Leveraging Human Resources for Sustainable Growth
By: Andrew W. Savitz with Karl Weber
Adapted from Talent, Transformation, and the Triple Bottom Line, by Andrew W. Savitz with Karl Weber (Jossey-Bass, 2013)
An organization that wants to become a sustainable organization has to look at changing a wide range of business activities, most of which are measured by the triple bottom line (TBL) — the total impact of your company’s operations on the environment, society, and the economy.
The TBL is comprised of specific environmental, social, and economic indicators, such as the amount of various pollutants released, the ways in which employees are treated and the financial impacts of companies on local communities. The TBL includes the direct impact of your operations, the impacts of your products, and the impacts of your suppliers and their operations.
As daily headlines remind us, sustainability and the TBL are now of enormous importance in practically every industry, helping shape companies’ public reputations and their future business prospects.
Less widely recognized, however, is the fact that the human resources (HR) department often has an outsized impact on sustainability.
In fact, HR departments in most companies are expected to generate a number of specific “deliverables” that are significant in measuring an organization’s TBL including:
- Fair and reasonable pay and competitive benefits
- Workforce diversity
- A happy, healthy, and productive workforce
- Useful training and career development
- Human rights for employees and suppliers
- Positive community relations, and
- Good working conditions for employees and contractors
All of these traditional HR deliverables are elements of sustainability — and all are crucial to your business’s ongoing success.
Fortunately, many HR departments today are discovering and focusing on their vital role in sustainability. They’re becoming more environmentally and socially responsible, generating direct and measurable benefits for the entire organization and leading other departments toward greater sustainability.
Measuring Employee Engagement
One good way for your HR department to leverage sustainability is to measure how your company treats its own employees. One good, simple reason to start there is that any organization that claims to be managing according to sustainability principles should be taking good care of its own people. Sustainability begins at home.
In fact, surveys reveal that most customers in the United States base their impression of a company’s social and environmental responsibility largely on the way it treats its employees — not on the company’s corporate philanthropy, volunteerism, environmental projects, or any other acts that provide benefits to those outside the company.
If employees are well-treated, this creates a “halo effect” that sheds a positive light on many other aspects of the company.
Recognizing this, a number of companies have used employment policies — alongside a strong commitment to the TBL — to create a cadre of loyal, supportive workers who are deeply engaged in their work.
These employees tend to be highly motivated, which leads to higher productivity, greater efficiency, increased customer satisfaction, or simply more good will in the community.
Engaged employees feel that they are being valued and respected, and they naturally earn their employers a reputation for good corporate citizenship that helps grow and sustain their businesses.
If they also feel that they are part of a company that shares their commitment to making a positive difference in the world, their commitment can rise even higher.
How Starbucks Sustains Success
Consider the coffee chain Starbucks as an example. For Starbucks, employees hold the key to financial success. Starbucks CEO Howard Schultz describes the vital relationship between his company’s employees and its customers this way:
“When we are fully engaged, we connect with, laugh with, and uplift the lives of our customers — even if just for a few moments. Sure, it starts with the promise of a perfectly made beverage, but our work goes far beyond that. It’s really about human connection.”
How does Starbucks make the seemingly mundane job of a coffee server attractive and get baristas to make the “Starbucks Experience” one that customers will pay more for, certainly beyond what they might pay elsewhere for the same cup of coffee?
One important way is to provide excellent employee benefits: employees who work twenty or more hours a week receive health insurance coverage, including prescription drugs, dental care, and vision coverage — an unusually generous package.
Other benefits include a retirement savings plan, stock options, a discounted stock purchase plan, an adoption assistance plan, domestic partner benefits, referral programs and support resources for child care and elder care, and, of course, a discount on Starbucks merchandise — including a free pound of coffee each week.
This array of benefits, combined with flexible work hours and above-average pay for entry-level employees, makes Starbucks a significantly more attractive alternative than most of its obvious rivals, including other food chains, and pays rich rewards to the company as well.
Similar employee-centered strategies have been followed by other businesses, from the Wegmans grocery chain to the PricewaterhouseCoopers accounting firm, with impressive financial results.
But Starbucks goes a step further to deepen its connection with employees with a strategy we call values alignment.
Starbucks works hard to attract and hire people who share the company’s well-publicized social and environmental commitments (such as buying “ethically sourced” coffee). Many even consider these commitments part of the benefits of working at Starbucks.
So although Starbucks’ sustainability programs appeal to many customers, they are even more important in terms of motivating the employees who create the Starbucks Experience — the heart and soul of the company’s business model.
Employee Motivation through Sustainability
Many of today’s most successful businesses, from GE and PepsiCo to IBM and the Gap, as well as smaller companies, are creating such sustainability-based motivational programs, with tremendous benefits for the business.
What’s more, a commitment to sustainability, as evidenced by these kinds of initiatives, is proving to be a powerful attractor of today’s best talent.
Countless surveys — as well as anecdotal evidence provided by many HR professionals we interviewed — underscore the reality that working men and women of all ages today are hungry for opportunities to live out their personal values on the job, including environmental and social values.
As a result, companies that practice sustainability — starting with their HR policies — have a leg up in the war for talent that will largely determine the winners and losers in today’s global marketplace.
Factors such as these help explain why we believe that every HR professional needs to put sustainability at the top of his or her agenda for years to come.
Andrew Savitz is co-author of Talent, Transformation, and the Triple Bottom Line (Jossey-Bass, 2013). He is currently Principal, Sustainable Business Strategies and a creative advisor, author and speaker, with over 20 years of hands-on experience assisting corporations to become leaders in sustainability, environmental performance, measurement and reporting. Savitz speaks frequently on the topic of sustainability and corporate social responsibility and has been widely quoted in both the sustainability trade press, the environmental press, and the mass media. He serves on the Board of the Environment and Natural Resources Department at the John F. Kennedy School of Government at Harvard University. He founded, and currently chairs the Board of the Massachusetts League of Environmental Voters. Visit The Savitz Report website (launching early April, 2013). Reach Andrew Savitz by email.