Attracting, Developing, and Retaining Talent: HR’s Role In Humanizing The Circular Economy

5 strategies to build high-performance teams

The circular economy represents a transformative shift from the traditional linear model of take-make-waste to a regenerative approach. A new, circular paradigm, where resources are kept in use for as long as possible; products and materials are designed to be reused, repaired, and recycled; and natural systems are restored. This paradigm shift aims to decouple economic growth from environmental degradation, reduce greenhouse gas emissions, create new jobs, and enhance social well-being and equity.

For companies and their leaders, transitioning to circular business and operating models is not an easy task. First, it requires strategic thinking and embeddedness. Health technology pioneer Philips exemplifies this with its comprehensive strategy aimed at generating value within the circular economy. 

For instance, Philips has set ambitious goals to increase circular revenues to 25% by 2025. Second, it requires a radical transformation in production, consumption, and disposal practices. Third, businesses need to move the leadership mindset of the organization through a multifaceted change in thinking and behavior. 

Here, human resources (HR) can play a pivotal role in enabling and supporting circular and sustainable businesses by aligning the workforce with the vision, values, and goals of these new business models.

The Neglected Human Element

Often, discussions about the circular economy focus on material resources, overlooking the essential human element. HR is traditionally not in the spotlight when it comes to the circular economy, yet their importance in enabling the transformation cannot be overstated. Leaders and employees are key drivers in the transition to a circular economy. Without employees who drive the circular transformation with passion, nothing will happen. Their skills, creativity, and commitment are crucial to overcoming challenges and realizing the potential of circular models.

HR's responsibility is to attract, develop, and retain talent that can drive the success of any organization. Thus, HR has the opportunity and responsibility to align the workforce with the vision, values, and goals of circular and regenerative business models. This involves creating a culture of innovation, collaboration, and learning that fosters creativity, agility, and resilience, and ensuring that employees have the necessary skills, knowledge, and competencies to implement and improve circular practices and solutions.

The Role of HR in Driving Circularity

Recognizing the multifaceted role of HR is essential in driving circularity within businesses. Here are five effective strategies to build high-performance teams to succeed in introducing circular business models.

1. Team Composition and Talent Capacity

Build diverse and balanced teams that cover various domains, functions, and regions of the organization, and bring different perspectives, backgrounds, and experiences. Ensure team members have both the technical and interpersonal skills to work effectively with each other and external partners. Provide training, coaching, and mentoring to enhance their skills in circularity and sustainability, as well as in communication, teamwork, and conflict resolution. Ensure that team members can spend real capacity on the circular program and it is not a sideshow.

2. Talent Acquisition

Implementing the circular strategy may require new talent from the outside, due to capacity or skill gaps in the current workforce (e.g. lifecycle assessments). HR should seek candidates who not only have the relevant technical skills but also possess a circular mindset and values aligned with the organization's vision and goals. 

This means screening for skills, such as systems thinking, circular design, innovation, collaboration, adaptability, and leadership. Assess candidates' motivation and passion for circularity and sustainability using behavioral interviews, case studies, simulations, and personality tests. 

3. Reskill and Upskill

To effectively embed circularity and sustainability within an organization, it's crucial to focus on both new hires and existing employees, including senior leaders. Reskilling and upskilling their knowledge and capabilities is essential to align their mindsets and behaviors with the company's circular vision and goals. 

Developing engaging and relevant learning programs tailored to different organizational levels, along with providing feedback and recognition for learning outcomes, is vital. For example, Siemens has implemented a comprehensive upskilling initiative for their global top leaders. This holistic approach demonstrates their commitment to embedding circularity into the company culture. Such initiatives ensure that leaders are equipped with the necessary skills and tools to drive the circular transformation and inspire their teams and partners to adopt circular practices.

4. Internal Community Building

Foster a sense of community and belonging amongst employees and leaders involved or interested in circularity and sustainability. Create and facilitate platforms for networking, sharing, learning, and collaborating on circular solutions and initiatives. Organize events, activities, and campaigns that promote and celebrate circularity and sustainability, and support employee-led groups and projects contributing to the circular vision. 

5. Performance Measurement and Incentives

Develop metrics to measure the performance of circular initiatives and incorporate these into performance appraisals across hierarchical levels. Recognize, celebrate and reward employees who contribute significantly to circular practices and innovation. This can include bonuses, promotions, and other incentives aligned with the organization’s circular economy goals. 

For instance, Philips has integrated circular economy targets into its executive remuneration framework. The company includes metrics related to sustainability and circularity, such as the percentage of revenue generated from circular products and services, within its performance evaluation for senior executives. This alignment ensures that the leadership is directly incentivized to drive circular initiatives.

Building a High-Performance Circular Team and Moving the Leadership Mindset

By focusing on the human element, HR can build and empower a high-performance team for circular and regenerative business models. This involves not only technical and professional skills but also fostering an empowering and supportive leadership mindset. 

For a high-performance team to thrive, a shared vision, trust, respect, and mutual support are paramount. These elements create a foundation that fosters the collaboration, innovation, and resilience needed to succeed in the dynamic landscape of circular and regenerative business models.

Leadership is critical in driving the circular economy. Leaders need to embody and advocate for circular principles, setting an example for their teams and ensuring that sustainability is integrated into the core of business strategies and operations. Many practical barriers make circular transitions difficult – for example the short-term business pressure to deliver quarterly results or organizational set-up changes that challenge the legacy operating model. 

Senior leadership (and shareholder) backing is essential as a strong backbone. HR can support leaders by providing them with the necessary training and tools to champion circularity, as well as by recognizing and rewarding leadership efforts that promote sustainability.

Conclusion

As HR professionals, you have a crucial role in driving the transition to a circular economy. By focusing on attracting, developing, and retaining the right talent and fostering a culture of innovation and collaboration, you can help your organization achieve its green goals whilst also creating a more sustainable and equitable future. 

The human element is often neglected in discussions about the circular economy, but it is essential for any meaningful and lasting change. Embrace this opportunity to lead the way in building a high-performance team that is passionate about and committed to circularity and sustainability.

Julia Binder, Professor of Sustainable Innovation and Business Transformation at the IMD Business School, and Dr. Manuel Braun, Director at Systemiq, are co-authors of The Circular Business Revolution.