When we speak about a circular economy, we are referring to a whole series of concepts and practices related to the reduction of the use of resources, to the optimization of physical and technical capital but we rarely speak of what this implies in terms of human capital. The human resource represents a person’s skills, talents, qualifications, experiences. This capital is one of the pillars of the way companies operate. It is therefore unimaginable that the transition towards a circular economy would not be complete without a new approach to human resources management. All areas of human resource management need to consider and implement aspects of sustainability and circularity in order to contribute to greener business practices.
How high is the risk of not investing in skills development for transition into circularity?
A recent study by the World Economic Forum predicted that 65% of schoolchildren would be employed in jobs that do not yet exist in the future. For example, within the waste management industry, many manual jobs will become obsolete in the future with AI technology being rapidly implemented in sorting plants.
The circular labour market is comprised of all kinds of jobs in different sectors, ranging from manufacturing and creative industries to waste and resource management. Jobs in the circular economy, shortly ‘circular jobs’, are all jobs that contribute to one of the strategies of the DISRUPT framework (Circle Economy (2020)). Circle Economy defines different types of circular jobs as follows:
- Core circular jobs: These jobs ensure that raw material cycles are closed and thus form the core of the circular economy. They include jobs in renewable energy, repair, waste, and resource management sectors.
- Enabling circular jobs: These jobs enable the acceleration and upscaling of core circular activities and thus form the supporting shell of the circular economy. They include jobs in leasing, engineering and digital technology – albeit only those that actually contribute to circularity.
- Indirect circular jobs: These jobs provide services to the primary circular activities above and thus form the activities that indirectly uphold the circular economy. They include, for example, jobs in education, logistics and the public sector.
The ILO (2019) suggests that the extent to which job roles will need to be adapted and upskilled to work in greener ways increases with occupation skill-level. For example, practical workers may require minor behavioural adaptations that can largely be taught on the job. Whereas most newly emerging roles are generated within highly skilled occupations, through the demand for specialist skills that require higher levels of education or longer-term upskilling programmes.
A similar pattern of change may sometimes apply to the skills transition required in areas of the circular economy. As well as requiring a general upskilling because of task diversification and advances in technology, the circular economy also calls for a fundamental shift in mindsets at all levels of the workforce. Public and private leadership is required to encourage systemic thinking amongst workers across the full range of sectors that contribute to the circular economy.
Human Resource Management plays a crucial part in how well companies adapt to and apply greener, and thus also more circular, business practices. Various areas of human research management can have an influence on driving a firm’s sustainable practices and performance forward, such as for example the recruitment process, training, performance assessment and reward structures, organizational culture, teams and employee empowerment. All these HR areas need to be paid attention to when establishing green practices in a company in order to reach the best possible results of a green/circular transformation. Paying attention to the “human side” of a circular economy, next to aspects of production methods and technological solutions is an important aspect to implement circular practices in companies (Jabbour 2019).
Recruitment: Firms can consider future employees’ mindset and ambition in regards to driving sustainable practices within the company alongside other factors such as qualifications and prior work experience; include circular skills such as e.g. systems thinking, in the recruitment process and selection decisions.
Training: Firms can build awareness and provide training on sustainability topics and circular skills within their employee development programs for newly recruited staff as well as for existing employees.
Performance assessment and rewards: Firms can include sustainability measures in evaluating their employees and tie rewards such as promotions or raises to environmental and social performance measures.
Organizational culture: HR can work towards a more sustainable organizational culture by aiming campaigns and awareness-raising to these aspects and provide space fostering lived sustainability practices.
Employee Empowerment: Firms can strengthen employee empowerment by encouraging environmental behaviours and initiatives by their employees. Implementation of sustainable and/or circular practices can combine a top-down as well as an employee-driven bottom-up approach.
Teams: Firms can set up teams dedicated to innovation and implementation of specifically sustainability focussed tasks and processes to strengthen employee awareness and initiative on these topics.
Circle Economy (2020). Jobs & Skills in the Circular Economy: State of play and future pathways. Available at: https://www.circle-economy.com/resources/jobs-skills-in-the-circular-economystate-of-play-and-future-pathways.
Circle Economy (2021). Circular Human Resource Management: A briefing for HR Professionals on shaping the future of the circular economy. Available at: https://assets.website-files.com/5d26d80e8836af2d12ed1269/607d8856980f6e851593a235_20210419%20-%20CJI%20Brief%20HR%20-%20circular%20human%20resource%20management%20-%20297x210mm.pdf.
Circle Economy and Ehero (2016). Circular jobs: Understanding employment in the circular economy in the Netherlands. Available at: https:// new.circle-economy.com/jobsskills/resources.
International Labour Organization (2019). Skills for a greener future: A global view. Available at: https://www.ilo.org/wcmsp5/groups/public/—ed_emp/documents/publication/wcms_732214.pdf.
International Labour Organization. (2018). World employment and social outlook 2018: Greening with jobs. Retrieved from https://www.ilo.org/weso-greening/documents/WESO_Greening_EN_web2.pdf Jabbour, Charbel Jose Chiappetta, et al. «Who is in charge? A review and a research agenda on the ‘human side of the circular economy.» Journal of cleaner production 222 (2019): 793-801.