Aon's Way Forward with Michael Burke

Q. Aon is at an interesting point in time with significant events – sale of its Benefits Administration and HR Business Process Outsourcing (BPO) platform to Blackstone and the acquisitions in the space of assessments with cut-e and CoCubes. How do you see the journey going forward?

A. This is a very exciting time for Aon and its consulting business. We are at a cusp of significant transformation.

Aon's sale of its Benefits Administration and HR Business Process Outsourcing (BPO) platform to private equity funds affiliated with Blackstone is a natural extension of the strategy the firm has pursued over the last decade. This transaction sharpens its focus on delivering advice and solutions, accelerates innovation on behalf of clients and improves return on invested capital.

As evidenced by the recent acquisitions of CoCubes, the India-based hiring assessments firm, cut-e, a global leader in online talent assessments (based in Hamburg, Germany) and Admix, a leading health and benefits brokerage in Brazil, the firm is committed to allocating capital to high value solutions that address emerging needs of clients and strengthens its global footprint.

These investments, coupled with an annual investment of over USD 350 million in proprietary data and analytics, are indicative of how Aon is both strengthening its core operations and evolving to better serve its clients.

I see us become more innovative, better equipped with big data and analytics and in tune with the emerging needs of our clients across the globe.

Q. Aon’s HR consulting business is a market leader in India. How do you see it being shaped with the recent events of divestiture and new acquisitions?

A. India continues to be a growth engine for Aon and an important talent source for us globally.

We have been pioneers in talent, rewards and performance consulting in India; with over two decades of deep relationships with India Inc. The recent transactions would be a shot in the arm for our India consulting capability – our acquisition of an Indian startup, CoCubes, will add to our global assessments solutions, structurally. Aon has built a direct line of governance and communication between HQ and India to expedite decision-making and to support India’s aggressive business and capability growth agenda.

You would see us with a sharper, wider yet deeper portfolio of solutions, tools and insights in India.

Q. What is your view on the role of HR in the background of radical shifts in industries, disruptions and evolving business models?

A. We believe the role of the Chief Human Resources Officer (CHRO) leadership is pivotal to organizational transformation in today’s times. But HR itself must undergo a transformation in order to become a true leader in driving organization-wide transformation.

Our experience has shown that for many businesses organic revenue growth is overwhelmingly driven by human capital, organizational effectiveness, and compensation and incentive redesign — v/s factors such as strategy, product, process and technology. 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 CHRO to earn their equal seat at the table — or else CHROs may find themselves next on the endangered species list.

Increasingly, CEOs are looking towards broad transformation programs to meet their organic revenue growth objectives. Our recent global study shows that 80% or more of the changes which drive growth most often stem from the areas of human capital, organizational effectiveness, and compensation and incentive redesign.

66% of surveyed executives say determining which growth levers to pursue is harder now than it was a decade ago.

Unsurprisingly, the CHRO is perhaps the best-positioned to play a leadership role in guiding an organic revenue growth transformation towards success. This, of course, is because the CHRO has the broadest vantage point on organizational effectiveness, the deepest skill set in compensation and incentive plan design, and is likely the senior leader best structurally positioned to work across the many organizational groups involved in a transformation effort.

Q4. How do you see CoCubes and cut-e adding to Aon’s assessments solution?

A. At a time when the global workforce is shrinking, workforce engagement is on the decline and turnover among younger workers is accelerating, big data is changing the way organizations identify, select, deploy, engage and measure the effectiveness of their talent.

With the addition of cut-e and CoCubes, Aon’s global talent, rewards & performance solution group boasts nearly 400 assessment and selection professionals, including award-winning industrial-organizational psychologists who are helping employers use science and data to select and develop employees. Together, we have more than 50 years of continuous operations in the assessment space. Combined, the organization's assess over 30 million job candidates using some of the most innovative and award-winning tests in the industry.

These acquisitions enable us to expand our assessment and selection capabilities into even more situations and geographies, providing even stronger insights and driving improved business performance and reduced volatility for our clients.

These acquisitions enhance Aon’s assessment and selection capabilities and strengthen its ability to help clients drive business performance through people.

Q. In your view, what is the next frontier for HR?

A. I believe science is the new frontier for HR. Let me explain with a fictional story –

You’ve just come off a long overseas flight and you’re tired and hungry. Arriving at your hotel, you’re greeted by Derrick, a personal concierge, who calls you by name and promptly checks you in and confirms your dinner reservation using his tablet. As he escorts you to your room, you realize you’ve left your toiletries and cuff links at home. Already stressed about the next day’s meeting, you wonder aloud what you’re going to do. 15 minutes later, there’s a knock at the door. It’s Derrick, holding a bag of toiletries and a selection of cuff links. Crisis averted, you settle in to recharge for the next day.

As globalization, disruption, increased risk and demographic shifts intensify business pressures, CEOs are increasingly looking to large-scale transformations to help achieve organic growth. Such initiatives typically involve the redesign of major functions, including sales, marketing, supply chain and IT. Granted, these are all critical for growth, but in our fictional scenario, the single most important element in the hotel’s ability to deliver a distinctive customer experience is none of these. It’s Derrick.

These acquisitions enhance Aon’s assessment and selection capabilities and strengthen its ability to help clients drive business performance through people.

More than 80% of the changes that drive organic growth stem from initiatives focused on human capital, organizational effectiveness, and compensation and incentive redesign. Why then is the CHRO often relegated to a supporting role when it comes to transformational projects? Largely it’s because HR frequently opts to go with its 'gut', rather than science, which is counter to the manner in which all other business decisions are made. A CFO wouldn’t dream of making a critical decision about financial capital without consulting P&L data. Yet, the vast majority of organizations fail to utilize data when making decisions around human capital. This is a huge missed opportunity when you consider businesses that prioritize human capital initiatives consistently outperform those that don’t.

To drive next generation strategy and performance, HR and business leaders need to reach beyond current processes and link behavior and environment to current market opportunity and risk. At the heart of this journey sits people analytics, which connects human capital to financial capital to give leaders a deeper understanding of how to engage, acquire and manage talent in order to unlock potential and drive business strategy. The result is a human capital transformation, powered by analytics.

As the CHRO seeks to play an ever-increasing role in leading organization-wide transformation, they must embrace a strategy that is grounded in data and powered by science.


For more information, please write to us at talentscapes@aonhewitt.com
Follow us on LinkedIn at Aon India & Twitter @Aon_India

Get in touch
Aon India Consulting