How Does Volunteer Time-Off Policy Help the Different Stakeholders?
Volunteer Time Off (VTO) policy is one of the ways in which organizations can show that they care about the society around them. After all, Corporate Social Responsibility (CSR), or Social Responsibility (SR) of corporate companies, has been a hot topic for more than half a century now and has been receiving increasing attention from the media and governments over the last decade or so, especially in poverty-stricken countries like India and The Philippines where corporate spending on social issues can have a significant impact in alleviating social ills such as poverty and inconsistent healthcare. Additionally, gone are the days when organizations operate in a cocoon; today, even the smallest organizations are subjected to intense scrutiny by the media and government, and policies such as the VTO allow firms to give back and escape this intense scrutiny.
Corporate spending comes in many ways — corporate companies can directly give money away to causes, fund NGOs who would go on to undertake the societal developmental tasks for them, give away to government-run funds, or, as is the case in Volunteer Time-Off, fund causes indirectly by putting their employees to work for social causes rather than just give money away. VTO offers firms the chance to be in touch with their societal stakeholders directly and shows that they care about societal well-being as much as their own. So how does this VTO policy help the different stakeholders?
Broadly speaking, a firm’s stakeholders can be divided into two forms — external and internal. External stakeholders don’t directly impact the day-to-day running of the firm but have a stake in the firm’s succeeding. External stakeholders include the government, society, suppliers, and customers. Internal stakeholders directly impact the day-to-day running of the firm, stakeholders such as employees, owners, and different types of shareholders, and gain differently from the firm’s success.
How do external stakeholders gain from VTO? Society and the wider community can be said to directly benefit from firm VTO policies since we now have educated and/or skilled people putting their talents to work at alleviating societal ills on the company’s dime. If the employees succeed, it augurs well for the community, and if they fail, the community will still have received some benefit, and everyone will go back to their ways once these VTO activities are completed.
The government also gains from VTO policies since they can now see that firms have taken an active interest in the well-being of society, which is in keeping with the tenets of CSR, which many governments in many countries have been struggling to get their firms to engage in. Furthermore, governments can also focus on aligning their policies accordingly since they now have a helping hand in the form of corporate companies doing their job for them. Suppliers and customers are also part of the wider society and benefit from VTO activities. Also, since firms engage in activities such as the VTO only after their core needs are met, they can be sure that firms that engage in VTO do well in their core activities, which these external stakeholders want firms to do.
When it comes to internal stakeholders, VTO activities help firms in a multitude of ways. Firstly, VTO activities put the firm’s internal stakeholders, the employees, directly in touch with societal stakeholders, which could help firms gain indirect benefits in the form of marketing and research & development (R&D). Since employees now know what their stakeholders expect them to do, they can save on R&D costs. By representing their firms and getting the media to cover their activities favorably, employees can save on marketing and advertising costs. Also, with a firm-level VTO policy, firms can be reasonably sure that employees only take up causes that the firm approves of, which means that they still have a semblance of control over their social outlook and their social footprint.
Owners and shareholders can also gain from VTO activities. As many studies in the field of CSR have shown, CSR activities can improve the profits of firms by increasing their social capital and showing them to be good stewards of society. Activities such as the VTO, which are more direct than just providing funds to social causes, can only increase these and improve the showing of these firms in the eyes of the various stakeholders.
Finally, coming to those who actually engage in VTO activities, the employees, such activities can instill a sense of purpose or actually increase the sense of their purpose and make them better human beings, which can be translated into the workplace. When employees hold VTO activities together, it is no different from the many team-building activities that firms pay for them to be engaged in, in the hope of building stronger teams and stronger employees. Since these employees come together for a higher purpose, it might even act as a better catalyst for team building.
All in all, VTO is a great policy that can benefit all the stakeholders of the organization significantly.