Sustainable Approaches to HR
Management
Dr. Shane Hodgson
HR Directors’ Conference, Johannesburg
June 25th 2013
Defining Sustainability
Sustainability is generally defined as the “ability to meet the needs of the present
without compr...
Definitions of Sustainable HRM
 However - Sustainable human resource management (HRM) is usually defined as
“…using the t...
So – Currently Sustainable HR Management is …
 Firstly - using HR to promote corporate sustainability by hiring, developi...
What is a sustainable approach to HRM?
This means both managing Human Capital in a sustainable way, and supporting broade...
HR Supporting Sustainability of the Organisation
 "Forward thinking HR leaders in triple bottom line sustainability focus...
HR’s Role in Supporting Sustainability as an Approach
 The HR function is critical to achieving success in a sustainabili...
HR supporting Organisational Approaches

SHRM Foundation Executive Briefing “ HR’s Role in Corporate Social Responsibility...
HR Building a Culture of Sustainability
 When companies are able to reduce their costs and increase their sales via their...
Relevance of Strategic HRM in Corporate Sustainability
 Today, Sustainability is typically connected to HRM through the t...
So – Sustainable HR Management is …
 Firstly - using HR to promote corporate sustainability by hiring, developing, measur...
Setting the Scene – What’s Changed in the World Economy?
 The world has changed. We are no longer living on a planet rela...
Setting the Scene – And So?
 As the world struggles to emerge from the global crisis, some 200 million people—
including ...
In South Africa, To Get to Where We Want to Go…
…we need to use a different road
To achieve the NDP’s economic goals by 20...
What is the HR Function Really Good At?

15
But We Need to Build a Sustainable Labour Ecosystem

For example, in the Mining sector - the most sustainable beneficial l...
In the Future, No More T- Accounting Approach to Skills
 “Send forth thy bread on the face of the waters, For in the mult...
Everyone is a Leader
 “Even the most malleable minds can only attend to so much. With 25 billion gigabits of
digital info...
Everyone Needs Skills Development
 "Skills have become the global currency of the 21st century. Without proper investment...
Town and Gown - Co-operative Education
 The pool of talent within South African society is nowhere near sufficient to mee...
So What Else Do We Need to Do Differently?
It is my contention that we need to adopt a completely different approach to th...
Talent Acquisition – Hunting, Fishing or Farming?
 If you are fishing you will be using Help Wanted placards, want ads, b...
Talent Pool vs. Talent Community
“A community is about shared values and a conscious choice to live in that location. A
ci...
Attraction, Retention and Sustainability
In a survey commissioned by National Geographic magazine in February 2008, more ...
So What’s Stopping Us?
“Human resources are like natural resources; they're often buried deep. You have to
go looking for ...
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Sustainable approaches to hr 20 june2013 v0.2

  1. 1. Sustainable Approaches to HR Management Dr. Shane Hodgson HR Directors’ Conference, Johannesburg June 25th 2013
  2. 2. Defining Sustainability Sustainability is generally defined as the “ability to meet the needs of the present without compromising the ability of future generations to meet their needs.” http://www.un-documents.net/ocf-02.htm Reproduced f rom Chapter 5 in “Managing Human Resources f or Environmental Sustainability” by Jackson, Ones and Dilchert (2012)
  3. 3. Definitions of Sustainable HRM  However - Sustainable human resource management (HRM) is usually defined as “…using the tools of HR to create a workforce that has the trust, values, skills and motivation to achieve a profitable triple bottom line” (the simultaneous delivery of positive results for people, planet and profit, according to SHRM, 2011)  Yet, making sustainability actionable and tangible is much harder than adding words to the mission statement. Simply attaching the word “strategic” to HRM failed to accomplish real change, and simply attaching the word “sustainability” to HRM may similarly raise expectations without results (Boudreau, J. W. (2003).
