Sustainability in HR management: What it really means...

... and why companies should not do without itn

It's the people that matter! The people in the company, their skills, creative ideas, motivation and much more ensure success. This applies even more than usual to the challenge of implementing sustainability. But how does sustainability come into HR management? How can a contribution be made to sustainable corporate success? We explore these questions in this blog post.

Firstly, we show what long-term orientated HR management is. We then expand on these considerations to explain how sustainability in HR management becomes the basis and promoter of sustainability throughout the entire company.

The article is therefore aimed in particular at HR managers, i.e. managers in small teams or companies, as well as HR officers or members of an HR department for medium-sized companies, large companies and corporations.

Contents

• What is sustainable human resources management?
• Transferring the principle of sustainability to personnel.
• Typical tasks of sustainable human resources management.
• Typical components of a sustainable human resources system.
• What does sustainability mean in HR management?
• Expertise for sustainability in personnel management.
• Tasks for sustainability in personnel management.
• Goals for sustainability in personnel management.
• Conclusion: Sustainable companies build on sustainability in HR management.

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Sustainable human resources management

To begin with, it is important to clearly define a few terms and differentiate between them in detail. The terms sustainable human resources management, sustainable HRM (human resource management) or sustainable personnel management initially mean the same thing synonymously. Personnel planning and organisation are carried out with a long-term focus in terms of the careful use of human resources and their development and regeneration.

In contrast to traditional HR management without a sustainable focus, it is not just a matter of providing labour on a situational basis or handling personnel tasks for the current workforce. There is a long-term perspective. Future conditions and the lasting consequences are given more weight in decisions. The (short-term) view of the here and now is expanded to include future (long-term) developments. Furthermore, the effects on the company and the environment - the interaction, side effects and feedback effects - are brought more into focus.

For example, the sustainable orientation takes into account that (unplanned) redundancies can also mean that skilled workers switch to the competition and that recruitment processes have to be restarted when staff requirements are renewed. The company's reputation as a reliable employer is diminished, which may result in health problems or demotivation among employees. In contrast, it can be planned in advance that the initially cost-intensive training will save on later search costs and prevent a shortage of skilled labour. The situation is similar with preventive occupational health management (OHM). Prevention initially incurs costs. However, thanks to lower absenteeism and a higher fitness level among employees, these costs are saved many times over later on. In the Meta-study by the Health and Work Initiative show positive effects of the OHM. The return on investment (RIO) of analysed prevention measures is as follows p. 68 of the report (ext. link) shown.

For human resources management with a long-term focus, as described above, we will use the term "sustainable human resources management" from here onwards in order to avoid confusion and facilitate subsequent differentiation.

Experience shows that it is rather difficult to understand what sustainability has to do with personnel. Therefore, a clear explanation follows:

Transferring the principle of sustainability to personnel

Sustainability is a principle of resource management. A system is sustainable if it only uses as many resources as are regenerated. If this balance between use and regeneration is equalised in the long term, the system can be kept functioning in the long term. It is sustainable. A typical example of sustainability is a forest, where only as much wood is removed as grows back. Sustainability can be applied to personnel as follows:

The individual has resources such as strength, motivation and health. All work consumes energy and therefore the person must be given time and the opportunity to regenerate. In practical terms, this could be breaks, holidays or avoiding overtime. If the person is still fit for work and motivated even years later, the person and their resources have been managed sustainably.

The company members are also a system that must be treated sustainably. If, for example, people leave the company due to age and the company does not take care of scholarships, further education and training accordingly, this would not be sustainable. The existing resource of the core workforce is used up, so to speak, without taking care of the next generation.

Another example: it would also be unsustainable if employees were regularly absent due to health problems or accidents at work. Society absorbs the consequences via health insurance or a disability pension. This would be unsustainable economic activity at the expense of society, so to speak, with a systematic depletion of health as a resource.

Typical tasks of sustainable human resources management

The tasks of sustainable human resources management include

• Maintaining and promoting the labour force and employability of employees. Typical measures here include health courses, further training and safety training.
• Safeguarding the mental and physical health of employees. For example, through accident prevention and the prevention of health problems caused by work, such as burnout or back injuries.
• Promote young talent and new talent, e.g. through training or scholarships.
• Offer development opportunities for existing employees.
• Long-term and sustainable personnel planning and organisation, as well as personnel controlling and communication.

The individual, the internal dynamics and the interaction with the outside world of the company (e.g. the labour market) are included in the considerations over as long a period as possible. 

Recognising long-term trends and thinking ahead in HR

For long-term HR planning, developments in society as a whole (so-called megatrends) must also be considered and prepared for. Specific requirements can be derived from this.

