Delimiting CSR and employee wellness

Delimiting CSR and employee wellness: Companies must factor in upstream service providers including FM

Last year, the UAE became one of the first countries in the world to institutionalize a four-and-a-half-day workweek. The decision was preceded by a phase in which companies across the developing world acknowledged the importance of employee wellness. Around the same time, companies also reached a consensus to pursue sustainability through concrete CSR efforts. Seemingly, the pandemic-related uptick in the advocacy of mental health and employee wellness translated to a meaningful realignment of corporate strategies. Many launched wellness and sustainability initiatives, fostered support systems and created an empathetic environment. Today, while we laud what companies did, it is equally crucial to shine a light on the limitations. 

CSR and employee wellness initiatives are not without added costs and obligations. So, companies pursue them exclusively without factoring in the value chain. As a result, it is not uncommon to see an overt omission of scope-1 and scope-2 emissions in sustainability reports, with only scope-1 (direct footprint) accounted for. In industries with long value chains — such as real estate and retail — embodied, real carbon footprint goes unaddressed. It isn’t until such companies become indifferent to the efforts of their value-chain service providers and vendors that it truly becomes a cause for concern, especially with inflation eating away at the margins. For facilities management (FM) service providers, companies’ apathy is increasingly making CSR and employee wellness initiatives untenable. 

FM: Caught between a rock and a hard place

The FM industry serves as a microcosm of the labour market because of its occupational range, from janitorial services to highly technical HVAC operations. Following the pandemic outbreak, the industry has witnessed a surge in demand for workers because of their delayed rejoining. The demand has translated to competitive hiring and a related increase in labour costs. 

At the same time, the proficiency required for hard services (HVAC, plumbing, etc.) has increased, necessitating appropriate training and upskilling. So, recruiting for such roles is riddled with complexities every step of the way. Yet, the recruitment costs for hard services pale in comparison to that of soft services (cleaning, janitorial, etc.), where wages have risen significantly following the pandemic. As a result, employee retention is a tall order. This scenario called for employee experience initiatives, which FM companies are not financially equipped to undertake and sustain. As companies, too, are geared toward cost-cutting, they are not factoring in such issues in their FM budget. So, FM is seemingly caught between a rock and a hard place. 

CBRE underlined such issues in its FM Cost Trends report, proclaiming that the industry will continue to face headwinds in 2023, given the pace of inflation. While material costs are likely to come down with supply-chain recovery, resulting savings could be nullified by a protracted labour shortage. Skyrocketing energy prices offer much less in the way of optimism. 

Companies must view impact through the value-chain lens

The timely advent of IoT, AI, and automation solutions does provide a degree of cold comfort by promising streamlined, resource-efficient operations and associated savings. However, if companies don’t ascribe “value” to the adoption of such solutions, then service providers cannot justifiably increase the FM budget. With compromising on service standards not an option, facility managers have no choice but to hold back on in-house CSR and employee experience initiatives — a situation that will remain unchanged until companies wake up to the harsh realities facing FM. 

About time companies also view social impact through the prism of upstream service providers and vendors. In FM, where long-term working relationships are known to create more value, companies’ whole-of-society approach could pay great operational dividends and concurrently compound the social impact — a win-win situation.