  4. 4. So – Currently Sustainable HR Management is …  Firstly - using HR to promote corporate sustainability by hiring, developing, measuring and rewarding people for achievements in sustainability / CSR / CSI / CSV  Secondly - ensuring the sustainability of the HR function within the organisation by emphasising its strategic relevance 4
  5. 5. What is a sustainable approach to HRM? This means both managing Human Capital in a sustainable way, and supporting broader sustainability with HRM practices ... for example:  Sustainable Management of HRM • Recruitment and Talent Management • Competency development • Employee Lifecycle Management and Outplacement  Supporting Sustainability with HRM • Sustainable Compensation and Performance Management • Driving Employer Branding and Diversity • Promoting Collaboration and Partnering • Supporting Organisational Learning and Knowledge Management
  6. 6. HR Supporting Sustainability of the Organisation  "Forward thinking HR leaders in triple bottom line sustainability focused organizations can use the framework" they have at their disposal "to bring clarity to the strategic dialogue in their companies, and can help build the alignment capacity to convert dialogue into action" (Colbert, et al, 2007).  Very few HR professionals are well skilled in sustainability. "As a result, business decisions about critically important sustainability issues may be missing the input of those who have a deep understanding of implicit HR challenges." (Wirtenberg, et al, 2008) HR’s Role in Building a Sustainable Enterprise: Insights From Some of the World’s Best Companies. Wirtenberg, Harmon, Russell and Fairfield Human Resource Planning 30.1 and also http://www.valuesbasedleadershipjournal.com/issues/vol4issue2/sustainability.php 6
  7. 7. HR’s Role in Supporting Sustainability as an Approach  The HR function is critical to achieving success in a sustainability-driven organization. Sustainability practice pervades every aspect of doing business and needs to be embedded across an organization at all levels, becoming an ongoing change process. Since the prime focus and skills of HR professionals include organizational process, change management and culture stewardship, they should take a leading role in developing and implementing sustainability strategy. Examples of sustainable HRM practices include:  Encouraging employees, through training and compensation, to find ways to reduce the use of environmentally damaging chemicals in their products.  Assisting employees in identifying ways to recycle products that can be used for playgrounds for children who don’t have access to healthy places to play.  Designing a company’s HRM system to reflect equity, development and well-being, thus contributing to the long-term health and sustainability of both internal (employees) and external communities.  Emphasizing long-term employment security to avoid disruption for employees, their families and communities. SHRM Foundation Executive Briefing “ HR’s Role in Corporate Social Responsibility and Sustainability” 2011 7
  8. 8. HR supporting Organisational Approaches SHRM Foundation Executive Briefing “ HR’s Role in Corporate Social Responsibility and Sustainability” 2011 8
  9. 9. HR Building a Culture of Sustainability  When companies are able to reduce their costs and increase their sales via their sustainability initiatives, the surrounding communities benefit. Not only are there decreases in water and air pollution, but when the companies are financially healthier, there is less of a need for layoffs and unemployment compensation, the local tax base is greater, people have more spending money, and that supports increases in regional commercial development.  To the extent that general managers, Sustainability Coordinators, and Human Resource executives can take a comprehensive, Strategic HR approach by incorporating many of the components described above, their organization can achieve a sustainability culture, leading to sustainable financial success for the organization, and for the surrounding community. The Role of HR in Achieving a Sustainability Culture, Liebowitz, 2010 9
  10. 10. Relevance of Strategic HRM in Corporate Sustainability  Today, Sustainability is typically connected to HRM through the traditional HR paradigm – service delivery, client satisfaction, and HR policies and practices, such as child labour, worker representation, health and safety.  Significant evidence suggesting that human resource practices do, indeed, associate with financial outcomes, though whether they cause changes in financial outcomes remains unclear.  “Sustainability” is increasingly stated as an organizational goal, and incorporated into organizational mission statements. Yet, without a deep and logical connection between the talents of the organization and specific and measurable sustainability outcomes, such statements can easily become empty rhetoric.  A talent decision science articulates the connections between HR investments, their effect on human capacity, and the impact of human capacity on core processes and resources that most affect sustainable strategic success (Boudreau & Ramstad, 2002). Boudreau, J. W. (2003). Sustainability and the talentship paradigm: Strategic human resource management beyond the bottom line 10
