Understanding the impact of circular transitions on company performance: Examining the roles of Change Management and Talent Acquisition in facilitating this relationship

Abstract

Circular Economy (CE) is founded on principles such as reducing, reusing, and remanufacturing. The appeal of CE lies in its potential to both drive sustainability and economic growth, which is emphasized in previous research. The aim of this study is to further research the relationship between CE and organizational performance, by looking at whether a transition to CE makes the company a more attractive employer and if the effect of CE on performance can be explained by talent acquisition. Finally, the role of change management in strengthening the relationship between CE and performance was examined.

Using a mixed-method approach, this study integrated quantitative data from a closed survey and qualitative data from an open-ended survey. The relationships in the quantitative data was explored using multiple regression models and a mediation analysis. The quantitative results overall showed a positive impact of both CE and remanufacturing on performance metrics and the ability to attract talent. However, it was slightly less significant for remanufacturing. The mediation analysis revealed that talent acquisition played an important role in driving performance during a transition to CE. Additionally, the effect of change management was proven to be minimal. The qualitative data supported most of these findings and gave more in-depth insights into the observed trends. However, for change management it provided contradicting insight, claiming that it played an important role in driving performance in a company.