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Govt studying method to value voluntary work

Govt studying method to value voluntary work

business Updated: Feb 01, 2015 23:28 IST
Ramsurya Mamidenna
Ramsurya Mamidenna
Hindustan Times
CSR,Corporate Social responsibility,NGO

The government, which is actively considering adding employees’ voluntary work to companies’ quota of mandatory corporate social responsibility (CSR), is studying a method to put a price tag on such work which is typically done for free.

The Companies Act stipulates that organisations should spend at least 2% of the net profit towards social commitments. And India@75, a representative group which includes the likes of Tata Sons, Infosys, TCS, and non-governmental organisations (NGOs), has suggested a method to evaluate pro bono work based on the compensation structure adopted by companies.

Tata Sons chief ethics officer Mukund Rajan, who is a part of India@75, told HT that the valuation model would consider the manager-level employee’s position in the corporate hierarchy, his experience and the nature of his contributions.

“At India@75, we reviewed compensation structures across a range of industries mapped against individuals who occupied different positions in the corporate hierarchy, and came with varied levels of experience. We then used a conservative benchmark — the 25th percentile of compensation — to derive a value for managers’ pro bono contribution on a per-hour basis,” he said.

The ministry of corporate affairs is currently examining this, and if accepted by the government, voluntary work will contribute to companies’ compulsory CSR.

Currently, only 10% of the Indian workforce is engaged in pro bono work. But given the growing importance of an inclusive style of company management, it is estimated that more companies will take it up.

A study by Taproot Foundation estimated that the value of pro bono work in the country would be $10 billion (Rs 62,000 crore) by 2022. Taproot is a non-profit organisation which provides business talent to organisations working to improve society.

Other than benefitting companies, voluntary work is also expected to reap benefits for employees. “Apart from bringing employer recognition, pro bono work is also seen by several corporates as a leadership-development mechanism,” said Rajan.

He estimated that the current value of the Tata Groups’ pro bono work is about Rs 28 crore. As many as 25,000 employees of the 600,000-plus workforce are involved in such voluntary work, he added.

First Published: Feb 01, 2015 23:11 IST