hci hcm and sustainability 110620

7/31/2019 HCI HCM and Sustainability 110620

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Sustainability & Human Capital ManagementGlobal Trends & Implications For Business

Dr. Shane Hodgson, SAP Business Transformation ServicesProf. Christian Berg, SAP Business Transformation Services

June 20, 2011


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2011 SAP AG. All rights reserved. 2

Sustainability and Human Capital Management

Sustainable Development And what it means for Business

Drivers for Corporate Sustainability

SAPs Approach to Sustainability

Where Global Trends affect HCM

Implications for Sustainable HCM

Q & A


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Source: A New Era of Sustainability, UN Global Compact-Accenture CEO Study 2010


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Sustainable DevelopmentAnd what it means for business

Sustainable development is development that meets the needs of the presentwithout compromising the ability of future generations to meet their ownneeds. World Commission on Environment and Development (the Brundtland Commission), 1987

is a concept whereby companies integrate social and environmental concerns

in their business operations and in their interaction with their stakeholders. European Commission, Green Paper on Corporate Social Responsibility, 2006

Corporate Sustainability or Corporate Social Responsibility

Corporate Sustainability is a business approach that creates long-term shareholdervalue by embracing opportunities and managing risks deriving from economic,environmental and social developments.

Dow Jones Sustainability Indexes, 2010
http://images.google.com/imgres?imgurl=http://www.rootsofpeace.org/assets/UN_Logo_OW.gif&imgrefurl=http://www.rootsofpeace.org/harvest-of-hope-2009-ban-ki-mo.html&usg=__pr6UzcHToC67EnaP28JX-RQMDYM=&h=889&w=946&sz=120&hl=de&start=3&um=1&itbs=1&tbnid=CcO_GRcqUFjwqM:&tbnh=139&tbnw=148&prev=/images?q=UN+logo&um=1&hl=de&tbs=isch:1


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Implications of a sustainable development approach

Sustainable development therefore involves:

A broad view of social, environmental and economic outcomes;

A long-term perspective, concerned with the interests and rights of futuregenerations as well as of people today;

An inclusive approach to action, which recognises the need for all people tobe involved in the decisions that affect their lives.


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The Business Case for SustainabilityNew Cost and Risk Drivers; New Opportunities

Social

Price (Volatility) ofNatural Resources

Economic

Automate compliance Optimize resource productivity

Protect/enhance the brand. Moresustainable offerings and practices.

Cost & Risk

of Regulation

Competitive

Advantage

Environmental


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The Business Approach to Sustainability

PROFITABILITYIncrease short and long-term

by holistically managingeconomic, social and environmental

risks and opportunities.



Sustainability and Human Capital






Q & A



Why Corporate Sustainability?Drivers for change

Compliance

Pressure from stakeholders

Risk Management

Enhancing brand image

Increased employee motivation

Ethical considerations









Q & A



SAP as

Enabler

SAP as

Exemplar

Transform SAP into

a role model forsustainability

Lead the market forsustainability solutions

Credibility requires transparency

Strong governance and changemanagement model required

SAP has to manage economic,

social & environmental risks

and opportunities, too

Everybody needs to be involved

Biggest lever for SAP: Green IT is only

addressing 2% of overall greenhousegas emissions, what about the other

98%?

There is a business case and a market

for sustainability software solutions

Market driven development approach

Sustainability @ SAP

SAPs Approach to Sustainability:

A Dual Strategy



SAP Sustainability Map

ProductCompliance

Recycling& Reuse

ProductFootprint

Material & ProductSafety

SustainableDesign

Sourcing &Procurement

Traceability& Recall

GreenLogistics

Supply ChainDesign & Planning

Availability, Security, Accessibility & Privacy Green IT

MobilityResidential

EnergyPersonalFootprint

Smart GridParticipation

Production EnergyManagement

CarbonManagement

Facility EnergyManagement

Natural ResourceManagement

Benchmarking& Analytics

StrategyManagement

Financial Risk& Performance

Engagement &Corp. Citizenship

Materiality &Assured Reporting

Labor Compliance& Human Rights

Strategic WorkforceManagement

Travel ManagementDiversity

Industrial Health& Safety

EnvironmentalCompliance

Risk Assessment& Reduction

Process SafetyEmergency

Management

PRODUCT

SUPPLYCHAIN

IT

CONSUMERS

OPERATIONS

EXECUTIVEMANAGEMENT

ENVIRONMENT,HEALTH & SAFETY

HUMANRESOURCES

Sustainability ReportingEnergy & Resource

ManagementSustainableWorkforce

Operational RiskManagement

SustainableSupply Chain & Products









Q & A



Where Global Trends affect HCM (1)

Demographic change:Ageing of society and workforcein many countries

Scarcity of high-skilled andeducated talent

Increase of work /stress relatedillnesses




Shift in values towards a Postmaterialist society

Younger generation in many countries is post-materialist (according to R. Inglehart)

Given a certain, moderate level of wealthimmaterial values become more important.

