How Sustainable HRM Can Transform Your Business

The majority of staff are quiet quitting, loud quitting, stressed or restless. PwC’s Global Workforce Hopes and Fears Survey 2023 found that, despite financial uncertainties, 26% of workers say they plan to quit their jobs in the next 12 months. This is an increase from the previous year’s global average of 19%.

As employers brace for economic uncertainties, workers are concerned about professional burnout and economic uncertainty. To top it all off, organizations are facing social and political pressures to be environmentally conscious. Solving all those challenges lies at the heart of Sustainable Human Resource Management (HRM).

What is Sustainable Human Resource Management?

Sustainable HRM is concerned with the use of HRM to achieve long-term social, environmental and business goals. It explores solutions for balancing the utilization and creation of human resources and delves into practices which help organizations achieve their environmental goals. The company’s success or failure in taking an environmental approach will largely depend on its employees.

Sustainable HRM recognizes the inescapable reality that resources in organizations are finite and therefore require financial and strategic deliberation. It considers how social and environmental goals are interconnected with economic challenges, as well as opportunities, and has the power to transform your business.

Getting the basics right

It is hard to be a sustainable organization if you do not cover the basics. This includes good general working conditions in terms of fair wages, responsible management and monitoring of overtime and providing a safe work environment. These are not only the responsible aspects of HRM, but are also a good long-term investment.

Regenerating the human resource base

For businesses to thrive, we need to foster and maintain good employee vitality. This means achieving a state where an employee is in good physical and mental condition, shows resilience against work difficulties and is willing and able to invest effort into their work. One of the key characteristics of vital employees is turning energy and motivation into action.

There are numerous general approaches and specific practices that organizations can take to maintain a strong HR base and achieve employee vitality. For example, it is the new norm for organizations to search for mutually beneficial flexibility. Flexible work arrangements such as remote and hybrid working, flexitime or part-time work can improve quality and service, meet supply needs and improve staff retention. This works if flexibility is not introduced just to cut costs short term and so long as employees’ interest and voice are a key part of setting flexibility policies.

Managing employee stress and expectations

To find the optimal spot where employees present excellent performance without depleting their energy, organizations may need to double down on stress management. Employee training on this topic across all organizational levels is a good start but it will not yield much result without a regular and realistic review of workloads and expectations. Getting senior management involved can also establish a more supportive organizational culture where staff are not afraid to raise their concerns about stress. This can prevent crises where employees start to avoid work, emotionally and physically burnout or quit on the spot creating even more challenges for the staff that remains and can help avoid major mistakes being made due to stress or resource gaps.

Rethinking your diversity training

Research suggests that mandatory diversity training can do more harm than good by activating bias or sparking a backlash. Managers may see the compulsory training as a form of coercion and, to prove their autonomy, they may do the opposite to the intended effect of the training. Firstly, voluntary training focusing on people who want to be in the room tends to produce more positive results. Secondly, instead of strong-arming and policing managers a few more systemic changes can lead to more meaningful and persistent improvement of diversity and inclusion.

Embracing green Human Resource Management

Green HRM is necessary to ensure employees perform green behaviours and implement green policies. This affects virtually all aspects of people management and can be achieved by embedding environmental objectives in processes such as recruitment. If the organization is committed towards the cause of the environment, this should be reflected in the recruitment efforts.

Green recruitment may come naturally to organizations that already have an established sustainable organizational culture and reputation. In these cases, the employer can simply be open about the environmental achievements and practices that are already embedded in the organizational fabric.

However, green recruitment can also be a drive for change. Organizations that are still learning how to embrace environmental sustainability can use new recruits to produce new thoughts, fresh perspectives and commitment towards recently founded green goals. If an organization is still developing its environment-friendly practices, it is crucial that new employees who are brought into the organization support and reinforce this cultural change. When an organization communicates in the recruitment process that it is looking for employees who value the protection of the natural environment, that helps attract the right candidates and contributes to the promotion of the organization.

Implementing green induction and incentives

Green induction provides basic information about sustainability and its role in an organization’s values and culture. It also makes new employees familiar with the pro-environmental efforts of the organization (e.g. investment in eco-friendly equipment) and provides key information about their environmental policies and practices. Green induction may be a first step to engage employees to engage in eco-friendly behaviours at work and provide a foundation for potentially more advanced green training depending on the organization’s need.

To really make employees excited about taking green actions, organizations may need to consider adequate incentives. A green reward system is a combination of policies, practices and standards used to allocate financial and non-financial benefits, which are meant to motivate and recognize employees’ green performance. Green awards, special recognitions and titles (e.g. green employee of the month) can be accompanied by paid vacations or gift certificates. However, employers may want to remember that for a green company, some traditional rewards also become inappropriate, for example offering staff a bigger car with a higher carbon footprint.

Using Sustainable HRM as a business strategy

By its nature the concept of strategy represents something that is forward looking. A strategy is meant to set the vision or plan for the direction of the organization. Yet, traditional HRM practices are often criticized for maximization of short-term profits at the expense of the long-term good of employees and the organization. In these cases, HRM is not as strategic as it could be, or the strategic approach has a restricted focus.

Organizations receiving employer awards (e.g. in national, international or industry-based competitions) and attracting best talent, outperform the competition in terms of engagement in social and environmental efforts. Taking a proactive, radical and innovative stance on sustainability practices in people management can be a key strategy not just for HR department but for the whole organization. Placing long-term improvements at the centre of business strategy and culture helps organizations differentiate themselves from the competition, or at the very least keep up with it.

How to implement Sustainable Human Resource Management

The difficulties in introducing sustainable HRM may correspond with the size and complexity of the organization. Nevertheless, some of the points remain constant. In order to effectively implement and maintain sustainable HRM in any organization we need to secure the support of its leadership. This is critical to ensure that resources, such as time, are allocated to pursue sustainability. Without a clearly structured rationale, senior management may push back against the sustainable HRM ideas. The preparation of the rationale is also a chance to carefully consider what opportunities sustainability will open for the organization.

To achieve meaningful sustainability, it is crucial to listen to the staff. A key idea behind sustainable HRM is that it represents a “two-way” perspective. Employees should be given an opportunity to shape sustainability objectives from the bottom up, while the HR department also simultaneously seeks support from the organizational top.

What next?

The end goal of sustainable HRM is to create effective practices across the whole organization where sustainability is an integral part of people management. Implementing individual sustainability programmes or practices is far from what the new approach represents. Having said that, working on separate effective initiatives can be a practical early step. It can be useful for a wider transformation of HRM, as long as it is not seen as the final objective. A gradual introduction of sustainable practices can be necessary in organizations that show initial resistance to the notion of change and to introducing sustainability as a central part of organizational values, strategy or overall culture.

Sustainable HRM represents adjusting to, and even embracing, ever-shifting expectations that stakeholders have for organizations. This means that HR professionals need to feel comfortable with breaking status quo. Rather than simply enduring change, HR needs to proactively participate in talks about transformation and, where possible, lead the discussion.