Unilever Business Performance & HRM Strategy

Introduction

Human Resource Management (HRM) is the process of managing people within an organization to support the achievement of organizational objectives efficiently and effectively (Rustiawan et al., 2023). It is concerned with improving the performance, commitment, and growth of employees in relation to the goals of the organization (Agustian et al., 2023). Unilever is one of the largest multinational companies that are spread across more than 190 countries and is famous for its creativity in business and HRM (Hu, 2023).

This report aims to critically analyse Unilever’s current HRM strategy and its relevance to organisational goals. It assesses the impact of CSR and sustainability on business performance with the help of theoretical and practical evidence. In addition, the report examines the impact of the dynamic business environment on Unilever’s HRM practices and then provides employability skills learned from this analysis.

Key aspects of the current HRM strategy of Unilever

Unilever has more than 140,000 employees, and its HRM strategies are consistent with the company’s vision of “making sustainable living commonplace” (Iglesias et al., 2023). The company has developed a strong reputation for progressive HR management practices that are aligned with sustainability, diversity, and efficiency. Unilever’s HR policies focus on employee training, diversity, and health, so that it has a capable workforce to address the dynamic global business environment (Nkpurukwe et al. 2025).

One of the key pillars of Unilever’s HRM strategy is the focus on the training and development of its employees. Some of the strategies include online training, leadership development, and training by doing. For instance, Unilever’s “Future Fit” program offers its employees tools and courses to develop digital and sustainability literacy, which is consistent with the company’s corporate strategy of innovation and sustainable development (Rahayu, 2024).

Another important aspect of Unilever’s HR strategy is diversity and inclusion. The company has policies that ensure that it provides equal employment opportunities to the employees irrespective of their gender, ethnicity or disability (Unilever Global, 2025). Measures like equal parental leave for both male and female employees and providing support to employees who want to transition their gender show that it is an organization that embraces diversity in the workplace (Unilever Global, 2025). This is not just a social responsibility program but a way to create a diverse pool of ideas and problem-solving skills that can help to increase creativity and competitiveness.

Furthermore, Unilever has focused on the health and welfare of its employees as well as the adoption of flexible working patterns, thus supporting employees and ensuring that they are productive in the workplace (Jose, 2021). Flexible working has been implemented at the company to allow employees to meet family and work responsibilities. Unilever’s employment models for 2030 will focus on employee satisfaction and flexibility, which is in line with the company’s corporate objective of achieving operational excellence while creating a motivated workforce (Gauthier, 2023).

Unilever’s HRM strategy is aligned with the company’s strategic goals and mission, which makes human capital the key to the company’s vision and operational effectiveness (Nkpurukwe et al., 2025). For example, the company’s sustainability strategy is reflected in the HR practices through the “Future of Work” program (Nair et al., 2022). In this way, Unilever guarantees that its employees are capable of making meaningful contributions towards the achievement of the company’s sustainability objectives. In the same way, the focus on diversity and inclusion resonates with the corporate goal of innovation because a diverse workforce is more likely to be able to address the needs of a global customer base.

In addition, Unilever’s talent and performance management systems contribute to operational effectiveness by helping the organization to attract and maintain high performers while increasing their levels of motivation and performance (Chowdhury, 2022). This alignment is well illustrated in Unilever’s restructuring strategies that the company has embarked on to make it leaner and more efficient. For instance, the company recently stated that it would cut office-based positions in Europe and other locations as part of a worldwide reorganization (Business Standard, 2024). This is a strategic move aimed at cutting costs and increasing efficiency, thus showing how HR strategies can help improve corporate flexibility and performance.

Thus, it can be said that Unilever’s HRM strategy is a good example of how the concept of HRM can be implemented in practice and how human resource practices can be made consistent with the overall business goals. The consonance of HRM and corporate strategy helps the company to stay competitive, innovative and in line with the vision of a sustainable future.

Impact of Talent Management on Business Performance of Unilever

Talent management is a cornerstone of Unilever, which contributes to operational efficiency, innovation, and sustainable growth in the context of growing competition in the global market (Atmaja, 2024). By means of such activities as learning journeys, AI-based talent management, and flexible employment, Unilever ensures that its workforce is properly positioned to support its strategic goals. These strategies do not only improve the performance of the employees but also help Unilever to address new business issues.