  11. 11. So – Sustainable HR Management is …  Firstly - using HR to promote corporate sustainability by hiring, developing, measuring and rewarding people for achievements in sustainability / CSR / CSI / CSV  Secondly - ensuring the sustainability of the HR function within the organisation by emphasising its strategic relevance  And Thirdly – managing human resources in a sustainable fashion (this is my addendum and the core of my presentation today) 11
  12. 12. Setting the Scene – What’s Changed in the World Economy?  The world has changed. We are no longer living on a planet relatively empty of humans and their artefacts, but rather in the “Anthropocene era” (Crutzen, 2002), in a full world, where what we do can dramatically alter our life-support systems.  All our traditional economic models and systems were developed in a world empty of humans and full of resources. We now need a different view of our economy, one that “…respects planetary boundaries, that recognizes the dependence of human well-being on social relations and fairness, and that recognizes that the ultimate goal is real, sustainable human well-being, not merely growth of material consumption”  Businesses being wasteful with resources (natural and human among others) might have made sense when there appeared to be a limitless supply. For example, many people ‘benefiting’ from the asset bubble of property and commodities in the first decade of the 21st century did not worry about the unsustainability of continuing large scale consumption of goods, services and debt until the financial and economic crises started in 2007. The consequences of such consumption without balancing renewal or reproduction had widespread implications for current and future generations especially in Europe and the USA. HRM contributed to the bubble through rewards given for short term illusions of performance which turned out to not reflect the reality of value creation and for plundering pension resources of current and former employees so that the remainder is insufficient to meet the pension commitments. (Ehnert and Harry, 2012) “Building a Sustainable and Desirable Economy-in-Society-in-Nature” Costanza et al, 2012, New York. United Nations Division for Sustainable Development. 12
  13. 13. Setting the Scene – And So?  As the world struggles to emerge from the global crisis, some 200 million people— including 75 million under the age of 25—are unemployed. Many millions more, most of them women, find themselves shut out of the labour force altogether. Looking forward, over the next 15 years an additional 600 million new jobs will be needed to absorb burgeoning working-age populations, mainly in Asia and Sub-Saharan Africa.  The distribution of jobs within society—and perceptions about who has access to opportunities and why—can shape expectations for the future and perceptions of fairness. Children’s aspirations may be influenced by whether their parents have jobs and the types of jobs they have.  Over and above the obvious economic benefits of employment, jobs influence how people view themselves, how they interact with others, and how they perceive their stake in society. Jobs also can have collective consequences. They can shape how societies handle collective decision making, manage tensions between diverse groups, and avoid and resolve conflicts. World Bank. 2012. World Development Report 2013: Jobs. Washington, DC: World Bank. 13
  14. 14. In South Africa, To Get to Where We Want to Go… …we need to use a different road To achieve the NDP’s economic goals by 2030:  The SA economy has to increase 2.7 times  Real per capita income has to increase 2.4 times  People employed have to increase from 13 million to 24 million  Capital formation needs to increase from 17% to 30% of GDP  Exports need to grow by 6% a year  In order to achieve this, the SA business sector will have to triple in size Business Leadership South Africa Review 2012 14
  15. 15. What is the HR Function Really Good At? 15
  16. 16. But We Need to Build a Sustainable Labour Ecosystem For example, in the Mining sector - the most sustainable beneficial legacies that community development programs around a mining operation may leave are in the skills and capacities that training, employment, and education programs for local people provide. The essential element of a sustainable community development program is that it can survive without input from a mining company, especially after the mining project is finished. Thus, community sustainability can be supported by mining practices that help convert one local asset, non-renewable natural resource capital, into another local asset, sustainable human and social capital. It is important to note that in South Africa, with its migrant labour system, very often each mine impacts two communities; the community living in the shadow of the mine headgear and also the community in the labour sending area, bereft of its menfolk and economically deprived. Community Development Toolkit, ICMM 16
  17. 17. In the Future, No More T- Accounting Approach to Skills  “Send forth thy bread on the face of the waters, For in the multitude of the days thou dost find it” Ecclesiastes 11 verse 1 from Young’s Literal Translation http://yltbible.com/ecclesiastes/11.htm  We can no longer afford to have a narrow and mostly internal focus on skills development. Research in Canada and Australia has shown that social capital is a necessary condition for sustainable community development as it enhances linking ties that increase access to resources outside the community (Dale and Newman, 2008 from Community Dev. J. (2010) 45 (1):5-21)  As an example – while mines become more automated, by definition they will directly employ less and less members of the community. Also, many mines are in remote and inhospitable regions, which often means that once the mine closes the surrounding community perishes. So we cannot afford to simply train a few local people in mining skills and expect that to be good enough. Even the addition of some portable skills and adult basic education does not discharge our moral responsibilities. 17
