Despite small changes in the paradigm of how we perceive the labour market driven by technology savvy youth, in general majority of people today still perceive labour markets as linear path systems. It implies that once the formal education is finished, we enter the labour markets with expectations for incremental professional career growth, of ever-increasing responsibilities, and ever-increasing higher pay. We also expect that these perceived opportunities are followed by retirement and exit from the labour market. This is an unsustainable perspective and an excellent example of the ‘take-do-discard’ linear model of managing physical resources. In this linear model people who no longer fit in, or can no longer keep up, are considered surplus to requirements, often dependent on social security support. This system is kept alive to some extent by makeshift provisions: a little reimagining and reapplying here and an additional training there. However, the dominant pattern remains that people are seen primarily as units of production, whose productivity should be used as efficiently as possible. In essence, this model supports the view that once the worker productivity no longer meets organisational needs, s/he should be removed from employment.
Within this path, the responsibility for managing employees rests on the organisation, economy and the society, to provide the aforementioned expected job security, professional and career growth. Enterprises and organisations, similar to national economies, however, cannot keep this promise anymore. Political, economic, and organisational systems are no longer operating within stable environments. Change is the new status quo. Organisations need to adapt fast, even lead change, in order to survive and prosper, and in this environment two key factors make a significant impact: how efficient is the organisation in managing its material resources and flow, and how fast its human resources can develop and apply new knowledge and competences. Both are the core principles of the holistic Circular Economy. However, while we have seen remarkable changes in developing a circular flow of material resources, a circular flow of people will not be easy to develop. Developing a circular economy with people who think exclusively in terms of linear professional and career paths is not going to work either.
Therefore, it is important to expand the principles of circular economy and develop an awareness of how the same applies to each of us as active participants at the labour markets and regardless of the form of our engagement – employment, contract, freelancers etc. A Circular model for human resources developed by the project Circular HRM, financed by the Erasmus plus programme adapts and describes in detail the application of all seven principles of the Circular Economy to human resources– Figure 1. The model changes the paradigm of the linear model on managing the human resources and when applied, leads to increased performance, life-long learning and development of new skills, improved well-being, and a shift in how we approach career development.
The main change affects the psychological contract. A psychological contract is a contract which governs the unwritten expectations of the employee and the employer from the employment relationship. It is the base of all assumptions on which the linear model of management rests. It no longer works. The perceived insecurity related to the employment contract nowadays downplays the effort and motivation of employees, while organisations faced with rapid changes in the external context in which they operate, seem unable to provide a long-term commitment. The introduction of the circular principles for human resources revitalizes the promise of the psychological contract by assigning an active role to employee in the process, by recognising that organisations are artificial forms which serve people, not forms to be served by the people, enabling the movement from company-centred to people-centred management approach. This is achieved through the introduction of an objective and transparent performance management system, tailor-made mentoring, coaching and training opportunities which enables the re-application, reintegration and internal re-orientation of employees, their skills and knowledge in organisations.
Circularity strengths the job satisfaction and revitalizes the psychological contract by providing efficient professional and career development; however, the same is not always linear. Circularity of human resources is based on the principle of adequate use of resources and deployment of the same to tasks and activities where the flow can be managed most efficiently without dissipation of effort, loss of skills and knowledge – human waste. Thus, circularity does not provide a solution for advancement, promotion, and growth in a hierarchical way, rather a promise of efficient work contribution through the life time of the individual. This is achieved through the principles of re-application, reintegration, internal re-orientation and optimization ecology which emphasise our active role in the development of our career and professional mastery. It implies that each of us during our working life will undertake roles of Mentee or the Mentor, be the Coach or the Coachee, and most probably go through these roles several times through the working life, but in smaller time loops, compared to only one long linear career advancement system which no longer exists.
At the end, a significant benefit from the application of circularity to human resources comes from the inclusion of new technology at the workplace and its use in creating a more efficient base for work-life balance – the principle of eco-conception. In particular, the design of the workplace no longer implies design of the actual physical workplace. It also covers digital and hybrid spaces with work procedures that enable us to work from home and balance our work-life more efficiently. The same does not only provide personal benefits, it also strengthens the circular values in the society as it defines a new, more sustainable way of working. In this regard it is important to note that while it is abundantly clear that circularity becomes the future of how we manage all resources including human; the sooner all parties involved embrace the paradigm shift in defining our place in the eco-system of resources, the better it will be for everyone involved, including people, organisations, and society as a whole.
Circular HRM Consortium. (2019). Circular HRM: Aligning Circular Economy With Human Resources Management. http://circular-hrm.eu/index.php
Circular HRM Consortium. (2020). Model for Circular Human Resource Management.
About the Author
Andrijana Bogdanovska Gj
Andrijana is an expert in the area of Knowledge Management, Innovations, and Circular Economy, with substantial knowledge and experience in capacity development of people and organisations through application of e-learning platforms and deployment of learning management systems.
Passionate on the topic of new technologies and how they influence the way we work, learn, and live, Andrijana has implemented numerous projects in the thematic area of human resource development in the past decade, where she established herself as a researcher and a capable lecturer in North Macedonia and the EU.