One of the main pillars of Unilever’s talent management approach is the focus on learning and development. Unilever’s goal is to ensure that all its employees are reskilled or upskilled by 2025 due to the growing technological and business environment (Unilever, 2021). This approach helps to keep the employees relevant and armed with skills that will be useful in the future. For instance, the company has trained Agile coaches and Scrum Masters, who in turn have trained more than 2,200 employees in Agile approaches (Danoesastro and Zeegers, 2023). These have enhanced operational effectiveness, allowing teams to reduce complexity and concentrate on value-added activities.

Another innovative element of Unilever’s talent management is the use of artificial intelligence in improving workforce skills and performance. The company launched FLEX Experiences, an internal talent marketplace based on AI that helps employees find projects in other areas of the business (Devine, 2021). This platform enables the employees to get new experiences and skills without having to change their positions. Thus, FLEX helps the organization to allocate its talent more effectively by promoting cross-functional learning and cooperation. By 2021, the platform helped to redistribute more than 57 thousand hours to almost 200 high-priority projects, which proves the effectiveness of the concept of workforce flexibility and its results (Devine, 2021). AI in talent management is not only about the speed of innovation but also about making sure that projects are staffed properly and therefore delivering results faster and with a greater impact.

Another important aspect of Unilever’s talent management strategy is the concept of flexible employment models. Such programs as U-Work allow employees to participate in different projects and are guaranteed minimum wages and other benefits (Nair et al., 2022). This model offers the employees the freedom they need and a professional and versatile workforce for the company. U-Work has been successfully implemented in countries like UK, South Africa and Malaysia and the company has intentions to expand to other countries.

The effects of talent management in Unilever’s business performance are apparent. Ongoing training and development have helped the employees to manage digital change well, and integrate it into the organization to improve efficiency and reduce costs (Chowdhury, 2022). The use of an AI-driven talent marketplace has helped to minimize the time it takes to fill important projects, thus increasing the speed at which new products and innovations are brought to market (Cooper, 2024). New forms of employment have improved the level of involvement, decreased staff turnover and provided a reliable and skilled workforce. Altogether, these strategies build a strong and adaptable organizational culture that is in line with Unilever’s strategic vision of sustainable growth and market dominance.

Critical Evaluation of Employee Engagement Practices at Unilever

Unilever is a perfect example of how an organization can develop a holistic and creative approach to the management of employees’ engagement. Through well-being, feedback, and technology, the company guarantees that its employees are motivated and committed to the company’s objectives (Unilever, 2021). All of these practices are grounded in theoretical frameworks of employee engagement and backed up by practical experiences.

One of the foundations of Unilever’s strategic plan is the focus on employee health. The company has a comprehensive Employee Assistance Programme (EAP) that is available 24/7 and includes counseling, mindfulness sessions, life coaching, and financial wellness support (Baragiola and Mauri, 2021). This large-scale effort targets the psychological and emotional aspects of the employees, thus improving the overall health of the workforce. In 2023, Unilever said that 84% of office employees believed that the company cared for their welfare, which shows that such measures were fruitful. These practices are consistent with the JD-R model that states that when resources are provided to the employees, job stress is reduced and engagement is increased (Koroglu and Ozmen, 2022). In this way, Unilever minimizes the burnout probability and contributes to the creation of a healthy organizational climate by providing comprehensive well-being assistance.

Another key component of Unilever’s engagement strategy is feedback mechanisms. The company uses the UniVoice survey to gauge the employees’ attitude, and in 2022, about 96,000 employees responded to the survey (Unilever, 2022). The survey showed that the level of engagement was 81% in offices and 84% in factories, which put Unilever in the first quartile of the industry standards. Furthermore, Unilever encourages two-way communication between the subordinates and the top management through the ‘Your call’ meetings with the CEO and the Unilever Leadership Executive held every two weeks (Unilever, 2022). These platforms enable the employees to express their opinions and also make them feel appreciated, which is in line with the Social Exchange Theory. According to this theory, it is believed that when employees feel that their efforts are being appreciated, they will in turn, respond with increased levels of performance and loyalty (Thomas and Gupta, 2021).

Unilever has also used technology to improve employee engagement as a way of improving organizational performance. The introduction of ‘Una,’ an AI-powered chatbot developed in collaboration with Accenture, gives employees an assistant to help them find resources and solve issues quickly (Mathews, 2024). This tool makes communication easier and enables the employees to seek information on their own. Such advancements are in line with Self-Determination Theory that posits that autonomy, competence, and relatedness are the key to intrinsic motivation (Gagne et al., 2022). Thus, allowing the employees to handle tasks and responsibilities on their own, Unilever strengthens commitment and performance.