  18. 18. Everyone is a Leader  “Even the most malleable minds can only attend to so much. With 25 billion gigabits of digital information getting created every day, each of us is becoming ignorant faster. Senior executives have limited time and attention. A problem or an opportunity has to be big to elbow its way into a CEO's consciousness — and by the time it does, it's often too late for the organization to intercept the future.  In the future, a company that strives to build a leadership advantage will need more than a celebrity CEO and a corporate university that serves up tasty educational morsels to the "high potentials."  It will need an organizational model that gives everyone the chance to lead if they're capable; and a talent development model that helps everyone to become capable.” Gary Hamel and Polly LaBarre, 2013, from http://blogs.hbr.org/cs/2013/04/where_does_leadership_sit_in_y.html 18
  19. 19. Everyone Needs Skills Development  "Skills have become the global currency of the 21st century. Without proper investment in skills, people languish on the margins of society, technological progress does not translate into economic growth, and countries can no longer compete in an increasingly knowledge-based global society. The OECD Skills Strategy is designed to help countries build better skills policies and turn them into jobs, growth, and better lives." - Mr. Angel Gurría, Secretary-General of the OECD.  Does South Africa invest enough in education and training? South Africa spent 4.8% of its annual income on education in 2009, compared to the OECD average of 6.2%.  How smooth is the transition from school to work for South Africa’s youth? In 2012, the unemployment rate of South Africa’s youth was 49.2%, a high rate compared with the OECD average of 17.1%  Is there scope to improve skill utilisation among South Africa’s youth? The participation rate for youth (aged 15/16-24) was 26% in 2011. In 2009, the rate of South Africa’s youth neither in employment nor in education or training (NEET) was 32.8%, nearly double the OECD average of 18.6%.  To what extent are South Africa’s older workers supplying their skills to the labour market? In 2011, only 40% of people aged 55 to 64 were in the labour force, compared to an OECD average of 58% http://skills.oecd.org/informationbycountry/southafrica.html 19
  20. 20. Town and Gown - Co-operative Education  The pool of talent within South African society is nowhere near sufficient to meet our needs. We need to engage with learning institutions to co-develop curricula, internships and work exposure programs  Co-operative education programmes are instrumental in creating a talent pool, and afford programme participants the opportunity to clarify their career choices by being exposed to workplace realities.  For example, Boeing Co. embarked on a partnership with Delaware County Community College in 2005 after it could not find enough workers skilled in sheet metal assembly and composite fabrication, even after drawing from its own ranks of previously laid-off workers. Boeing worked with the community college to create an instructional program and then enrolled new hires in it, or sent other employees for retraining.  Even if they will not get a chance to hire bright high school students for several years while they are in college, companies want to get on the students' radar screens early. Lockheed Martin Corp sponsors teams at two area high schools who participate in the First Robotics engineering competition. About 80 minority students from eight area high schools spend 11 weeks at Lockheed learning about engineering. So eager is Lockheed to cultivate its future science workforce that it sends volunteers into second- and thirdgrade classes at elementary schools to act as reading mentors for age-appropriate selections about technology https://ujdigispace.uj.ac.za/bitstream/handle/10210/2731/Contribution%20of%20cooperative%20education%20in%20the%20gro wing%20of%20talent.pdf?sequence=1 and http://articles.philly.com/2008-06-12/news/24990276_1_charter-school-minoritystudents-reading-mentors 20
  21. 21. So What Else Do We Need to Do Differently? It is my contention that we need to adopt a completely different approach to the way we think about our talent pipeline; the way we think about developing leadership skills in our organisations; the way we interact with learning institutions. If we ask a Talent Director to define talent, we will likely get the definition from dictionary.com, where talent is defined as both:  A special natural ability –or A capacity for achievement or success. ‘If we take a more practical approach to talent in business, we might define talent as “anything that predisposes an individual to success in a position or organization.” Said another way, talent is situational’ (Jason Lauritzen, 2010 from http://www.hci.org/blog/what-talent). In my own layman’s language then, we define talent as being that skill needed to succeed in our organisations as they are currently. If we ask the young new entrants to the organisation what talent is, they will say “I have talent! Recognise me! Develop me!” There is an inevitable difference between the two views. We in business are tending to classify humanity as whether or not they are “good for something”; turning them into Heidegger’s “standing reserve”, not good in and of themselves but only good to the extent with which they meet our needs. http://www2.hawaii.edu/~zuern/demo/heidegger/guide5.html 21
