A company’s human resources function must be at the heart of any attempt to embed sustainability into a company’s way of doing business. Here’s how it can work
In recent years, organisations of all kinds have been seeking ways to embed sustainability into their daily operations. This entails integrating the values, attitudes, assumptions and issues related to sustainability – call it the “sustainability mindset” – directly into the thinking, strategy, planning and operations of every department and business unit.
An organisation that sees sustainability as a separate activity – as an add-on to normal business operations rather than as connected to the “real work” of the company – is unlikely to make significant progress. In contrast, if employees believe that sustainability supports traditional core business goals, the journey becomes that much easier.
If sustainability is not embedded, employees who may be predisposed to dismiss sustainability as “the initiative of the week”, “tinkering around the edges”, or mere public relations will find it even easier to do so – certainly easier than fundamentally rethinking their operating methods and jobs. By contrast, if sustainability is embedded, it becomes part of the company’s DNA, as central to success as other basic goals.
For this reason, embedding sustainability is understood to be a basic goal for most companies that take the new demands of the age of sustainability seriously. Yet many companies find it exceedingly difficult to achieve this goal. Witness the fact that most companies issue separate sustainability reports rather than integrate sustainability into their annual reports to shareholders.
One reason for this difficulty is that companies more than 10 or 20 years old were founded in an era when sustainability and the environmental and social issues it embodies were rarely recognised as legitimate concerns for business leaders and certainly not considered central to operations or the business itself. Reinventing habits of thought and behaviour shaped by decades or even generations of history is never easy.
HR departments have a major role to play in linking company strategy and employee behaviour. Personnel systems can be seen as custodians of the company’s DNA. Just as the genetic code transmitted from parent to offspring shapes the characteristics and survival prospects of the organism, so the values, assumptions and behaviour passed on through core HR processes shape the future of the company.
Thus a company needs to incorporate sustainability into the workforce life cycle, which includes all the processes that HR uses to develop and manage the workforce. Stated this way, the idea might sound obvious. So it’s surprising to realise that relatively few companies have acted on it, even after making public commitments and significant investments to advance sustainability as a core value and objective.
In a recent Society for Human Resource Management study, companies were asked how they attempted to embed sustainability into their organisational behaviour. Most replied by saying that sustainability is included in the organisation’s mission statement or goals or is being discussed on the company’s website or in intranet communications. These are laudable first steps, but as evidence of embedding, they are superficial. Few companies reported making sustainability an integral part of their HR systems or activities. For example, only 16% of the companies surveyed reported including sustainability among the performance goals by which employees are routinely evaluated. Even fewer (9%) said they have built sustainability into their mandatory training programmes.
This situation creates both a challenge and an opportunity for HR professionals. It’s a challenge in that most companies, even those that are deeply involved with sustainability, don’t necessarily think of sustainability and HR as having much to do with one another. Changing this perception may require some educational work on your part, aimed at your HR colleagues; the line employees and managers with whom you interact; the executive leaders to whom you report, up to and including the chief executive; and others in the company who might already be involved with or helping lead the sustainability charge.
The opportunity lies in the fact that very few HR departments have yet made an effort to link sustainability to workforce life cycle processes. Thus, making a serious effort to do so – to build sustainability into the work HR is already doing – can make a dramatic difference in your company’s progress around this issue.
Core HR processes
We find it useful to think about HR processes in terms of the employee life cycle, which traces the connection of an individual worker with the company in chronological order: recruitment, hiring, onboarding, training, career development, pay, retention, promotion, and separation and retirement.
We use a specific variant called the “workforce life cycle”, which we prefer because it explicitly incorporates one of the most important tasks of the contemporary HR leader: a continual analysis of the workforce as a whole, evaluating its characteristics, capacities, strengths and weaknesses in light of the organisation’s current and evolving talent requirements. A company that is committed to sustainability needs to think about the future of its workforce in some new ways. HR leaders can play an important role in driving such thinking and exploring these evolving workforce needs at every level and within every unit of the organisation.
The table here walks you through the workforce life cycle, which we’ve organised into five broad stages: employee selection, career development, rewards and retention, performance management and succession planning, and separation.
