Sustainable Business Practices vs. Business Recovery: HR in the Middle

(first published in Hospitality Insights)

In the current business context, most hospitality organizations are finding themselves wanting to strike the right balance of “building back better” without jeopardizing a speedy recovery and keeping sustainable business practices at the heart of it all. It is important to note that this is taking place at a time when there is heightened interest, as well as public scrutiny, toward an organization’s “footprint” and purpose. For example, stakeholders, as well as shareholders – who have already become more attuned to Environmental, Social, and Governance (ESG) principles – expect a marked step forward as it relates to an organization’s social, environmental, and societal impact. It is fair to say then that organizational leadership teams, including Human Resources executives, have their hands full. They must please investors (with dividends, ROI, etc.) whilst pushing forward with initiatives that place sustainable business practices at the core of an organization’s DNA. Reason enough to take stock and assess:

• Where does HR set the priorities?
• What can it not afford to miss?

6 Operational priorities set the tone for better business recovery

The pressure is building and reverberates across the HR community. Aethos™ has held informal roundtable discussions throughout the pandemic. Topics honed-in on include, for example, leadership, crisis management, and employee engagement – yet, the opportunity was always taken to also “check in” on organizational pressure points. Although informal in nature, insights were revealing and mirroring intel from strategic business review meetings Aethos™ has held recently with hospitality clients. Organizations were and are appreciative of their internal HR efforts. High importance was given to the following top “operational” priorities:

• Mental Health: to provide help with issues brought to light by the pandemic, to combat fatigue, to address work-life-balance aspects, etc.
• Employer Branding: to attract new talent, to fight the flight of talent, to overcome perceived lack of upward mobility, etc.
• Workforce Management: to address changing lifestyle choices, especially as Gen Z is entering the job market with different ideals and priorities (e.g., remote working)
• System Efficiencies / Productivity: to overcome raising operating costs, to recuperate lost revenues, to do more with fewer (staffing) resources, etc.
• Inclusion and Equality: to improve equal opportunity rights and fight biases, introducing, for example, committees to monitor and review hiring processes and quotas, etc.
• Compensation & Benefits: to review and ensure fair pay, to align incentives with business priorities, to provide schemes around mental health and wellbeing, etc.

Many, however, also acknowledged that “building back better” means improving on what was there before, using the current context as a “re-set button”. The attention was drawn to sustainability. Working on better engraining and aligning it within the organizational fabric and DNA has been predicted by many as the “No.1” priority for the foreseeable future.

Sustainable Development Projects: Going back to the roots with more HR involvement

There is no doubt organizations and their HR leadership teams have already tackled sustainability from various angles. Whereas in the past it was a topic where often lip service was paid but little action taken, it has nowadays gained significantly in depth – most notably, as it relates to goal setting and programs built and centred around hard facts and data (such as energy saving, building management, waste reductions, etc.). However, all this progress can easily be nullified if an organization’s people strategy is not aligned with its (sustainability) objectives. It appears it is exactly here where organizations acknowledge more action is needed – not for lack of wanting but mostly because HR is continuously being pulled into different directions, having to “fire-fight” and deal with urgent matters in the here-and-now.

Aethos™ has already referenced and emphasized HR’s leading role in driving the sustainability agenda (e.g., Sustainability: A Multi-Layered Human Interest Story. The article referenced asserts that a successful sustainability campaign is based on awareness, knowledge, training, and skill. HR thus provides the link between hypothetical sustainability targets and actual outcomes, it fulfils a vital role by proving the framework for success by defining, managing, and controlling the way organizations operate, how and whom they recruit, how talent is being rewarded and incentivized – and what kind of behaviours and values are fostered. This underlines the importance of addressing ESG holistically and in an interdisciplinary fashion.

To address this, more HR touchpoints should be built into the system as it pertains to sustainability. Ensuring alignment but also building on the notion that strong HR involvement builds stronger commitment (from leadership and line-level staff) which leads to credibility, both internally and externally. Organizations might hereby find inspiration in the concept of the reinforcement loop – it helps to better identify and address knowledge gaps, assess and align performance, and better disseminate, and act on, information.

How HR teams must be at the heart of a sustainable culture

Hospitality organizations cannot afford to drop the ball on sustainability. Clearly, they have done well in handling the immediate urgencies that have come out of the crisis, while addressing some fundamental sustainability practices and programs. Yet, there are seemingly more resources wished for, and required, to better engrain and align sustainable thinking within the organization and to proactively build sustainable skills. This is not only a question for a company’s HR executives: the onus is on an organization’s leadership team. Specifically, the leadership team must ensure that HR is not bogged down by the tactical implications and roll-out of initiatives that help ‘keep the head above water’ during a crisis. On the other hand, HR should continue to push for the necessary resources, and commitment, to embed sustainability. Whilst the financial and economic implications of the recent past are very real, so are those of the failure to address sustainability.