kind.
The way large companies are responding to this crisis represents a defining moment that will be remembered for years to come. For example, 38 years ago in Chicago, 7 people died from taking poisoned Tylenol pills. It was a rare and localised crisis, but Johnson & Johnson took the decision to pull all the Tylenol from every store, taking a huge loss in order to avoid even a single additional death. People still talk about that decision. People who weren’t even born at the time are still studying that case in business schools.
A great many corporations talk about having a social purpose and set of principles and values, or about how much they care for their employees and other stakeholders. Now is the time for them to make good on their commitments. Research suggests that people only truly believe that their company has a purpose and clear values when they see their leaders making a decision that sacrifices short-term profitability for the sake of complying to those values.
Another example of positive action is represented by the U.S.A. drugstore chain CVS which chose to go more deeply into health care and decided that it could no longer sell tobacco products and by doing so giving up $2 billion in revenue.
It is completely understandable that corporate leaders face pressure from investors and bankers to conserve cash and reduce losses, but neither of these categories are going hungry. Even retirees, who have seen their savings depleted, can expect to see stocks recover as long as they don’t sell during this initial panic time. Companies cover up the costs of restructuring, product failures, or acquisitions that go wrong all the time. It will be more than understandable if someone writes off their losses due to the coronavirus pandemic. Here are some things that companies can do to help their employees, small suppliers, health care providers, and communities.
What companies do to help their laid-off employees — above and beyond what is required or expected — will be remembered and repaid in increased loyalty, higher productivity, and a lasting reputational benefit for many years to come.
Continuing to pay wages, even at less than full pay, is one option. For this scenario we have Walmart, Microsoft, Apple and Lyft who have all made commitments to continue payments to hourly workers for at least the first two weeks of lockdown. This is essential not only as a matter of corporate responsibility; it will also substantially reduce the costs of rehiring employees when the economy returns to normal.
Lending money to employees is another option. Left on their own, many employees will turn to the exorbitant charges of credit card debt and payday lenders who will charge a 20%-plus interest rate at a time when corporations can borrow at 2% or 3%. That difference in interest rates can be the difference between bankruptcy and economic survival. Corporations should use their corporate credit and collateral to arrange low or no-interest loans to their employees. They should calculate employees’ take-home pay after payroll deductions, and ask their banks to make loans available equal to a month of net wages at 3% interest, guaranteed by the corporation. Employees could therefore pay the loans back over the next year out of their salaries when they return to work.
Some parts of the world face severe shortages in basic medical supplies, but as a global company you have access to resources everywhere. The need for masks in China and South Korea has decreased considerably while it is on a upward trajectory in the United States and Europe. Companies should purchase and ship supplies from where they are available to where they are needed. They should look into their inventory of whatever they have that might help, send it where it will do the most good, and take the loss.
Encouraging mental wellness
Many companies, as well as state and local governments, recommend that those who can work from home do so. In addition, the Center for Disease Control in the United States recommends that all gatherings and events of more than 50 people be cancelled for the next eight weeks. This “social distancing” is vital to reducing the spread of the coronavirus but negatively impacts emotional well-being.
Thus, leading corporations are supporting mental as well as physical health. For example, Starbucks just announced it will expand mental health benefits to include up to 20 therapy sessions for all employees. Elsewhere, telecommunication companies have signed the ‘Keep Americans Connected’ pledge to make sure that individuals maintain access to connectivity.
Supporting small businesses
According to the Wall Street Journal, small businesses’ confidence has plummeted as a result of the Covid-19 pandemic. Some large corporations are stepping in to support small and medium companies during this difficult time:
- Amazon announced a $5 million relief fund for small businesses in the vicinity of its headquarters;
- Google is offering $1 million to organisations in Mountain View, California, impacted by the pandemic;
- Billionaire Mark Cuban has been reimbursing employees who purchase lunch and coffee from local restaurants.
Although the ramifications of the Covid-19 impact have yet to be determined, it will continue to disrupt our now old way of living for the next few weeks and months. The corporate sector can help during this crisis by implementing strategies and initiatives that benefit society – as well as their long-term success – by supporting their employees, customers and the economy at large.
No one expects or requires major companies to take extraordinary measures to help their many stakeholders, but if they choose to take bold and creative steps now in order to deliver immediate support then that will define their future legacy.
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