Written by Sarah Goff-Dupont. Originally published on the Atlassian blog.

If 1 in 10 companies shared a business practice in common, would you sit up and take note? If the number moved to 1 in 5,  would you think seriously about following suit? What about 1 in 4?

That’s exactly the trajectory of one of the hottest employer trends: paid time off to volunteer (also knows as “volunteer time off”, or “VTO”).

According to the 2018 Employee Benefits Report issued by the Society for HR Management, nearly 1 in 4 companies and non-profits in the U.S. are using VTO to parlay corporate social responsibility into a competitive advantage. So what do these savvy organizations know that the other 3 in 4 don’t?

What is VTO and why is it trending?

Volunteer time off (VTO) is employer-sponsored paid time to do volunteer work in your community. Participating employers typically grant between 8 and 40 hours of VTO per year.

Less than ten years ago, VTO was rare, with roughly 15% of employers offering it in 2009 and only about 1% planning to offer it soon. Over the past decade, however, companies have started to take social responsibility seriously, seeking to counteract all manner of negative externalities from displacement of long-time urban residents to pollution to the spread of fake news.

At the same time, Millennials have surged into the workforce and overtaken Gen X as the most populous age group in the U.S. labor market. Contrary to their reputation for self-centeredness, this generation has a strong sense of purpose and cares deeply about issues of social justice. Factor in yet a third trend, the global war for talent, and the equation suddenly becomes clear.

A 10,000-watt spotlight on corporate social responsibility + the need to attract young, socially-conscious workers in an increasingly competitive hiring environment = an explosion in VTO’s popularity. 

That’s all well and good. But what if a company doesn’t have an image problem and isn’t on a hiring spree – would VTO still make good business sense? The answer is a resounding “yes”.

Recruit, engage, retain, repeat

The “selfie generation” isn’t as selfish as they’re often portrayed. According to studies released in 2015 and 2016, 80% of Millennials make charitable contributions, 70% volunteer at least once a year, and 37% spend at least ten hours annually volunteering. Their reputation for being fickle, however, has a stronger basis in fact. The 2016 study showed that 1 in 4 would leave their job after less than a year if a new opportunity arose elsewhere. In a 2-year timeframe, the number goes up to almost 1 in 2.

The recruiting challenge for employers, then, is to meet these purpose-filled candidates where they are and channel all that energy into work they find meaningful. “It doesn’t have to be hard,” says Jeremy Kreitler, CEO of Gliffy, a San Francisco-based software company that runs multiple philanthropic programs internally. “When people talk about what they like most about working at Gliffy, they mention the volunteering and the fact that we give 5% of our profits to charity.”  

When coupled with a compelling, bullshit-free mission, VTO is one of the best ways to speak their language. Indeed, 60% of Millennials report choosing (and sticking with) their current employer because they feel a sense of purpose there.

I want to do more with my career than just help somebody make money. VTO is what made me feel comfortable leaving my job in non-profit for a role in the corporate sector. I feel I can do just as much (if not more) good this way. – Claire Cook, marketer (also, dog-lover and Millennial)

It’s not just about courting Millennials, however. The workforce still contains a handful of Boomers and scads of Gen X’ers who don’t just want to make a living, but make a difference while they’re at it. Many have scars from the toxic, burn-you-out corporate cultures that dominated the ’80s, ’90s, and early 2000s, and are thoughtful about the kind of work environment they step into. Turns out, volunteerism is widely regarded as a boost to a company’s reputation as a great place to work.

“Lots of people say they were attracted to the company by our culture of ‘being the change you seek’ and the chance to make a difference that extends beyond our products”, says Jessica Hyman, a member of Atlassian’s talent team. She’s also noticed employees shaping their jobs with an eye toward social impact once they’re in the door. “Most people use their VTO. And we never struggle to fill the seats on the Atlassian Foundation’s employee council.”

Kreitler sees a similar pattern at Gliffy, where they organize dedicated volunteer days with local non-profits that are open to all employees. “The company organized days make volunteering accessible to employees, and stimulate more people to participate,” he says. And ever since they focused these days on organizations that help deal with homelessness (an employee-driven decision), participation is trending upward.

It doesn’t have to be hard. – Jeremy Kreitler, Gliffy CEO

As if employee engagement wasn’t enough, 65% of HR executives point out that VTO is also an investment in workforce development. Volunteering helps cultivate the soft skills that are increasingly important for knowledge workers: collaboration, empathy, adaptability, leadership, and public speaking (to name a few). As repetitive tasks become automated, such skills will be absolutely vital in the creative and analytical jobs still held by humans.

Think globally, invest locally

Despite VTO’s rising popularity, it’s hardly the only way for companies to help employees make a positive impact. Organizations like Pledge 1% encourage companies to invest a small slice of their profits, product, equity, and/or employee time back into the community. To date, over 5000 companies have signed on.

Thousands of other companies are investing in social impact in more focused ways.

  • Charitable giving – Many companies, Atlassian and Gliffy among them, choose one cause they want to support, then dedicate a small portion of their profits to cash contributions.
  • Donation matching – 18% of companies match employee’s charitable donations, up to a certain amount (typically $500-1000 annually).
  • Donation via payroll deduction – Giving is easy when it happens before the money even hits your bank account. For example, Atlassian employees have the option to donate a dollar a day to Room To Read, which is automatically deducted from their paychecks.
  • Dedicated volunteer days – Many companies opt to organize one-off volunteer days with local food shelves, schools, or organizations like Habitat For Humanity. This works great at the department and team level, too.

Whether a company tests the waters slowly or dives right in by taking the 1% pledge, it’s important to proceed thoughtfully. Employees view programs like VTO as a cherished benefit, making them hard to take back once a precedent has been set. That said, delaying this kind of investment only makes it harder to get started.

Pledging to give back 1% is really easy in the early days of a company because 1% of nearly nothing is nothing. – Scott Farquhar, Atlassian and Pledge 1% co-founder

Besides: the race to recruit and retain top talent isn’t easing up any time soon. Nor is the increased scrutiny on corporations. Corporate transparency is on the rise, driven by inside whistleblowers, citizen journalism on social media, as well as companies’ own desire to open up and make who they are on the inside a part of their external branding.

As the #DeleteUber movement reminded us, customers care about what goes on inside a company’s walls. The organizations poised to thrive in this new era are those who think not just about their shareholders, but also their employee and community stakeholders.

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For more information on sustainable corporate social responsibility and philanthropy programs, check out Pledge 1%. Thousands of companies have already taken the pledge – will you be next?