Dr. Shane Hodgson

Sustainable Approaches to HR

Management

HR Directors’ Conference, Johannesburg

June 25th 2013

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

Defining Sustainability

Reproduced f rom Chapter 5 in “Managing Human Resources for Environmental Sustainability” by Jackson, Ones and Dilchert (2012)

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).

Definitions of Sustainable HRM

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

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So – Currently Sustainable HR Management is …

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

What is a sustainable approach to HRM?

"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

HR Supporting Sustainability of the Organisation

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

HR’s Role in Supporting Sustainability as an Approach

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HR supporting Organisational Approaches

SHRM Foundation Executive Briefing “ HR’s Role in Corporate Social Responsibility and Sustainability” 2011

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

HR Building a Culture of 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

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Relevance of Strategic HRM in Corporate Sustainability

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)

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So – Sustainable HR Management is …

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

Setting the Scene – What’s Changed in the World Economy?

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.

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Setting the Scene – And So?

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

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…we need to use a different road

In South Africa, To Get to Where We Want to Go…

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What is the HR Function Really Good At?

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

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But We Need to Build a Sustainable Labour Ecosystem

“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.

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In the Future, No More T- Accounting Approach to Skills

“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

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Everyone is a Leader

"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

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Everyone Needs Skills Development

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 third-

grade 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-minority-

students-reading-mentors 20

Town and Gown - Co-operative Education

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.

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So What Else Do We Need to Do Differently?

http://www2.hawaii.edu/~zuern/demo/heidegger/guide5.html

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/

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Talent Acquisition – Hunting, Fishing or Farming?

“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

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Talent Pool vs. Talent Community

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.

“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

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So What’s Stopping Us?