Mini-excursion: Megatrends

Some of these megatrends that every company has to deal with are

• Digitalisation, networking, the Internet of Things and artificial intelligence (AI)
• Demographic change, i.e. increasing average age of the population (silver society)
• the next generation of "digital natives"
• Change in traditional values, as a result of which, for example, traditional career paths or incentives (financial bonuses, company cars, etc.) are becoming less important, while other values are gaining in importance (self-development, meaningful work)
• Individualism, accompanied by new role models, diverse lifestyles and diversity in practice
• New management styles, New Work approaches, corporate democracy
• Sustainability, mindfulness and an awareness of health have established themselves as new values, but at the same time we are seeing increasing environmental crises, a fast pace of life and the rise of lifestyle diseases

A good overview with numerous in-depth articles on this topic can be found in the Zukunftsinstitut (ext. link).

Megatrends are characterised by the fact that they permeate almost all areas of society, the change has a long transition period of several decades and the effects are also long-lasting.

The challenge here is that these megatrends are both present and diffuse. In other words, there is no universal answer to the question of what this means for every person and every organisation. There are a wide variety of opportunities and risks. It is precisely these that need to be evaluated in terms of sustainable HR management and incorporated into HR planning.

Typical components of a sustainable human resources system

The typical elements of sustainable human resources management include

• Possibility of flexitime, short-time working, working time accounts, trust-based working hours, etc.
• Child and family-friendly working conditions
• (Regular) safety training for dealing with operational hazards and accidents
• Appropriate remuneration, including current and future pension requirements (health insurance, insurance, company-supported pension scheme, etc.)
• Company health management (BGM) as a preventive measure, e.g. in the form of fitness, relaxation and sports courses or healthy food and drink offers
• Training and further education programmes
• Complaints mechanisms and feedback systems
• Incentive systems (bonuses) and promotion criteria with a long-term perspective
• Avoidance of short-term job cuts
• Socially responsible handling of redundancies and outplacement measures (i.e. supporting employees when they leave the company or retire)

The aim of sustainable human resources management is to ensure the long-term success of a company and provide the best possible support. This includes skilled and motivated employees who can be deployed at the right time. From a preventative perspective, the aim is to ensure that regeneration, health and skills are maintained on the one hand and that future requirements, for example, are considered with foresight on the other. 

A sustainable human resources management shows that the company pursues responsible corporate governance (CSR) towards its employees. The company thus fulfils numerous aspects of social sustainability.

Sustainable human resources management is no guarantee for sustainability in the company

Sustainable human resources management is not synonymous with the sustainable development of the company. A company can also pursue non-sustainable goals and establish a sustainable HR system to achieve them. An example of this could be an energy company that establishes a sustainable HR system but concentrates its core business on burning fossil fuels - and pursues non-sustainable business practices with motivated and capable staff.

The 17 SDGs, which provide a framework for sustainable development, serve as a reference. Reference should also be made at this point to our article "What makes a company sustainable?" given.

So how can sustainability be taken into account so that HR processes also add value to the sustainable development of the company? Or to put it another way: How can sustainability be anchored in HR management?

Sustainability in personnel management

We would also like to clarify the terminology here first: We understand sustainability in HR, sustainability in HRM or sustainability in HR management as synonyms. For the sake of clarity, we will use the term "sustainability in HR management" in the following.

Previously, we talked about sustainable HR management. From here on, we will focus on sustainability in HR management. The difference to the sustainable human resources management described above is that sustainability in HR management also lays a foundation for sustainability within the company. It therefore goes beyond social responsibility towards employees. Sustainability in HR management is more than a mere "appendage" to a sustainability strategy; it is the foundation for a sustainable company. The HR departments of companies, HR managers and people with personnel responsibility have direct access to people. They have the knowledge and tools to promote sustainable thinking and behaviour among employees and managers. And it's the people that matter!

The key is that the people in the organisation are motivated and empowered. People will react negatively to change if they do not understand the purpose or necessity of the changes. The same applies if they fail at the new tasks, e.g. due to inadequate training. If, on the other hand, they have the necessary authority and the appropriate methodological or technical knowledge, company employees will be better able to cope with change. If they can help shape the further development of the company, their motivation will also increase. The willingness and obligation, the commitment of people to a project, to participate in change will also develop positively.

Expertise for sustainability in HR management

Let's assume that HR managers are not just reactive, but proactive in shaping the change towards sustainability. This raises the following questions: How can HR management prepare employees and managers with regard to sustainability? And how can it also make a proactive contribution to the sustainable development of the company?

