Running an “ethical business” has become a common concern in the past decade or so. This is because ecological and social issues are at the forefront of many customers’ minds. This is particularly the case with recent generations, namely millennials and Gen Z. Not only that, they are more likely to pay attention to the ins and outs of a business than previous generations and to potentially make purchasing decisions based on what they find.
However, it isn’t always easy to balance running an ethical business with running a successful business. Less ethical practices are usually cheaper and easier, right? How can an ethical business still be successful?
The simple fact of the matter is that an ethical business has a better reputation than other businesses that don’t employ ethical business practices. This is because of the aforementioned increased awareness of environmental and social issues.
Customers appreciate transparent companies which make their practices clear. If a business hides things, it suggests that there’s something sinister to hide. Customers are also willing to research companies and share their findings and experiences on social media. This can be a death knell if your company becomes known for unethical practices, especially if your brand isn’t yet established.
Ethical business practices aren’t just for massive corporations. It’s something that you should be thinking about as soon as possible so that it’s integrated into the makeup of your business from the beginning. It is considerably more difficult to backtrack and change your practices than to just start on the right foot in the first place.
As you can expect, having a good reputation can do wonders for gaining loyal customers, especially if it’s clear that you aren’t just implementing ethical practices for marketing purposes. People are cynical and can see through a cheap trick to win brownie points. Ethical business practices should be the building blocks of your brand, not simply tacked on.
However, this good reputation doesn’t just improve your relationships with your customers, it can also affect your employees. If your business has clear ethical values that are put into practice, then your employees are more likely to stick to those values and provide a better service.
Employees also prefer to work somewhere that they believe in. Current employees are more likely to experience job satisfaction, as most people like to be a part of something positive. This environment also fosters a better company culture. Happy employees are secure employees, which means that they will be far less likely to leave their jobs.
As well as keeping current employees around and happy, a good reputation will also attract other skilled potential hires. Good employees don’t just look for a competitive salary (although that does help), but they also care about working for ethical businesses.
According to one study, an enormous 86% of millennials prefer working for a business that conducts itself ethically, even if it means earning less money. True, this study only looks at millennials, but millennials are already the largest group in the workforce and the next generation seems to follow a similar pattern.
As you’d guess, ethical business practices start early. Define your core values as early as possible, so that you can stick to them in every aspect of your business. Every business decision should be filtered through these values, which means that your strategy, people, and processes all go together.
For example, many companies implement a blind hiring process while focusing on decision-making tendencies, experience, and qualifications over anything else. A blind hiring process hides any details that reveal someone’s race, gender, religion, or socioeconomic background. This means that any unconscious biases won’t play a part in the hiring process.
Ethical business practices don’t just refer to social ethics, however. Many customers and employees are particularly interested in green and sustainable business practices. These practices, such as Greenstone (Sustainability, supply chain and ESG software solutions, Greenstone offers a lot in terms of helping your business becoming reliable) are designed to reduce the carbon footprint of your business.
For example, if your business is run from separate premises, there are plenty of things that you can do to reduce its environmental impact. For example, you could switch to using green energy, either by only using a green energy provider or by installing solar panels and generating your own electricity.
You could also reduce your company’s energy and water usage by getting rid of waste, perhaps by using smart thermostat technology or ensuring that all the lights and electronic equipment is switched off overnight. When it comes to things like wastewater, you could work with someone like this swppp houston company to help you put plans into place to ensure that this is dealt with in the best way possible.
One thing that holds many businesses back from implementing more ethical businesses is that they can impact the success of the business. For example, investing in solar panels is more expensive than simply continuing to use an ordinary energy provider. Manufacturing products using green practices might be more expensive and labor-intensive than cheaper and less environmentally friendly methods.
Even some socially ethical practices involve a certain investment. For example, certain leadership decisions might involve spending more to keep your employees comfortable in the office. Supporting employees may involve higher wages, more benefits, or sick or vacation time.
However, the reputation gained by these practices may outweigh the momentary costs. If potential hires are aware of a better working environment and ethical practices, then you could get some serious talent on your team. Also, customers are sometimes willing to pay more to support ethical businesses.
While ethical business practices might take more effort and initial investments to pull off, they can prove beneficial for your business and help it to be more successful. Some green practices even save money in the long run, such as generating electricity yourself. Yes, the initial investment might cost more money, but you save on utility bills. Running a successful business and an ethical business are by no means mutually exclusive goals. Business training courses provided by experts like Anthony Tedd can help you to learn more about how to grow your business into a true success story.