Article: ‘80% of the changes which drive growth stem from human capital’

#HR Technology

‘80% of the changes which drive growth stem from human capital’

In an exclusive interview with People Matters, Michael Burke talks about the key challenges that the HR function needs to address before embarking on a digital disruption journey.
‘80% of the changes which drive growth stem from human capital’

Michael Burke is the CEO – Talent, Rewards and Performance, Aon Hewitt. In this interview, he talks about how HR is transforming due to digital disruption, leadership imperatives, and key labor trends in the global landscape

With the sale of Aon’s benefits administration and HR BPO platform to Blackstone and the acquisition of assessments with cut-e (in Germany) and CoCubes (in India) last year, Aon has made some significant moves. What is the future-focus for Aon now? 

This is an exciting time for Aon and its consulting business. The company is at the cusp of significant transformation. The sale of the benefits administration and HR BPO platform to private equity firms affiliated with Blackstone is an extension of a strategy that sharpens the focus of the business that is about delivering advice and solutions, accelerating innovation on behalf of clients, and improving return on invested capital.

Aon has shown commitment to allocating capital to high-value solutions address emerging needs of clients and strengthens the global footprint through the acquisitions of CoCubes, an India-based hiring assessment firm, cut-e, (based in Germany) a global leader in online hiring assessments, and Admix, a health and benefits brokerage firm in Brazil. 

Through these investments, coupled with an annual investment of over USB 350 million in proprietary data and analytics, the company is strengthening its core operations and evolving to understand its clients.

The CHRO directly controls or is positioned to greatly influence primary divers of organic revenue growth 

In view of technological disruption, dynamic shifts in business models and transformations, how do you think the role of HR has evolved and what does future look like for the function? 

The HR function used to be quite siloed, but with the transactional side of HR being automated, we have more people thinking strategically about talent management. From a technology standpoint, people throw around terms like big data and analytics, but its use is really constrained right now, however, going forward, it will be an enabler. The reality of the situation is that 90 percent of the clients we speak to can’t get the basic data they need to make everyday decisions. There is a walk before you run mentality that people struggle with. My worry is that there would be too much of focus on advanced and predictive analytics when the basic foundations are not in place here. The HR needs to look into building capabilities that can be leveraged.

From a leadership perspective, increasingly, CEOs are looking towards broad transformation programs to meet their organic revenue growth objectives. Our recent study shows that 80 percent or more of the changes that drive growth most often stem from areas of human capital, organizational effectiveness, and compensation and incentive redesign.  The CHRO directly controls or is positioned to greatly influence these primary drivers of organic revenue growth.  Given their unique position to be a meaningful leader in revenue and growth transformations, it is time for the CHROs to earn their equal seat at the table – or else CHROs may find themselves next on the endangered species list. 

My worry is that there would be too much of focus on advanced and predictive analytics when the basic foundations are not in place here. 

There are multiple researches on the impact of changing expectations of the workplace due to demographic shifts. What are your key takeaways on this?

We have done research looking at the generation gaps but generalizing would be wrong. With the younger generation, the expectations tend to be around agility, speed and flexibility; and with the older generation, it’s about a longer commitment towards the organization. However, the traditional model of working for long period of time in one organization might move towards being a specialist in a particular area and renting your skills to multiple organizations. This means the ‘office’ could mean working from home. Today, people need that flexibility inscribed and there are tools and technology that enable it too. So we believe it is moving that direction.

What is your observation about the movement of talent today when immigration is becoming a key concern in the west?

It is different across three key regions which are split between, Americas, Europe, and Africa-Asia. In Europe, there is a big concern about what something like ‘Brexit’ means for the free movement. People have really enjoyed and benefitted from moving freely within the regions in a successful context.

In Asia or particularly China, we are starting to see an increase in initiatives such as “One Belt-One Road”. In India, you have large conglomerates who are acquiring a business in other jurisdictions like Africa being one of the biggest markets. These business partnerships lend themselves to different opportunities. We’re also seeing more returnees as well. In Asia, we’re seeing more movements and an increase in the scope and willingness to move. In the US, it is the same as it always has been, it quite a large market and the majority of the movement is within the market.

Topics: HR Technology

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