Trailblazers and trendsetters

American companies have not only brought much needed jobs, investment, and tax revenues to Ireland, they have also brought with them a range of progressive innovative business practices which have been adopted by the Irish business community.

CSR

Corporate social responsibility (CSR) would not have been heard of anywhere if not for American firms who exported the concept when they set up new overseas operations. The term was coined in the US and the concept was developed and refined there over many years before it became a mainstream business activity in other parts of the world.

Put simply, CSR is how companies manage their business processes to ensure that the interests of society and the interests of enterprises are aligned. It integrates social and environmental concerns into mainstream business operations by going beyond an organisation’s requirements to meet legal obligations.

In its October 2020 Beyond Business — The Social Impact of US Investment in Ireland report, AmCham found that 65 per cent of American companies based in Ireland surveyed have dedicated CSR committees. In addition, 61 per cent of US companies support individual employee volunteering.

Wellness

Not too long ago, Irish employee wellness schemes began and ended with a contribution to private health insurance. That’s all changed now, and companies offer a wide variety of wellness benefits including annual health check-ups, comprehensive mental health supports, financial wellbeing advice, deskside massages, right the way up to on-premise dedicated wellness centres where people can avail of a range of therapies or engage in yoga, pilates and other activities.

This is an indication of just how advanced the US corporate wellness market is can be found in a Grand View Research report which valued it at $18.0 billion in 2021. The report also projected a compound annual growth rate of 3.77 per cent from 2022 to 2030.

In Ireland, research carried out on behalf of Aon in 2021 found companies that improve employee wellbeing by 4 per cent see a 1 per cent increase in company profit and a 1 per cent decrease in employee turnover.

Sustainability

American companies have long been ahead of the global curve when it comes to sustainability actions and ambitions. Microsoft, for example, has gone further than a net-zero carbon emissions target by 2030, the company is aiming to be carbon negative by then.

Other American companies are following suit and by asking their suppliers to meet ever more exacting sustainability standards are spreading the message around the world.

Meanwhile, American companies have led the way in demanding the highest possible Leed (Leadership in Energy and Environmental Design) standards for their buildings in Ireland.

This is not entirely based on altruism, of course. In McKinsey’s latest global survey, 83 per cent of top corporate executives and investment professionals say that environmental social and governance (ESG) programmes will generate more shareholder value in five years’ time than they do today. Accenture research into responsible leadership found that companies with high ratings for ESG performance enjoyed average operating margins 3.7 times higher than those of lower performers. Shareholders also did better, receiving annual returns 2.6 times higher than shareholders of poor ESG performers.

Flexible benefits

Long before anyone had heard of hybrid and flexible working practices, American companies were setting new standards for employee benefits packages by bundling attractive options together to allow employees a much greater degree of control. Sometimes described as cafeteria or self-service benefit plans, they allow staff to vary their packages to meet their own needs.

The dividing line between pay and benefits also becomes somewhat blurred. A financial value, often expressed in points, is put on each benefit and employees know how many points they are entitled to. If the employee doesn’t want a company car or another benefit, they can use it for something else like sports club memberships, public transport season tickets, a premium health insurance plan, or anything else within reason.

Employees can also choose to trade part of the salary for upgraded benefits. This can have tax advantages on both sides depending on the nature of the benefit chosen.

Irish companies are increasingly adopting this approach to benefits as they seek to recruit and retain talent in a highly competitive labour market.