There is a particular need to embed sustainability in HR management. It is about training special competences to enable the sustainable development of the company. These include: 

• Decision-making and evaluation skills for sustainability, i.e. the ability to develop, evaluate and decide on different options for sustainability.
• The Dealing with the sustainability dilemmai.e. being able to withstand or resolve them. Sustainability dilemmas are usually conflicts of objectives between economic, environmental, social and/or governance goals.
• Social skillsboth towards internal members and external stakeholders. This includes soft skills such as non-violent communication, conflict management, moderation and feedback skills, naming and dealing with uncertainties and fears.
• Sustainable Methodological expertise such as sustainable design thinking and creativity techniques for sustainable innovation management or presentation and documentation skills in order to convey sustainable best practice approaches as motivating positive examples.
• Expertisei.e. sustainability expertise or CSR expertise, for example on sustainability standards in purchasing, biodiversity in the supply chain, handling new processes or materials, proper disposal, energy efficiency or recycling systems (cradle-2-cradle).
• Technical competences for sustainability to use digitalisation and tools to achieve efficiency gains, for example. This also includes the use of software, such as tools for CSR management, sustainability controlling or productive video conferencing.

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Tasks for personnel management

As just shown, the sustainable development of a company gives rise to numerous new needs for employees and managers. Human resources management has the task of regularly identifying these needs and providing appropriate offers. The following applies, prepare people for the transition to sustainability and give them the skills and competence to act. This enables people to really implement sustainability in the company. Ideally, this happens in a corporate culture of sustainability. How the Corporate culture works in conjunction with the company memberswe show in a separate Blog post on.

Fundamentally, the instruments of personnel management must be used, such as further training programmes, restructuring of tasks and areas of competence or new hires. Please refer to the section Typical components of a sustainable human resources system reminds.

Create understanding, set incentives, awaken motivation

The task also includes that a a common understanding of sustainability within the company. It is important to recognise why sustainability is relevant for the company and where there are points of contact in one's own day-to-day work. The concept of sustainability, which is often difficult to grasp, should be broken down into practical terms. This understanding can be conveyed in workshops, training sessions or online courses, for example.

It is also necessary to rethink the common concept of success for incentive systems and promotions. Focussing solely on financial success is not sustainable. It is better to Alignment of the incentive system with ESG criteria or specially established sustainability indicators.

Another challenge is the Motivation for sustainability. Motivated people are more open to change, more able to withstand uncertainty and show more commitment. They are also less likely to be discouraged by setbacks and show greater stamina when faced with ongoing tasks. These are each important prerequisites for the successful implementation of sustainability. Motivational measures can be analytical, creative or based on playful interaction. We have already 15 examples of motivational measures in a separate Blog post collected together.

Understanding, incentive and motivation create trust, which in turn is important for a Openness to change in the company.

Objectives for personnel management

The aim is to record the areas of responsibility identified, translate them into specific needs and measures for the respective company and implement them successfully. This is followed by a performance review and a new needs assessment so that the competences for sustainability can be trained on a permanent basis.

HR management provides specific support in this regard,

• Reflect on common goals and sharpen the common understanding of sustainability, e.g. by means of a sustainable corporate vision.
• to create commitment through employee participation, e.g. jointly developed solutions, and to work on problems together.
• to create and sustain motivation.
• to enable transparency and communication between those involved. Experience has shown that an open exchange about success or difficulties brings a lot of security, especially when you realise together that you are fighting for a cause, but everyone can discuss their problems.
• carry out a structured error analysis and obtain feedback.
• to identify the need for personnel, further training or organisational development and to make offers or change personnel structures here

The long-term goal for sustainability in HR management is, on the one hand, to establish appropriate personnel structures. On the other hand, suitable people (sustainability talents) must be found and existing staff must be supported. In particular, the necessary competences for sustainable corporate development must be imparted.

Conclusion: Sustainable companies build on sustainability in HR management

While sustainable (in the sense of long-term, supportive) human resources management is already well known in companies, there has been little focus to date on how to go beyond this. However, this is precisely where an important lever lies. No other department or responsible person in the company has such direct influence, more tools and more in-depth knowledge to empower people for sustainable management. Even more: Consistently implemented CSR or sustainability takes place in HR management in particular. Without people and their motivation, skills and room for creative development, it will be difficult for companies to achieve their sustainable goals.

Sustainability in human resources management creates a basis and empowerment so that people can work for a sustainable company and gain and maintain motivation and skills. Sustainability in HR management means adapting to the special requirements of sustainable development. This includes structures and competences that need to be developed for a sustainable company.

This lays the foundations for successfully implementing sustainability within the company.

Further contributions:

• Culture shapes people - corporate culture for sustainable companies
• 15 examples of how to get employees excited about sustainability
• Interview with Vaude Managing Director Antje von Dewitz on sustainable corporate change
• Overview: Developing a sustainability strategy within the company
• ext. Website: Megatrends and related interviews, articles and dossiers identified by the Zukunftsinstitut
• Book contribution: Dr Georg-Suso Sutter "CSR without HR is PR - People make the difference" in Schneider and Schmidpeter "Responsible corporate management in theory and practice" (2015), from p. 647; both can be read online in a similar form in the environmental dialogue (2018)
• Book contribution to this: Prof. Uta Kirschten "Sustainable transformation processes in companies", published in 2021 in the publication series Sustainability management in Saxon companies

Image sources: pexels.comby A. Piacquadio