Years ago, an average company measured “growth” using only one metric, and that metric usually focused on profits for shareholders. But this limited, short-term definition doesn’t work as well in today’s consumer driven marketplace. At this point, an increasing number of companies are taking a broader view of growth, and are factoring longevity and sustainability into this equation. There’s actually a term for this broader metric– it’s called the TBL, or Total Bottom Line. The TBL measures the impact of a company’s actions not just on its own immediate profits, but also on the larger economy, the environment, vendors and suppliers, employees, and society as a whole.
So what role do HR managers play in bolstering a company’s TBL? How can an HR department shift its goals and actions to focus on long term sustainability?
1. Working to build an engaged, committed workforce. This begins with fair pay, competitive benefits including health insurance, and regular increases that keep pace with company profits and reflect seniority and employee contributions. HR professionals should work together with accounting to make sure pay scales are accurate, fair, and flexible.
2. Building workforce diversity. Maintaining a diverse workforce isn’t just about fair hiring practices, and it doesn’t just provide returns for employees and society. A workforce composed of diverse backgrounds, genders, ages, and other factors is typically more productive, resilient and cohesive than a monoculture.
3. Focusing on humane and ethical practices among vendors and suppliers. HR plays an important role in screening providers to ensure that their practices and raw materials are obtained using sustainable methods. The company bears responsibility for all of its contracts and the actions of its providers, no matter how indirect these connections may be.
4. Strengthening community relationships. A company’s reputation and position within the local community can mean the difference between a strong and weak financial future. Companies that engage in community charitable events, clean ups, local projects, festivals, parks, and sports teams are returning only a fraction of what they extract. The use of every local resource, from roads to clean water to employee populations can and should be acknowledged in a company’s tangible contributions to the community.
Is your HR department fully focused on the company’s long term TBL? For more information about this metric of success, arrange a consultation with the NC staffing and business management experts at PSU.