Circular economy refers to concepts and practices related to more responsible use of natural resources and optimization of physical and technical capital. Are the principles of a circular economy also applicable to HRM and with what added value? To answer this question, we met Emmanuel Mossay, Project Manager at EcoRes where he helps to develop the circular economy hub. He is also visiting professor in several Belgian academic institutions (UCLouvain, HEC Liège, Henallux, ICHEC, UNamur, ECAM, etc.) where he teaches new economic models.
What exactly is the circular economy?
Emmanuel Mossay: “There are 114 different definitions. This is both a problem - because, with so many variations, there are bound to be initiatives that turn out to be more or less regenerative - and a good thing - because it allows to include a maximum of actors. ADEME offers an interesting definition of the circular economy as being an economic system of exchange and production which, at all stages of the product life cycle (goods and services), aims to increase the efficiency of the use of resources and reduce the impact on the environment, while developing the well-being of individuals. When we talk about circular economy, one of the tools used is the Lansink scale, which prioritizes the solutions recommended for the treatment of waste resources, based on the idea that the best waste is that which does not exist and will never exist. The higher level of this scale prompts us to re-think the economic model, the corporation and the production and consumption methods with the aim of refusing to use certain resources. One of the principles of the circular economy consists in starting from a proven need and seeing how this need can be translated into a product or a service, by reflecting on all the possibilities of doing it in an alternative way to have the least impact on natural resources and to enhance human well-being. If the business does not do it itself, it risks being uberized by other actors who will do it in its place. To re-think its economic model is to imagine and eco-design the product life-cycle so that it can have several lives through different successive value-creation loops. This initial step will determine the circularity in successive steps. The next level of the Lansink scale aims to extend the life of resources and products through their reuse (for the same use), repair, repackaging and re-manufacturing (reuse for a different use). The lower steps of the scale focus on optimizing resources - including recycling and co-producing energy - and finally, incinerating and burying waste. This last step must be the last resort if the other options could not be exploited, because it is in fact an environmental debt that will one day have to be resolved. The idea is to develop a circular economy in the most virtuous sense up the Lansink scale, knowing that today most industrial investment and jobs are found at the bottom. So there is significant growth potential there. We consider that for the same resource pool, it is possible to create eight times more jobs by reusing them than by recycling them."
"In many businesses, we still commonly observe the logic according to which human beings are replaceable, or even disposable"
Why does human resource management seem to be forgotten in the principles of a circular economy?
Emmanuel Mossay: "This is a relatively new approach and the majority of players have focused on the transformation of operational, technical and logistical processes. Questions relating to the intangible part of the circular economy - including the management of human resources - remain widely overlooked. It must be said that the circular economy involves rethinking the relationships between sometimes very different players through alliances and partnerships, including the relationships with suppliers and customers. This logic is contrary to that which prevails in companies, which explains why the focus is less on internal aspects and more on the development of ecosystems."
Is it relevant to transpose certain principles of circular economy to HRM?
Emmanuel Mossay: “I think so. Today, in many businesses, we still commonly observe the logic according to which human beings are replaceable, or even disposable. We enter a business for a given use, for a given time. And if you are no longer suitable, because the business model changes, because you are no longer on top of the requirements or because you are deemed too expensive, they get rid of you. It may sound crude and exaggerated, but this mess is a reality. Some companies will try to help their workers adapt, sometimes by giving them the means - training or outplacement, for example - to be re-employed. However, this is far from the norm. Few companies are anticipating this. However, from a purely economical point of view, it seems obvious that, for a whole series of profiles, it is preferable humanly and economically to make them evolve rather than to make them redundant and to launch a process to recruit anew in a market where skills are scarce."
"We do not optimize the use of a resource by exhausting it, by exploiting it, but by managing it responsibly"
Exploring the adaptation of circular economy principles to HRM may suggest that we consider humans as a simple resource in the same way as others. That does not fail to make some cringe…
Emmanuel Mossay: "If we don't include humans and their intangible assets as resources for the company, where do we place them? We are talking about human resources management, which can be criticized - some prefer to speak of human capital, human heritage, human potential or even human wealth - but should we not also see the positive aspect of this reflection? Avoiding it does not seem to improve the condition of humans in business, if we look at the current burnout rates. A resource, including non-material, is preserved, it is saved, it is developed, it is valued. The concept of human capital has the merit of presenting humans as an intangible asset, and not as a cost factor. But it places the human in a financialized perspective. That said, the most crucial assets today for the competitiveness of companies are intangible: they are knowledge, skills, imagination, motivation ... more than the simple "physical" human labor force. To consider the human as a resource puts it back in the economic equation of profitability - currently, the dominant economic model is that of capitalism - and invites leaders to optimize its management. Is it wrong? We do not optimize the use of a resource by exhausting it, by exploiting it, but by managing it responsibly. More than criticizing the use of the qualifier ‘resource’, it seems to me more important to question the tendency to bring humans back to the status of disposable resource, what we call ‘Kleenex employees’. It is at this level in particular that applying the principles of circular economy could advantageously influence HRM. The idea is to be part of a progressive approach. Now, it goes without saying that this reflection concerns workers in our Western countries where there are standards and protective legislation and union safeguards. The risks associated with considering humans - and their mainly intellectual contributions - as an intangible resource is not problematic for us. Things are quite different in countries where basic labor standards as defined by the ILO and the OECD are not respected, and where people are exploited and over-exploited. Here, greater caution is required. »
Are disposable employees the only drift against which a more ‘circular’ HRM could fight?
