Sustainability in Human Resource Management
Relevant sustainability topics in human resources
Let’s begin the topic of „Sustainable HR“ with a quote, although it is already 36 years old, it is more relevant than ever.
The sustainability definition by the United Nations from 1987 states:
„Sustainability means meeting the needs of the present without compromising the ability of future generations to meet their own needs.“
In our 2022 HR Report and 2023 HR Trends, we have already addressed some important current topics in human resources.
And the Mercer Global Talent Trends Study 2023 clearly shows that sustainability in human resource management is becoming increasingly important!
In other words, the HR department can have a tremendous impact on companies if empowered accordingly.
In this article, you will gain insights, thoughts, and tips for the path towards sustainable human resource management.
Sustainability in Human Resource Management
Currently, many companies do not yet see a connection between their human resources and holistic sustainability in the company.
They often face the following questions:
Has HR recognized sustainability as a strategic focus?
Is it positioned in the corporate strategy? Strategic HR topics should be derived from it, otherwise, they are not strategic, right?
Is sustainable personnel policy solely the responsibility of HR?
Does sustainability mean more than just turning off the lights and promoting recycling?
Sustainable Human Resource Management is about the people and how we can sustainably shape the work environment for them in the long term.
This term can easily be applied to areas such as health and well-being, diversity and inclusion, training and development, pay equality, and many others.
What have companies already been able to implement in this regard?
What have we, as HR, actually achieved?
Which approaches need to be taken up anew to achieve long-term well-being?
Given the ongoing skilled labor shortage and global economic crises, companies are the most important reference points for employees.
Relevance and Attitude
The Mercer study showed the importance of employers taking a clear stance. They must demonstrate enough relevance to adapt to the ever-changing values of their employees, customers, and investors.
However, this assumes that corporate cultures and processes have already been designed to be adaptable from the start. Only then can organizations continue to pursue their corporate goals, work standards, and investment strategies during times of crisis and demonstrate their stance.
This not only promotes the trust of stakeholders but also contributes to consistent and possibly even better business results.
One concrete component of sustainability is the three areas of ESG (Environment, Social, Governance).
ESG – Environment, Governance, Social
So, what is ESG all about?
The diagram below illustrates the individual ESG criteria.
In HR, the areas of Social and Governance are particularly relevant.
ESG criteria at a glance – Diagram based on a screenshot by Bianca Nina Hoffmann.
Source: ESG criteria: Definition and explanation of sustainability ratings.
URL: https://praxistipps.focus.de/esg-kriterien-definition-und-erklaerung-des-nachhaltigkeits-ratings_125412
How are companies dealing with it?
According to the Mercer study, 83% of the surveyed companies in the DACH region prioritize environmental and ecological sustainability, reaching a record high.
In second place, with 70%, are the focus areas of diversity, equity, and inclusion.
With 65%, the third-ranked focus area of a healthy work culture and sustainable work practices indicates that companies are heavily engaged in crisis management, especially during and after the COVID-19 pandemic. They are aware of the burden on their employees and their personal lives and take responsibility for ensuring that wages enable a sufficient standard of living through the topic of „living wages.“
43% of German-speaking companies stated that integrating broader transformation initiatives is the most successful ESG measure with the greatest impact on the organization.
Furthermore, the connection between ESG goals, the company’s purpose, and visualizing them for employees is another important measure, accounting for 32%.
The study also highlights the significant importance of corporate leadership in the effectiveness of ESG measures. About a quarter of the surveyed
HR executives see integrating ESG metrics into the scorecards of executives and the clear positioning of management regarding ESG goals as crucial success factors for these measures.
However, it is striking that one-fifth of the surveyed companies in the DACH region have not taken any measures to introduce and implement ESG measures.
My recommendations for your human resource management
The target image should be defined in collaboration with management. This will enable the development of an ESG strategy and its long-term integration into company goals and tools.
Establish the topic of „sustainability“ in the company not only on a social level but also in the thinking and actions of all employees.
The tasks of sustainable human resources include:
- Long-term and future-oriented personnel planning and organization.
- Maintaining and promoting employees‘ deployability (e.g., health courses, strategic personnel development measures, safety training).
- Safeguarding the mental and physical health of employees.
- Promoting young talent and new talents.
- Offering development opportunities for existing employees.
- Analyzing transparency about existing skills and the skills needed in the future.
- Ensuring fair compensation.
- Transparency of company goals.
Typical elements of Sustainable HR include:
- Flexible and mobile working options (flexible hours, short-time work, flextime, etc.).
- Family-friendly working conditions.
- Regular safety training for handling occupational hazards and accidents.
- Transparent compensation principles and payment, as well as provisions (health insurance, insurance, company-supported pension plans, etc.).
- Corporate health management (CHM) as a preventive measure, e.g., in the form of fitness, relaxation, and sports courses or healthy food and beverage offerings.
- Well-being – people-centered design of workplaces, processes, and conditions.
- Training and development measures.
- Feedback systems.
- Incentive systems (bonuses) and transparent development criteria with a long-term perspective.
- Avoiding short-term job cuts.
- Regular communication and information to employees.
- Socially responsible approach to dismissals and outplacement.
- Definition, implementation, and adherence to leadership guidelines and appreciative employee leadership.
Conclusion:
The topic of sustainability in human resource management is no longer new. On the contrary, the relevance has now been recognized by many HR professionals and managers.
ESG criteria are no longer only important for large corporations but also for SMEs. They must be complied with for your company to remain competitive and successful in the market.
However, it seems that there are still too many unanswered questions regarding the introduction of measures and targeted implementation, both at the management level and within departments.
Develop an ESG strategy that suits your company to promote sustainable thinking and actions among your employees!
How does it work?
Contact me; as an experienced HR interim manager, I will show you how to implement ESG measures early on to maintain the necessary flexibility even in times of crisis and provide stability for your employees and company. HR has a further role to play in this, starting with an authentic target image.
What could your realistic target image look like?
What is the maturity level of the mentioned elements?
We will work with you to develop the next action plan for sustainable people management!
Contact me and my team; we are here for you and your employees!
Yours sincerely,
Helga Jungnickl
In the next article of our series on current HR topics, we will focus on „well-being in the workplace and well-being in the company.“
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