Things That HRs Can Do to Contribute to A Circular Economy

It’s undeniable that the world’s economy has changed drastically in the past two decades of the 2000s. From the shocking consequences of America’s subprime mortgage loan crisis that started in 2007, to the recent financial devastation trailing in the wake of the COVID-19 pandemic – titanic global events have reshaped the collective view of resource management. 

More pertinent than ever, questions that discuss labour and human capital as resources have once again resurfaced. As experts discuss the importance of a circular economy, human resource (HR) professionals will also have to re-examine key roles and responsibilities in the current market climate, as well as their relationship to the circular economy. 

The Role of HR Professionals in the Transition

As a department, Human Resources or Human Capital, is the backbone of organisational culture. Often viewed as key opinion leaders and agenda-setters, HR professionals possess the influence to reliably shape the development and reinforcement of organisational values. If the goal for businesses across the world lies in more sustainable and circular principles, then their respective HR teams ought to step up and lead the charge.

Examples of how HR teams can promote circular and sustainable values come in many forms. The most concrete example of all is embodied in changing perceptions in which some jobs are viewed as well as endeavouring as an organisation to lower the redundancy rates for positions that can be repurposed. Embracing the sustainability principles of reduce and repurpose and applying them onto human capital, HR teams should eschew the traditional model of only filling specific positions for the interim till they are made redundant. Instead, they should empower the organisation’s employees to adapt and pick up new skill sets in tandem to any organisational shift during restructuring. This is key in promoting sustainable HR values.

Another example of how HR can aid the development of circular economies lies in open and transparent communication. As the needs of the economy and the business shift, HR departments must do their due diligence in keeping the employees updated on these changes. By working hand in hand with the employees to ensure that their skill sets are relevant and dynamic, HR teams that reinvest into human capital will continue to find value in circular economies.

Steps towards a Circular Human Resource Management Model (HRM)

Steps towards developing a Circular Economy via Human Resource Management (HRM) is dependent on three key touchpoints – Intake, Development, and Outflow. 

Intake, in this instance, refers to the recruitment and pre-recruitment stages of HRM. HR professionals ought to include the company’s circular goals and objectives in labour market communication. By making this a priority during the onboarding process, the HR professional sets the expectations for the incoming employee, holding them accountable to the organisation’s circular values. Furthermore, circular skillsets and competencies should also be included in job descriptions when scouting and considering new talent.

For the next touchpoint, Development, occurs in the daily aspects of an organisation’s business operations. HR departments and all the professionals involved should aim to reinforce organisational circular economy values across all departments while facilitating the development of circular economy competencies in existing employees. Using top-down and bottom-up approaches, HR teams can progressively implement circular changes.  

Finally, in the realm of Outflow, it is imperative that a portion of HRM is dedicated to the retainment of the skill sets and knowledge of older employees who are in the process of leaving the organisation. By pairing or linking them up with their younger colleagues, experienced employees can provide a system of mentoring for the younger ones and share with them valuable insights from their wealth of industry and job scope related knowledge. This partnership along with proper documentation and archival also guarantees a circular system in which information is passed on from person to person, and is not lost in the process.


The idea of adopting and implementing best practices from a circular economy in Human Resource Management, though potentially tough to establish, promises a sustainable path towards a brighter future. HR practitioners serve as pioneers towards that end – working to take proactive action and leveraging on new ways of working to establish human capital practices that is circular and sustainable. 


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