Do Socially Responsible Companies Attract The Best Employees?

Sustainability consultant, Madeline Ravich compares SRI and ESG company rankings to Fortune Magazine’s Best Places to Work to determine whether the most socially responsible companies attract the best employees. What do you think? Take the poll below and post your comments.

by Madeline Ravich, Sustainability Consultant. Follow Madeline on Twitter @mcravich. Read Madeline’s CSR blog series at Justmeans.

I thought it would be interesting to take a look at how the SRI and ESG lists I’ve been exploring compare with Fortune Magazine’s Best Places to Work. The results were surprising— 20% of the companies on the Best Places to Work list made it onto the 2010 Ethisphere, CRO, RiskMetrics Group, Corporate Knights, or Dow Jones Sustainability Index lists.

Why should this matter? If you read articles and books about the business case for CSR, you will often see an argument that the most socially responsible companies attract the best employees. While appealing to those who want desperately to believe that nice guys finish first, this argument is rarely substantiated by hard data. That’s why I thought it would be valuable to see if companies recognized as the best places to work are also deemed top-notch from a CSR perspective.

A few notes to temper your response. First, as usual, differences in basic inclusion criteria automatically limit overlap. The Best Places to Work recognizes companies that have at least 1,000 regular full and part-time U.S. employees for the duration of the selection process, and limits its list to companies that have been in operation for at least seven years. Companies going through a merger or acquisition that significantly increases the company’s U.S. employee population may also be excluded. Most significantly, companies opt in— they cannot be evaluated without engaging with the Great Places to Work Institute. All this means that large U.S. companies are more likely to be recognized in the list than equal sized non-U.S. companies, which is why I have broken out U.S. or North American listings from global lists.

So does this comparison tell us shed any light on whether socially responsible companies really attract the best employees? I’d welcome your opinions, but my largest observation is the circular nature of such assertions. Notice that Ethisphere overlaps far more with the Best Places to Work than any other list. There may be a reason for this, as I will explore in a CSR post about ranking methodologies later.