However, the recent restructuring activities in the company make it difficult to maintain high engagement levels. The company’s decision to cut 3,200 office positions in Europe by 2025 as a part of cost-saving measures has caused discontent among workers (Masud, 2024). In a company-wide call, several people complained about these decisions. This scenario is in line with the Psychological Contract Theory which posits that any violation of the unspoken understanding between employers and employees will result in reduced trust and commitment (Herrera and De Las Heras-Rosas, 2021). The current restructuring initiatives may weaken the high level of engagement that has been developed at Unilever, which is why it is crucial to provide clear communication and adequate assistance to the employees affected by the changes.

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Influence of Business Environment on Business Ethics, CSR, and Sustainability

Unilever is in a complex and constantly changing business environment that is influenced by regulations, consumers, and global sustainability issues.

The regulatory environment is a major impediment for Unilever since it operates in over 190 countries, which have different legal and environmental systems (Dang Khanh, 2024). In order to maintain compliance and encourage responsible practices, Unilever has developed extensive policies like Environmental Policy and Responsible Sourcing Policy. These policies help the company to ensure that it complies with stringent environmental and labor laws and ethical practices in the supply chain. For example, Unilever checks that its suppliers respect the code of ethical purchases and the company has a strategic direction to purchase 100% renewable electricity by the year 2030 (Wang, 2024). It also shows its readiness to follow the regulatory measures and also embrace sustainability.

The business environment of Unilever is also dependent on consumer expectations. The modern customer wants to see that the company is committed to sustainability and ethical operations (Koroglu and Ozmen, 2022). Catering to these expectations, Unilever has integrated sustainability into its operations through the Unilever Compass, which is a business strategy that has ambitious targets of dealing with issues such as climate change, social injustice and waste management (Dmitrievna, 2021). For instance, Unilever has its plan to achieve net-zero emissions across the value chain by 2039 and to reduce the company’s new plastic use by 50% by 2025 (Dmitrievna, 2021). None of these efforts are only about consumerism but also about enhancing brand association and Unilever’s position in a more sustainable global economy.

Global sustainability factors such as climate change, resource scarcity and inequality are also relevant to Unilever’s strategic map, and also well managed by the company through different programs and practices. For instance, Unilever uses Life Cycle Assessment (LCA) methodologies to assess the sustainability of its products from the purchase of the raw materials to the final disposal of the final product (Wang, 2024). This makes it possible for the company to make the right decisions that would help to minimize its impact on the environment. Also, the Unilever’s improvement of livelihoods entails supporting smallholder farmers in its value chain by offering them knowledge and tools on sustainable farming (de Arruda Pollice and Scarcelli, 2024).

The Unilever Leadership Executive (ULE) is responsible for sustainability and its integration into the company’s strategic plan and performance across the company (Smit, 2023). This broad governance structure focuses on the issues of transparency, human rights, and environmental management, which strengthens the company’s position in the field of ethical management.

However, the company has some issues in the alignment of sustainability goals and financial performance. Recent organizational changes such as the recent reorganization of its sustainability and external communications functions demonstrate the challenges of balancing financial performance and social impact (Mayer, 2021). While some of these pragmatic changes are seen as positive by some stakeholders, others are worried that they may lead to watering down of Unilever’s sustainability objectives.

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Impact of the module on Employability

The employability pyramid focuses on the hierarchy of skills starting from the basic level to the higher level of skills needed in the workplace (Shtaltovna, 2021). This module has been very useful in improving my marketability since it has developed important skills at its different stages. In group discussions and projects, I was able to enhance my communication and team work skills as it is in the real world. Case study assignments like the assessment of Unilever’s HR strategies helped develop the skills of applying the theoretical knowledge in practice, enhancing the critical thinking and problem solving skills. Management assignments fostered decision-making and leadership skills, which prepared me to tackle various organizational issues.

Moreover, the study of modern business activities improved my flexibility and knowledge of the current trends in the field. The emphasis on application and analysis in this module has been beneficial in building a strong professional development framework that will enable me to thrive in complex settings.

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Conclusion

Unilever’s HRM strategy exemplifies an innovative, holistic approach that aligns human resource practices with corporate goals, emphasizing sustainability, diversity, and employee development. By implementing measures like AI-based talent management, new working models, and a clear focus on CSR, Unilever achieves operational efficiency and a motivated workforce, as well as sustainable growth, stability, and global market presence.

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