Whitepapers & Publications

2016 People Fuel Growth_Executive Summary

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Risk. Reinsurance. Human Resources. Aon Hewitt Growth is on every executive's mind. But how do firms put thought to action? Aon Hewitt reviewed more than 40 studies/frameworks focused on what companies can do to "grow", and found that a consistent pattern emerges. All these frameworks present a set of levers that companies can pull: portfolio repositioning, market transformation, geographic expansion, segment domination. However, one important piece of the puzzle is over- looked or positioned as an afterthought. What is this one last lever for growth that is figuratively staring you in the face, and literally sitting right in front of you (or behind, or beside)? People. Although we may want our organizations to act like well-oiled machines, they are ultimately made up of people. A recent study 1 estimated that 84% of the market value of the S&P 500 is in the form of intangible assets. These intangible assets are created by people, and in many cases, are the people themselves. We therefore sought to understand the impact people have on growth through interviews with CHROs of 25 high growth Fortune 1000 firms (see scope). We also analyzed our proprietary data to identify differences between high and average growth firms. What emerged was the following model, which describes the role of people in fueling extraordinary growth. Firms that demonstrated profitable growth intertwined their business and people strategies in a dynamic manner, rather than having these be sequential: business strategy leading to people strategy. 1 "Annual Study of Intangible Asset Market Value 2015", Ocean Tomo 2 Furr, "Big Business….The End is Near: Why 70% of the Fortune 1000 will be Replaced in a Few Years." Forbes. 3 Levanon, Erumban, Cheng, et al. "Help Wanted: What Looming Labor Shortages Mean for Your Business, "The Conference Board. 4 Ibid Challenges: • 70% of Fortune 1000 companies have disappeared in the last 70 years 2 • Corporate profits have peaked in 2015 and are trending downward 3 • Talent shortages continue to put a premium on skills and experience 4 Scope of the study: • 25 CHROs in 15+ industries • 1.1 million employees represented • Over half a trillion USD total sales revenue • Companies designated as 'High Growth' for having top quartile revenue growth and above median EBITDA growth compared to peers, over a 3-5 year period (revenue and profitability parameters) People Fuel Growth The Role of Human Capital in Maximizing Growth

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