Consequences:

Lohas: Lifestyle of health and sustainabilityMarket segment focused on health and fitness,the environment, personal development,sustainable living, and social justice

Meaningful work with a contribution to thebroader public good

Emphasis on Work-life balance

...are all getting more important



Work-life-balance

With an increasing number of women employed and gender equality families need to findnew ways to share responsibility for bringing up the children and balance work and life

Example: Marriott Hotels was finding it difficult to attract new recruits and to retain goodmanagers. The company had a strong culture of face time, i.e. Managers stayed at theirhotel and pretended to work even if they had completed. When the relationship with highturnover was recognized, senior management initiated a programme of flexible work which

effectively reduced the turnover rate*

Diversified family situations

With the growth in the number of patchwork families, women employed and gender equality,families need to find new ways to share responsibility for bringing up the children and tobalance work and life

Diversified Workforce

Firms need innovative ideas to sustain and to flourish and a diverse workforce has theproficiency to generate novel ideas for a companys success. Conversely, a homogeneous

workforce is comparatively less likely to come up with the creative solutions faced by anational and world market that is characterized by individuals from many races, nationalities

and religions http://www.starcitynews.com/the-importance-of-work-force-diversity/1602/


*Source: Dexter, Dunphy et al., Organizational change for corporate sustainability
http://www.starcitynews.com/the-importance-of-work-force-diversity/1602/http://www.starcitynews.com/the-importance-of-work-force-diversity/1602/http://www.starcitynews.com/the-importance-of-work-force-diversity/1602/http://www.starcitynews.com/the-importance-of-work-force-diversity/1602/http://www.starcitynews.com/the-importance-of-work-force-diversity/1602/http://www.starcitynews.com/the-importance-of-work-force-diversity/1602/http://www.starcitynews.com/the-importance-of-work-force-diversity/1602/http://www.starcitynews.com/the-importance-of-work-force-diversity/1602/http://www.starcitynews.com/the-importance-of-work-force-diversity/1602/http://www.starcitynews.com/the-importance-of-work-force-diversity/1602/http://www.starcitynews.com/the-importance-of-work-force-diversity/1602/http://www.starcitynews.com/the-importance-of-work-force-diversity/1602/



Development, Freedom, and Rising Happiness - A Global Perspective (19812007) . Inglehart, Foa, Peterson and Welzel

ant


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World Values Survey

From http://www.worldvaluessurvey.org/wvs/articles/folder_published/article_base_54


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How Applicable is this to South Africa?

These findings also have important implications for social scientists andpolicymakers, for they imply that human happiness is not fixed but can beinfluenced by belief systems and social policies

Development, Freedom, and Rising Happiness - A Global Perspective (19812007) .Inglehart, Foa, Peterson and Welzel


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Q & A


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This means both managing Human Capital in a sustainable way, and

supporting broader sustainability with HCM practices ... for example:

Sustainable Management of HCM

Recruitment and Talent Management

Competency development

Employee Lifecycle Management and Outplacement

Supporting Sustainability with HCM

Sustainable Compensation and Performance Management

Driving Employer Branding and Diversity

Promoting Collaboration and Partnering

Supporting Organisational Learning and Knowledge Management

What is a sustainable approach to HCM?


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Sustainability in Recruitment and Talent Management

MonsterTrak.com, a career website forstudents found that

92% would be inclined to work for acompany that is environmentally responsible.

80% wanted a job that directly improved the

environment

Sustainability has a strong power of givingpeople a meaningful mission, a way toaddress their latent concerns and helping

them integrate their different roles in society.Socially responsible companies tend to have

employees with higher engagement.

Companies also have a duty to consider thesustainability of their recruitment practices,and to nurture the external talent pool fromwhich they recruit


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Sustainability in Competency Development

Companies need to continually enhance

the skills of their workforce to respond toemerging and future demands ofcustomers, investors and of society as awhole

Teaching the concepts of sustainability andimparting related competencies in strategyformulation, stakeholder management andleadership is crucial to corporate successand to the future of society (University ofCambridge Programme for Industry)

Companies also need to consider the

competencies in the resource pool outsidethe organisation, and to work witheducational institutions and civil society tobuild the pipeline of skills that will feed theirfuture recruitment needs


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Sustainability in Employee Lifecycle Management

This approach allows companies to support and manage employees through every

phase of their service with the company, from recruitment through training,development, retention and eventual outplacement.

It also enables companies to find the best people, leverage their talent, align employeegoals with corporate goals, maximize the impact of training, and retain top performers.

