Navigating Unprecedented Volatility: What's Ahead for HR in 2018?
An Interview with Michael Burke, CEO
Aon's Talent, Rewards and Performance Practice
Pressure to drive growth. Rapid technology changes. Extraordinary risks. These forces are converging to create an era of unprecedented volatility, making it more and more difficult for businesses to see opportunities. Yet, opportunities abound . . . for those who take the right action.
As the business environment evolves, businesses can't afford to ignore or undervalue their people as a key growth driver. The right people strategy can not only mitigate the uncertainties and pervasive risk clients are facing, but also inspire a culture that discovers and capitalizes on opportunity.
We sat down with Michael Burke, CEO of Aon's Talent, Rewards and Performance Practice, to get his insights on how, in 2018, businesses will leverage their people to drive business results.
What changes do you see on the horizon for 2018?
MB: I believe that in 2018 we will see businesses use data more systematically to make people decisions with confidence. It's not uncommon for these decisions to be made based upon gut feel, intuition and experience. As leaders, we are conditioned to think about strategy, business process and competition -- less about human behaviors. However, in our experience, 80 percent or more of the changes that drive outcomes stem from people. Are we selecting the right people for the right jobs? Are our compensation and rewards programs aligned to drive the required business outcomes? Are we organized efficiently and effectively?
We're seeing organizations start to recognize just how critical their people are to their success. In fact, in Aon's Global Risk Management Survey 2017, senior leaders said the failure to attract and retain top talent was one of the top risks they face, and five out of the top 10 risks were people related. In our point of view, the only way to address this risk is by using the data to make better people decisions.
Business results back this up. Our data shows that "Best Employers" enjoy 4 points of incremental operating profit compared to their peers.
Where do businesses get the data to make these decisions?
MB: The data has existed for a while, but it has been disparate and spread across the business, which makes it difficult to pull together and use. There are rich external data sources that allow leaders to benchmark against peers to ensure they are competitive. Recent improvements in technology and data science allow that data to be aggregated and analyzed. However, the biggest challenge is getting the insights into the right hands of the people who can take action. This is where working with an experienced consultant can make the difference between simply having the data versus using and acting on the data to drive business outcomes.
How do businesses get the insights to the right people?
MB: We are seeing a lot of tools mature that make this easier. Technologies such as natural language processing and machine learning will make analyzing and understanding vast amounts of data accessible for business leaders versus tools in the past that were more applicable to technical users. Additionally, data visualization technologies help tell the story that is locked inside the data, making it easier for business leaders to understand. All of this positions 2018 to be a tipping point for using data to make better people decisions.
What is the role of the CHRO in driving these changes?
MB: The CHRO has a critical role -- arguably the most critical role -- in driving change throughout the organization. They have the deepest knowledge on how to pull people levers to drive outcomes, including organizational effectiveness and compensation and incentive plan design. In addition, the CHRO works across divisions within a company, giving them broad visibility to what needs to change. They drive the change management programs that make new initiatives "stick." Businesses will not be successful navigating this volatile environment unless the CHRO has a seat at the table.
How do you recommend that your clients take advantage of these opportunities?
MB: We have a proven approach for helping clients get the most from their people, building trust and proving value at every step of the process. First, we work with clients to understand and develop hypotheses on what will drive the best results. Next, we test these hypotheses, using data, to ensure their validity and benchmark them against competition. We then work closely with our clients to build a six- to eight-week human capital plan. We work closely with our clients to help them build their own capabilities, imbed them into the business and become self-sufficient.
Do you have the right people to thrive in a volatile world? Find out at aon.com/chro.