You’ll notice that the sustainable approach column in each row begins with the words “also includes”. Our point is that the sustainable approach does not eliminate or supersede any of the traditional processes or considerations that shape workforce life cycle processes. Rather, it incorporates some new dimensions that supplement these processes and suggest additional analysis and actions on the part of HR professionals and others involved in the life cycle processes.
The importance of the fourth column in the life cycle table is a reflection of the growing complexity of HR work in a business world where the human factor is becoming more important and more complicated in managing organisations of every kind. As a result, sustainability is increasingly being embedded in the daily life of organisations and employees through processes that are designed, managed and led by HR professionals. What’s more, the age of sustainability is also creating enormous opportunities for HR professionals both to accomplish traditional HR objectives and to help build, guide and strengthen the companies they work for in innovative ways. These are exciting prospects for forward-thinking HR leaders – ones we hope they’ll take full advantage of the years to come.
The workforce life cycle:
a roadmap for the journey from traditional to sustainable HR
|Stage in cycle||HR process||Traditional approach||Sustainable approach|
|Employee selection||Employer branding||Focuses on developing or strengthening the employer’s workplace reputation to attract the most talented and desirable workers. Includes offering competitive salary and benefits, challenging work, and opportunities for career growth. Draws on and supports corporate culture and values. Conveys the employee value proposition and delivers a message strategically designed to attract and retain top employees.||Also includes sustainability- related values as a key element in the employer brand and employee value proposition – for example, by embracing causes or giving employees opportunities to do and see others doing work that is environmentally and socially beneficial.|
|Targeting and recruitment||Includes creating job descriptions and searching for qualified and attractive job applicants using many methods, from internal job posting to advertising to search firms. Targets and recruits candidates at every career stage, from recent entrants to experienced, top-tier talent from other organisations.||Also includes creating job descriptions that highlight relevant sustainability skills and knowledge, as well as finding potential employees whose work experience, skills, knowledge and values match the needs, values and beliefs of the organisation in regard to current and future sustainability goals.|
|Hiring||Includes reviewing applications and screening candidates; conducting interviews, evaluations and reference checks; making a job offer (or not); and helping negotiate agreements concerning salary, benefits, job responsibilities, reporting requirements, career opportunities and other details.||Also includes discussion of sustainability issues in the interviewing process and, for some jobs and candidates, adding sustainability-related job requirements and aligning expectations regarding sustainability-focused activities in the position and over the candidate’s career. Discussion of corporate mission and goals related to sustainability so as to ensure values alignment between company and applicant.|
|Onboarding||Provides timely and accurate information about the company: its history, culture, values, mission, strategy, practices, procedures and employee policies. Continues with orientation activities, including introductions, peer sponsoring, mentoring and early reviews to establish expectations.||Also includes basic information about the company’s point of view on sustainability, including current sustainability status, strategy and goals, and a discussion of the role that employees are playing or can expect to play.|
|Career development||Training||Includes needs assessment and provision of periodic educational programs, either in-house or outsourced, to develop employee awareness of important issues and impart work-related skills, knowledge and credentials.||Also includes training related to sustainability – for example, programmes to create awareness of current and projected environmental and social trends, as well as job-specific knowledge about those issues.|
|Career development||Helps employees establish near- and long-term career objectives and develop the additional skills, knowledge and experience needed to reach them. Assists employees in making choices that will enhance both their own careers and their ability to benefit the company, including mentoring, counselling on lateral or other career-building moves, overseas assignments, major job changes, and the need to obtain additional training or credentials.||Also includes helping employees consider assignments or career choices in areas within sustainability, such as environmental stewardship or stakeholder engagement. Helps employees identify and develop environmental and social components in other jobs and career paths throughout the organisation.|
|Support||Offers support to employees having problems on the job or in their personal lives, such as financial or legal issues, marital or other family problems, substance abuse, or health or psychological difficulties.||Also includes ensuring that company culture, policies and systems appropriately consider and address individual employee circumstances and needs, as well as encouraging mutual support among employees during times of personal or on-the-job difficulties.|
