How Green HRM enhances employee engagement and talent retention

By Dr. Malini A/P Sathappan and Mdm. Khin Than Myint

Green HRM

In recent years, sustainability has expanded beyond environmental activism and entered the corporate sphere. Businesses are beginning to recognise that sustainable practices not only support environmental goals but also positively impact employee engagement and talent retention.

Green Human Resource Management (Green HRM) plays a crucial role in this transformation by embedding eco-friendly policies into the company’s culture, making workplaces more appealing to today’s workforce.

Green HRM integrates environmental management into the traditional Human Resource Management framework. It encompasses practices such as green recruitment, training, performance management, and employee engagement. The primary goal is to align employees’ values with the company’s sustainability objectives, fostering a workplace culture that is both environmentally conscious and socially responsible.

There are several reasons why Green HRM is gaining attraction. Research shows that employees, especially Millennials and Gen Z, prefer working for organisations committed to sustainability. Studies indicate that 70 per cent of employees are more inclined to choose companies that reflect their eco-conscious values.

Moreover, sustainable practices have been found to enhance productivity. Research from Harvard Business School reveals that companies implementing green policies experience a 16 per cent increase in employee productivity, driven by higher job satisfaction and a stronger sense of purpose. Furthermore, organisations that embrace Green HRM see a significant decrease in employee turnover, as a more engaged and motivated workforce tends to align with the company’s mission.

Green HRM strategies are evolving, and companies are increasingly adopting them. One critical area is green recruitment and selection, where organisations prioritise candidates who demonstrate a commitment to sustainability. Recruitment processes are also becoming more eco-friendly, with virtual interviews and digital procedures reducing the environmental impact.

Green training and development have also gained prominence, as employees are educated on sustainable practices such as energy conservation, waste management, and resource optimisation. Google, for example, offers ‘green training’ programmes that equip employees to be more environmentally conscious at work.

Performance management has also embraced sustainability. Many companies now include sustainability-related goals in their performance appraisals, evaluating employees not only on their job performance but also on their contribution to the company’s environmental initiatives. Additionally, green rewards and incentives are becoming common. Some organisations, like Unilever, reward employees who develop innovative sustainability solutions, offering bonuses or public recognition to further motivate participation in green initiatives.

Social Exchange Theory (SET) provides a valuable framework for understanding how Green HRM enhances employee engagement and retention. SET suggests that relationships are built on reciprocal exchanges. When companies demonstrate a commitment to sustainability, employees feel a moral obligation to reciprocate by increasing their engagement, loyalty, and performance. The perception of the organisation as socially responsible fosters a sense of trust, which strengthens employee commitment and satisfaction.

IKEA serves as a prime example of how Green HRM can be effectively implemented. Their ‘People & Planet Positive’ initiative integrates sustainability into every facet of their HR practices. From using sustainable materials in products to encouraging employees to reduce waste and energy consumption at work, IKEA has embedded green goals into its culture. As a result, IKEA has one of the lowest employee turnover rates in the retail industry and consistently ranks high in employee satisfaction surveys.

The benefits of Green HRM extend beyond environmental outcomes and contribute significantly to employee engagement and retention. Employees often feel a sense of pride working for a company that is committed to sustainability, which enhances job satisfaction and motivation. When employees see their personal values reflected in their company’s environmental priorities, they tend to stay longer, reducing turnover rates.

Furthermore, companies that adopt Green HRM practices are more attractive to environmentally conscious job seekers, which strengthens their employer brand and helps them attract top talent. Green initiatives also foster collaboration and a sense of community within the organisation, increasing engagement levels across departments.

In conclusion, Green HRM is more than a trend; it is a strategic approach that addresses both environmental and business goals. By promoting eco-friendly workplaces, organisations create a culture that attracts, engages, and retains top talent. Through effective Green HRM practices, companies not only contribute to global sustainability efforts but also build a more committed and motivated workforce.

Dr. Malini A/P Sathappan is a lecturer in the Management and Marketing Department at Curtin Malaysia’s Faculty of Business, and she leads the faculty’s ‘Talent Management and Green HRM’ research cluster. She is an Associate Fellow of the Advance Higher Education Academy, UK (Advance HE).  Her research interests lie in Organisational Behaviour, Green HRM, Sustainability and Supply Chain Management, Leadership, and Teaching and Learning. She has participated in International conferences and published articles since 2012. She has been a lecturer since 2019, teaching various business units, and has conducted workshops on Research Methodology for undergraduate and postgraduate students. Dr. Malini can be contacted by email at malinisathappan@curtin.edu.my

Madam Khin Than Myint is a lecturer in the Accounting and  Finance Department at the Faculty of Business. She is a Fellow of the Advance Higher Education Academy, UK (Advance HE) and has more than 35 years of teaching experience in higher education. She has authored and co-authored a number of journal articles and published papers in various peer-reviewed journals and conference proceedings. She is also a member of the ‘Talent Management and Green HRM’ research cluster. Madam Khin can be contacted by email at k.t.myint@curtin.edu.my.