What keeps Asia CEOs awake at night
AT A time when leaders are challenged to drive better business performance through their people, CEOs continue to be plagued by a critical skills shortage and heightened cost pressures.
Externally, volatility continues to be the "new normal" for most organisations - in fact, a recent study shows that 70 per cent of Fortune 1000 companies have disappeared in the last 70 years.
Employee expectations are also evolving, while disruption and advancements in technology are changing the configuration of work faster than ever.
How can today's CEOs in Asia drive business success by harnessing the potential of their people?
In the Aon Best Employers 2016 survey, we spoke to CEOs of almost 600 organisations across Asia about their strategic goals and the business challenges that impact their organisations' ability to succeed.
We discovered what the CEOs of these Best Employers are doing differently from their competitors to achieve 20 per cent higher engagement than the market average, and drive 10 per cent greater revenue and 26 per cent higher profit than market average.
Three key themes emerged:
Create a competitive advantage through people
CEOs in Asia named three challenges that impact their organisations' ability to succeed - market factors (52 per cent), people issues (47 per cent), and product/service innovation (35 per cent).
Market factors such as global competitive trends from non-traditional sources and evolving customer expectations mean organisations have to rapidly innovate their products and services in order to meet ever-changing needs and demands - and they can only achieve this with an agile workforce.
These challenges of speed, innovation, and agility are also the critical differentiators for creating a sustainable competitive advantage. At the centre of each differentiator are people who think and operate differently.
Aon Best Employer CEOs now see making the right investments and decisions about people as the enabler of their competitive edge.
They work hard to build organisations that thrive on product and service innovation, while creating work environments that are more likely to attract and retain the best talent.
Their organisations also fill 28 per cent more openings internally than the market average, which helps them achieve better business performance through their people.
However, with CEOs citing critical skills shortage (63 per cent) and poor availability of talent in the external market (60 per cent) as their top people risks, the road to building agile organisations is an arduous one - even for Best Employers.
Deliver a differentiated work experience
As salaries continue to rise year on year, critical skills shortage and low availability of external talent put power in the hands of employees and job seekers.
At the same time, an inadequate leadership pipeline means organisations are forced to spend more to attract senior leaders to their team.
However, money is no longer the easy answer to retaining great talent. Furthermore, increasing salaries and rewards is not sustainable.
It creates a huge risk to the bottom line and an adverse impact on profitability in the medium to long-term.
This is why Aon Best Employers across Asia are increasingly focusing on building a strong employer brand and leveraging digital platforms to create a differentiated work experience.
In 2016, CEOs said that the most important employer value proposition was teamwork and empowerment (59 per cent) - up from the third spot just last year - where employees prefer to be enabled, rather than instructed, in performing their roles.
This is followed closely by product and service excellence (52 per cent), where employees across generations express a desire to be proud of what they're creating and how they're contributing to the organisation and changing the world - not just from a professional perspective but a personal one.
Learning and career (51 per cent) rounds up the top three employer brand themes, where employees are seeking organisations that offer them opportunities to learn new skills and grow their careers.
Yet, while 65 per cent of Best Employers say that they have a clearly articulated employer brand, only 11 per cent of their CEOs and HR leaders are aligned on that definition.
While this suggests more work is required to align leaders on why their organisation provides a differentiated work experience, the good news is that CEOs are applying the same approach to their employer brand as they do to their products and services.
They focus on clearly and consistently creating a differentiated employee experience in order to attract the best talent and enable them to perform.
Correspondingly, CEOs are looking to invest in more digital platforms that align with the experiences that employees have outside of work so as to provide real time, end-to-end, and anywhere access to information and services.
Digital platforms also enable organisations to collect data more frequently, and in a more targeted way, in order to gather better insights and make better decisions about their people and for their people.
Build an agile organisation through analytics
Data empowers organisations to make informed decisions on how to best achieve their business and people goals.
In addition, always listening to employees through constant conversations and frequent pulse surveys - not just organisation-wide evaluations once a year - provides up-to-date and relevant data for leaders to make the right decisions on where to direct people investments.
CEOs expect the HR function to use analytics and critical thinking to create compelling business reasons to make effective and predictive decisions on people and organisation investments.
This applies to organisation design and workforce planning, as well as development of an effective leadership pipeline, where CEOs want HR to have the ability to make informed decisions on answers to questions such as:
- Who are the organisation's future leaders?
- How can the organisation improve the performance of current leaders?
- How can the organisation evolve to face up to dynamic market forces and meet customer expectations?
At the same time, this is where CEOs believe HR leaders have room for the most improvement.
Thirty-eight per cent of CEOs believe a top improvement area is succession planning and leadership development - not just for leadership at the top levels, but at all managerial levels.
Still, more and more Best Employer organisations are taking multiple approaches to talent and leadership assessment in order to better predict future success.
CEOs are also demanding return on investment on leadership programmes.
The bottom line is: as HR leaders get a seat at the table as key design-makers in business, CEOs expect them to have the agility to address people issues at the pace of evolving business demands.
Top HR leaders in the world believe that leadership driven by collective ambition - where leaders are united under a singular vision, purpose, and aspiration - is key to any organisation's growth trajectory.
By uniting leadership around a common goal, supported by intentional alignment from a "people" standpoint and customer centricity that ensures relevance, it helps CEOs to best leverage their talent and drive growth from the top down.
Plus, enjoy the added bonus of a better night's sleep.
The writer is CEO of Aon Hewitt's South-east Asia business.
This article was first published on Mar 17, 2017.
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