Simply put, adopting a sustainable approach to managing the entire lifecycle of the

employee and all the associated information empowers companies to make the kind ofsmart human capital management decisions that bring tangible benefits to your company(reference material, mySAP HCM solution).

Companies adopting a sustainability approach to Employee Lifecycle Managementalso need to consider the impact of returning employees to the resource pool, and to

adopt outplacement programmes to make this a positive impact.


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Sustainable Compensation and Performance Management

This approach includes elements of

rational and sustainable approaches tocompensation of employees, both fromthe point of view of the company and itsshareholders as well as from the point ofview of society as a whole.

Companies also need to orient theirperformance management programmestowards a sustainable approach toworking, and to reward those practicesand behaviours that are in line with

sustainability goals


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Sustainability Driving Employer Branding

Employer Branding and the War for

Talent

Initiatives like greatplacetowork, top-job100, Ethics in Business address this

Corporate Sustainability is an idealapproach, since it transfers severalattractive values like meaning, a

contribution to the common good,fairness, openness etc. Employees areincreasingly choosing to work forcompanies that openly espouse thesevalues.


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Sustainability and Diversity Management

Diversity management is a strategy to

address the market, to cultivate an open andstimulating culture, but also a responsibility toinclude the underprivileged and minorities andgive them a chance to make a contribution

In todays workplace, having a diverse

population is incredibly important. The

benefits of a diverse workforce includeinnovation, increased engagement andeconomic growth. Organisations are oftenoperating in an international or multi-facetednational context, and to service customerswell, they need to attract and retain peoplefrom the full range of demographic

segments. Having a diverse workforcebrings a range of useful perspectives to thetable and there is a significant competitiveadvantage if organisations are able tooptimise these differences in their people. Susan Ferrier, a speaker at themarcus evans HR Summit

2011 on diversity and employee engagement


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Sustainability - Promoting Collaboration and Partnering

Increasingly, organisations need to consider

their ecosystem when making strategicdecisions. Walmart will be required tocontribute both to labour market stability inthe short term and to sustainabledevelopment of local suppliers in themedium to long term when it assumescontrol of Massmart

We do not live and operate in a vacuum andwe need to think about the other inhabitantsof our environment.

HCM needs to be able to support newerways of working with partners, competitorsand a variety of other role players, and tobuild the competencies for this into theworkforce.

.


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Sustainability - Supporting Organisational Learning andKnowledge Management

Reinforcing and embedding lessons learned

in sustainable development and operations,and promoting a culture of organisationallearning and knowledge sharing is theresponsibility of the HCM Department.

Helping people to collaborate while under

the pressure of high-speed business activityis a key support HCM can deliver.

Linking learning into the organisations

strategy and supporting it with properassessment and reward is crucial.


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First Steps - what HCM can do to support sustainability

Align Human Resource Systems

E.g. Job descriptionsChevron: Understanding environmental issues is a selectioncriterion for CEOs

Embed Sustainability in Training and Career planningWal Mart: provides sustainability training to its employees

and encourages them to adopt personal sustainability projects

Reviews and RewardsDow Chemical: Contest for energy-saving projects withhigh RoI: first year: 27 winners with RoI of 173%,after 10 years: RoI of 300%

Work-life-balance support systems to reduce turnover rate, increase employee motivation,

employer branding etc.

Support Corporate Reporting on Sustainability


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What HCM can do to support sustainability (2)

Measure the Benefits

Use Analytics to track and control thePerformance of Sustainability Initiatives, e.g. on

Turnover and cancellations

Absenteeism

Employee satisfaction

Support Sustainability Initiatives

E.g. on-boarding to sustainability culture

Volunteering programmes

Organisational Learning Management


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SAP Sustainability Performance ManagementThe integrated solution which supports King III reporting

Management processes and analytics tocommunicate and execute sustainabilitystrategy

Disclosures based on reliable information anddata

Data gathering with automatic and repeatablecollection from systems and people


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Added Value Key Business Information Provided frommultiple other IT Solutions contributing to King III Report

King III Report

supported by SuPM

Mgt frameworks

Risk Management

Strategy Management

Process Control

EPM and GRC Solutions

Operational information

SAP EHS Management

SAP Carbon Impact

Sustainability Solutions

Critical business data

Organizations

Materials

SAP Business Suite


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Thank You!

Contact information:

Prof. Dr. Christian Berg Dr. Shane Hodgson

Global Head Sustainability Business Transformation PrincipalBusiness Transformation Services EMEA Emerging MarketsM +49 171 55 897 86 M +27 7947 84082E [email protected] E [email protected]
mailto:[email protected]:[email protected]:[email protected]:[email protected]

hci hcm and sustainability 110620

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