In our latest episode of A Week in My Flexible Work Life podcast, Juliet Mann discusses office/home working, ESG strategies and competition for talent with John McLaughlin, Chief Commercial Officer and Partner at EMEA. We’ve gathered some highlights from their chat below, but to listen to the full episode click here: …
John has worked for Aon in a variety of roles over the past 12 years in 5 countries across 4 continents, and is an established voice within the HR community. John leads Aon’s Human Capital Solutions commercial team in Europe with a focus on enabling clients to drive better decision making through human capital data to drive performance while managing risk.
When people think about Aon, they think insurance. Assessments solutions is a human approach to business, talk us through this.
Insurance is all about risk, assessment goes down that same path. “We assess people to understand if they are fit for an organization or a role, so we want to minimize the risk of making a bad hiring decision and a bad promotion decision.” That goes both ways, John says, “we want to make sure that people are matched to the right role, so they can flourish.” Assessment has been around for decades, even centuries, but Aon focuses on assessment in the realm of “industrial organizational psychology.”
What are your three words that sum up the future of work?
- Flexibility – how do we fit our work lives around our social lives?
- Skills – how do we ensure we keep the work force upskilled to power our evolving business models?
- Purpose or belonging – how do firms ensure that they reflect the values of their employees going forward?
Many people working from home feel like they don’t belong to the office environment. How do you instill this sense of belonging to keep the team going?
“Creating a compelling employee value proposition” is key. What are the values you stand for as an organization and how do you communicate that to your employees? Lots of firms do great work around ESG (Environmental, Social and Governance) credentials. The question is, how do they communicate this? Do the employees know about the work that they do? Do they let their employees participate in the ESG strategy sessions? He’s noticed that leading employers set up strategies, around ESG for example, but they also set up employee representative groups so that everyone gets a chance to influence the organization.
There is a lot of cynicism and criticism surrounding ESG, how can these strategies engage employees, give them a sense of purpose and upskill them?
“Some of the criticism for ESG is quite fair, because in general, it’s in its early stages. It’s a framework that is still evolving.” It encourages us to think about our actions on the social, environmental and governance side. How can a company set themselves up to incorporate all these different criteria necessary to build an ESG strategy and then report what they’re doing to stakeholders and potential employees? By setting up a framework, we can create a level-playing field, which “allows us to educate people on what we truly stand for as organizations.”
Do you see there being more importance placed on a connected office-environment?
Twitter started hybrid working before it was cool, “any of us today who are not working for Twitter, probably have experienced the headaches that come with trying to set up a hybrid meeting and last-minute trying to fix things.” Technology plays a crucial role but many technical aspects can go wrong, taking up valuable time. Education and etiquette are also important, “it’s very easy for the people in the room to take over the discussion.”
Incentives and rewards, can you make it possible to reward people for turning up to the office without taking away from the people who work from home?
“That’s probably my favorite topic right now.” The way we view hybrid working has shifted hugely since the pandemic. Pre-pandemic, working from home might have been something people gave part of their salary for, but “employees are rightfully asking how they are meant to cover expenses.” Employees have got used to not having these expenses, so the conversation has flipped and now John’s clients are asking him whether they should be paying for people to return to the office. His answer is yes, “it’s a fairly simple concept in the world of psychology and particularly the psychology of work, it’s easier to give something than it is to take away something.”
There are cultural benefits too, “an office environment makes the interconnection between people easier.” John went into his London office for the first time in two and half years, admitting that he wasn’t as productive as when he works from home. But that’s not the point, “you don’t go into the office to be on calls all day and to write a hundred emails, you go in to interact with your colleagues.” That is what the future of hybrid work is looking like, office-work has a different purpose now. Though, if there’s less employee productivity, what’s the point? “When I come back from the office”, John says, “I’m energized in a very different way”, claiming that his productivity increases significantly after spending time with his colleagues. Meanwhile, creative productivity actually comes much more naturally in an office environment as you create and honor opportunities with your colleagues far quicker. He says that office environments need to reflect this change, “in Aon we started to build up all these collaboration spaces” and predicts other companies will follow suit.
The hierarchy of needs have changed since the pandemic, what are your thoughts on that?
John points to Maslow’s hierarchy of needs, postulating that women, pre-pandemic, would have defined themselves differently to men in terms of their needs. He states an average woman would have ranked family first, in terms of importance in her life, followed by friends and then work, whereas an average man was more likely to define himself through work first, then family and then friends. “It shows how we’ve had these gender differences across the classical hierarchy of needs,” but there’s been a shift in values since the pandemic, predominantly on the male side. “Men have had a lot more exposure to their families over the past couple of years,” becoming more involved in the management of their house and children. Since the pandemic, “we have reevaluated what’s important to us in life and what is driving our energy” and this is a really interesting perspective for employers as they begin to think about how they can fit work around their employees’ social lives.
Let’s talk about upskilling, how do you think that has changed? Good talent is valuable, how do you keep people motivated?
Personal development for employees is crucial. On average, a skill becomes outdated in 3 – 5 years, so consistent upskilling is essential to stay relevant, but it’s also what employees want. Over the past 5 years salary has always stayed top in the study of what employees value the most, but second to that is career development.
Wages have been stagnant for a long time, while they are stuck, is there an onus on employers to provide alternatives such as career development and upskilling?
John challenges the question: “depending on the sector, wages have become unstuck,” noting financial services and big banks in particular. “It doesn’t actually matter if wages are stuck or increasing because the competition for talent, at the moment, has never really been seen before.” There’s this notion that labor markets have entered unhealthy territory because so many jobs are remaining unfilled, there’s a “real squeeze” in the labor market with competition that hasn’t been seen in 15 – 20 years. Therefore, many organizations are looking at the broader employee value proposition (EVP), which includes salaries, benefits and development opportunities. “EVP is the biggest thing going and flexibility forms part of that”.
Everyone is looking at the future of HR. Is there a risk employers will over-promise opportunities? What do you suggest to your clients to avoid that?
“We have all these different levers at our disposal when it comes to creating an employee value proposition”: pay, benefits, career development. However, he says “we will probably get to a point where we see diminished returns on investment for salary.” An example of this is Deutsche Bank increasing their total compensation in 2021 by 30%, “that’s significant. Can you continue pulling that lever? Probably not.” Therefore you need to diversify your EVP, ensuring not to double-down on one particular aspect. And everything has to be in balance, if you don’t offer flexibility, you’ll have to pay more.
What’s your advice for management when it comes to keeping employees motivated?
“Listening and allowing employees to participate.” Simply, by creating participation groups, organizations will become aware of their employees’ needs and wants and consequently know how to motivate them. It’s about listening to employees continuously because their needs are ever-changing, with hybrid working over the pandemic being a prime example of this. Companies who offered flexible working before it was popular are struggling because it’s normal now, it’s no longer a draw.
The structure of work has flattened, it is less hierarchical. The tide is turning, there’s a shift; is it the newer, younger, more diverse voices that the top brass want to hear from?
Everyone is talking about having a diverse workforce, “we need to make sure these voices are heard. Unfortunately not every organization is there when it comes to their D & I (diversity and inclusion) strategy.” This is even more prominent at leadership level, so it’s crucial we listen to young people and specific groupings across society.
An example of a company having a positive impact is Unliver, they are doing wonderful work in terms of their ESG strategy and giving back to the societies in which they operate. However, John poses an interesting question as to whether Unilever has over-rotated on their ESG strategy, “typically a good ESG strategy is a good business strategy… their business results did not reflect that necessarily.”
Where can we find out more about you?