|Promotion and redeployment||Establishes criteria for promotions and other ways to reward high achievers. Helps relocate employees who are not well placed to other areas where there is a better fit, often as an alternative to termination.||Also includes consideration of sustainability-related goals, skills and accomplishments among promotional criteria. Considers employees’ personal aspirations and objectives, especially as related to sustainability, when proposing new job assignments or relocations.|
|Rewards and retention||Pay and incentives||Rewards employees for achievement, typically based on performance appraisals, job-specific goals, and the financial performance of the department, business unit, or enterprise as a whole.||Also includes sustainability in performance appraisals as well as offering meaningful incentives and rewards for achieving sustainability-related goals, such as accident reduction, environmental protection and strong stakeholder relations, that are tied to business unit and enterprise-wide sustainability objectives.|
|Retention||Sets and implements policies, procedures and practices to meet the needs of employees and establish a working environment that encourages successful employees to remain.||Also includes strategies to retain and motivate top talent on the basis of their environmental and social performance as well as that of the organisation.|
|Compliance and discipline||Establishes rules regarding employee behaviour, including legal, regulatory and ethical requirements of doing business, as typically embodied in codes of conduct. Establishes fair processes to enforce rules and impose disciplinary actions when appropriate and participates in the disposition of those actions.||Also includes development of policies and procedures that mandate behaviours related to sustainability – that is, legal, ethical and otherwise expected actions related to environmental or social impacts. This may require amending the organisation’s code of conduct or other HR-related policies to reflect these considerations.|
|Performance management and workforce planning||Performance appraisal||Establishes, maintains and updates system for measuring employees’ job effectiveness, performance and other outcomes related to individual job responsibilities and business unit results.||Also includes ensuring that the performance appraisal system measures employees’ performance related to sustainability – for example, meeting environmental goals and participating in efforts to create benefits for communities or other stakeholders.|
|Workforce planning||Includes analysis of talent needed to meet business goals, impact of possible changes in business conditions, and potential disruptions in labour supply and demand. Develops workforce plans based on projected trends in strategy, markets, technologies and other circumstances.||Also includes consideration of how emerging environmental and social risks and opportunities will require new knowledge, skills and mindsets, as well as ways new and current employers might bring sustainability values, concerns and expectations into the workplace.|
|Labour pool analysis||Includes research into current talent trends, demographics of the workforce, educational programs, skill-level attainments, and social and economic factors affecting recruitment strategies, availability and cost of labour.||Also includes consideration of the impact of sustainability awareness, education and competencies on the employment pool.|
|Separation||Early termination||Sets and administers policies for ending employment as a result of voluntary resignation, layoff or dismissal.||Also includes consideration of the social and economic impact of early termination decisions, and attempts to maximize benefits and minimize harm to employees, families, communities, other stakeholders and the organisation itself.|
|Retirement and postretirement||Develops and administers policies regarding retirement and related benefits, including pension, health care benefits and individual investment accounts. Assists employees with retirement planning.||Also includes consideration of the social and economic impact of retirement on individuals, families and the organisation; works to fulfil pension obligations while aligning pension-related investments to organisational sustainability commitments; ensures open communication with present and future retirees concerning employee rights, options and obligations.|
This is the third article in a three-part series on the role of human resources and employees in advancing sustainability within their organisations. The first article dealt with how HR can play a lead role in modifying corporate culture to support sustainability; the second article focused on employee engagement and organisational capacity, describing the partnership that ought to exist between HR and those working on sustainability.
The articles are based on the new book – Talent, Transformation and the Triple Bottom Line: How to Leverage Human Resources for Sustainable Growth – by Andrew W Savitz with Karl Weber (Wiley, 2013). For more information on the overlap between human resources and sustainability, visit www.savitzreport.net.Employee engagmeent human resources Sustainable Strategy
Employees can be the greatest source of sustainable innovation within any company. Facilitating and acting upon employee insight and feedback can help your company foster an innovative sustainable culture. Join Alcatel-Lucent, Royal Bank of Scotland in our free live debate.