Emmanuel Mossay: "Other benefits can be entailed. Doesn't it seem, just like our economic model depletes natural resources, that companies tend to exhaust their workers? Today, some are trying to address this by installing a ping pong table, a slide or a foosball, under the auspices of Chief Happiness Officers. But the approach is simplistic and does not acknowledge the real challenges. The business should make sure that everyone feels at least as well, and ideally better, but in any case not less well, when they come to work than when they leave at night. If not, there are some questions to ask. We know today that humans can really use their full potential and be efficient if they feel free, respected, listened to, independent in their work, etc. This is what must be translated into working methods and processes, for example by promoting collective intelligence, the principle of which is precisely to maximize the potential of everyone serving the company's project, while reducing the frictions linked to ego or frustrations ... or by allowing individuals to regenerate when necessary. And this is not idealism. There is an economic equation behind it: investing in the quality of work and in the well-being of workers brings additional performance. Today, we no longer motivate talented young people with extra-legal advantages or with internal promotion! If HR leaders are convinced of the merits of such an investment and of a more ‘circular’ management of human resources, they must be able to justify it by becoming ‘bilingual’ - old and new economy. Otherwise, they will not be able to convince those who do not see the importance of human resources in the economic equation."
"Investing in the circular economy also implies a personal transformation"
Eco-designing the work environment, rethinking HRM towards more 'circularity', re-qualifying staff to make the employment relationship more sustainable, 'recycling' skills in other environments: Can inspiring examples be found in circular economy eco-companies or with companies that have developed greater HR maturity, in all sectors?
Emmanuel Mossay: "It is very difficult to define a circular economy company as the qualifier could cover extremely different realities: waste collector, recycler, but also craftsman using local resources or cooperative pooling shared resources. The circular economy does not necessarily mean being ecological: you can make a circular economy with plastic, for example. We can decide to reduce the raw materials used to produce by simple cost motivation or temporarily in the face of the difficulty of obtaining supplies, which does not correspond to the primary meaning of the circular economy. Likewise, creating a coherent approach between circular economy activities and 'circular' management of human resources is desirable, but not systematic. Companies active in the recycling and recovery of waste are often organized in an extremely conventional manner. Other companies which do not take advantage of the circular economy can on the contrary develop a management of the human being betting from re-qualification, well-being or collective intelligence."
What avenues do you think could be explored to get HRM to take advantage of circular economy principles for more well-being at work?
Emmanuel Mossay: "One of the key challenges of the circular economy is to leave a system based on competition and the balance of power in order to be part of an ecosystem and value chain approach. The most complicated thing in such a fundamental change of perspective is the ego. Investing in the circular economy also implies a personal transformation: accepting to question yourself, to start at the beginning of the learning curve humbly, and to involve all workers, by accepting the equipotentiality of each member of a team. A business executive never has all the information. He/she cannot capture everything. We never tell him/her everything. He/she must therefore maintain this openness, create a climate of trust, allow everyone to come up with their own solutions, give the right to make mistakes… Another avenue consists in taking inspiration from the rules of nature, particularly well described by the scientist Janine Benyus: operating with natural energy, using only the energy you need, adapting form to function, recycling everything, operating through cooperation, building diversity networks, limiting excess from the inside, develop local expertise, transform limits into opportunities ... Nature is qualified as hyper-efficient: if we succeeded in applying these principles in the business, and in particular in the management of its human resources, we could go towards much more virtuous systems."
Christophe Lo Giudice
This article was first published in French in HR Square (January/February 2020).
Emmanuel Mossay participated in drafting the parliamentary report on the status and prospects for the circular economy in Wallonia (Belgium) and 55 proposals that have been made. This resolution was voted unanimously by the Walloon Parliament and integrated as a strategy to be implemented in the 2019-2024 Declaration of Regional Policy. Emmanuel Mossay is also co-author of ‘Shifting Economy’ which presents some twenty tools and methodologies to achieve such a transition within companies.