  22. 22. Talent Acquisition – Hunting, Fishing or Farming?  If you are fishing you will be using Help Wanted placards, want ads, billboards, radio ads and job postings on job sites, job/career fairs and college recruiting. They fill about a third of all jobs. Like fishing, they assume that most any catch will work. They involve a lot of waiting or, if you are using a net, a lot of sorting to find the tasty fish and get rid of the not so tasty.  When you are hunting, you are focused on a particular group with particular characteristics. You don’t ask your engineers for referrals to accounting people. You are using professional networking sites for the data, old-school recruiting (be it in-house, contingency or retained, or the services of an unbundled search service) and the use of employee referrals and referral programs. You are the one moving toward the object of your desire, but still standing far enough off that they don’t spook. These methods fill about a third of the jobs as well.  Training programs for your current and prospective employees, choosing an internal candidate, having an interactive web presence including your website, blog, LinkedIn presence, Facebook presence, Twitter and even a YouTube presence are all farming or husbandry methods and fill the last third. With “farming” you have a bit more control. You can engage with the right people before you need them, establish a “pipeline” and become better known as a company that values its employees. http://hamptonexecutivesearch.com/tools-and-classes/talent-acquisition-are-you-fishing-hunting-or-farming/ 22
  23. 23. Talent Pool vs. Talent Community “A community is about shared values and a conscious choice to live in that location. A citizen of a community contributes to it in terms of communication (conversation), collaboration and the common good. A talent community has those ingredients as its cornerstone; developing, implementing and building online talent communities for targeted talent shares common interests and values to create and grow relationships” (Marvin Smith, from http://talentcommunity.net/2012/01/10/what-is-a-talent-community/). Relationships are built with a talent community primarily through content. While recruiting has a vested interest in marketing jobs to the target audience, research indicates that profession or affinity focused content is more effective. In other words, it is better for your organization to be seen as sharing an affinity for the community as opposed to just giving them a job feed. http://www.citehr.com/377200-difference-between-talent-pools-talent-communities.html 23
  24. 24. Attraction, Retention and Sustainability In a survey commissioned by National Geographic magazine in February 2008, more than 80% of U.S. workers polled said they believe it is important to work for a company or organisation that makes the environment a top priority. Latest research from the Kenexa Institute suggests that “...an organisation’s business choices that support the environment such as recycling, energy conservation and vendor selection have a significant influence on employees’ engagement levels” An integrated report is a new requirement for listed companies in South Africa (King III, 2010) The over 450 companies listed on the Johannesburg Stock Exchange (JSE) will be required to produce an integrated report in place of their annual financial report and sustainability report. An integrated report gives users an all-round view of the company by including social, environmental and economic performance along with the company’s financial performance.
  25. 25. So What’s Stopping Us? “Human resources are like natural resources; they're often buried deep. You have to go looking for them, they're not just lying around on the surface. You have to create the circumstances where they show themselves.” Ken Robinson I believe we as HR professionals have lost our moral sense. As long as we try to be better at accounting than the finance department we will never be able to draw the organisation into a new way of operating and thinking. So our new mantra should be “ Everyone’s talent; employees are still part of our community even after they leave us; we need to develop the entire ecosystem in which we operate and not just those parts that are immediately useful to us; we need to collaborate with learning institutions to develop content and assessments and we need to open our doors and resources to the community at large.” As a proverb says ‘Give a man a fish and you feed him for a day. Teach a man how to fish and you feed him for a lifetime’. However, sustainability is not about learning ‘how to fish’ but about understanding what the fish itself needs to grow and reproduce itself – and to make sure that these conditions are sustained.(Ehnert and Harry, management revue, 23(3), 221-238) Contact me at zimpsych@hotmail.com if you’d like to collaborate on developing this line of thinking more 25
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