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Ravin, I wanted to speak to you about the opportunities that we have with human-centric productivity. Why do we, at Mercer, believe that is such a critical topic to be exploring this year within our organizations?

Yeah, you know, Kate it's a really good question. If you think of how work-- what has characterized work for the last 120 years? It's this notion of people being connected to processes, being, essentially, cogs in a wheel. And we have consistently looked for gains in productivity by making that process faster, more efficient, trying to get people to work harder.

Over the course of the last 20 years if you look at how much of those gains have been shared with the workforce, they're actually a fraction of what was being shared pre 1970. And one of the things I've always wondered is there is an inherent circularity, right. If we're investing less and less in the workforce, we're sharing less and less of the gains and we've hit basically a ceiling on these processes, what's the incentive for people to work different?

Yeah. Absolutely. And I love the fact that you ended on the topic of work different. But I agree with you, and we haven't seen some of those promised productivity gains from technology flow through to GDP growth. So I think there is an opportunity to relook at how we think about productivity at an individual at a team at a country level.

When we think about it in terms of organizations, what are some of the challenges in terms of unlocking productivity in our workforces? What gets in the way?

Yeah. So I think so much of it is we think of mindsets, tool sets, and skill sets. And I think from a tool set perspective, it's this pivot from talent being tied to a process to increasingly this more human-centric work, view of work, where work is organized around talent. And particularly Kate, as you know, in this era of GenAI, where we anticipate every individual, every worker, every employee having a copilot in doing work, what you start to see now is that more human-centric view of work where it's really revolving around the individual rather than people revolving around a faceless nameless process.

Yeah, absolutely. And it's wonderful how AI's forced us to really think about our own humanity--

Indeed.

--and how it's ushering in an era of I think more personalized work experiences, which is fascinating. I'm curious, where do you think-- what do you think that means for how we measure productivity in organizations? How do we need to maybe shift our mindset on that to succeed?

Yeah. That's a really good question. You know if you look at some of the early studies of generative AI, projections of between 10% to 30% gains in productivity. And you and I have talked about is this the moment to reset? For the last 30 40 years in this pursuit of efficiency, we've taken the productivity gains, questionable as to how much they are, but we've taken them all to the bottom line, we've not shared it with the workforce, to my opening point about the inherent circularity of this argument.

Do we now, with this these 30% gains, do we reset and say in order to build a more resilient enterprise, we've actually got to be much more thoughtful in how we share these gains with our talent and with our communities? Do we design in space for learning and well-being into the flow of work and creating the space so that some of those productivity gains are used to fund a four-day work week, more learning in the flow of work, more space for well-being, better assets and resources to support worker well-being.

And I think that's going to be really essential, Kate, because the model we've been on for 40 or 50 years where we've consistently tried to drive profitability at the expense of all other stakeholders, I think we've hit the ceiling on that.

Absolutely. Well you always excite me about this positive vision of the future. And I hope it does usher in an era where that productivity wealth that we now anticipate will be shared more broadly. Thank you Ravin.

Yes.

It's been wonderful to chat today.

Likewise Kate.

So Gord, one of the things that we saw coming out in Global Talent Trends this year is just the criticality of creating trust between worker and employer and ensuring that we have equity in our workplace. I'd love to hear your thoughts around why is that peaking this year and what can organizations practically do to make sure they bolster trust and remain an equitable environment.

So I think it's peaking this year for a variety of different reasons but largely, because it's forefront in the legal environment that we're seeing. With companies passing new laws around pay transparency and pay equity, so organizations are needing to comply, you're seeing more organizations taking action around that. And I think truly, the younger generations of employees, their expectations have fundamentally changed. And so, they have expectations now around working for an employer that treats people fairly, that has a policy around a living wage, that it has sustainability practices in place, because those are things that they genuinely care about. And so, they're looking for employers to take a stand on those things as well.

And so I think from an employer perspective, if you truly believe in that as well and you want to attract and retain the generation of workers that care about that, there's some things that you fundamentally need to do. So you need to be prepared to communicate transparently around pay. And not just comply with the minimum requirements of the law but really start to think about the spirit of fair pay, and pay equity, and pay transparency, and what that means about your organization. So I think that means you need to take a hard look at your existing employee data. You need to look at pay levels within your organization by gender or by ethnicity or by region or whatever the case may be.

You need to look at rates of promotion. You need to look at rates of exit of different parts of your population to see if you may have problems there. You need to look at all the elements of the employee data that you've got. And if you're not collecting enough of it today, then go out and even collect more so that you can really understand what the experience is that your employees are living today. And then, you need to be prepared to communicate, I think, much more openly than you have in the past and to empower frontline managers to also communicate much more transparently than they have in the past. Remembering that this is new for them.

Absolutely. I was going to say, a lot of that advice is great for HR, because I think HR has the ability to look at those internal labor flows and look at some of the pay inequities that might exist. But at the end of the day, it's a manager having a very important conversation with an individual. What are some of the things that managers need to keep in mind if they don't want to erode trust in their organization?

Yeah, so there's a bunch of things that they need to keep in mind. First of all is that, the employees' view of the organization or the employees' trust in the organization is not just based on that one conversation that you're having. So you need to live it every day and understand that the employees are experiencing the organization throughout their working career and even outside of work. So it is difficult to balance all of those different things, but it is going to be based on the conversations they're having around their own pay and progression as it relates to their own contributions and performance. It's going to be based on what they hear from their colleagues and friends. So ensuring that there's consistency in messaging across the entire team is important, because we all know that they all talk to each other now.

And on social media, of course.

And that they post on social media. So-- well, you can't always control what gets posted on social media. Understanding what's out there and understanding that in today's day and age, everything is transparent. So I think having consistency is really important and as I said earlier, understanding the data that you have and being able to address where there are inconsistencies or potential inequities so that you really can stand up in front of your employees with confidence that what you're talking about is fair and equitable. And then engaging or empowering managers to have those conversations as well.

I agree with you. I think we have to be in a two- way conversation with our people all the time, because they're going to be getting information from different places. And that comes down to having a clear philosophy and making progress on some of the topics that you brought up today.

Carolina, thank you so much for taking a few minutes out of your busy day to chat on Corporate Resilience. What can we be doing within organizations to make sure we are fending off the short term risks and the long term risks to ensure prosperity in 2024 and

Oh, wow. Such a great question. Thank you so much. I think it is important to recognize the fact that the relative predictability of the business environment has gone down compared to what we've seen in the past decades.

Absolutely.

And that means that the operating environment that businesses are facing today is so much more. Complex it is interconnected. It is it's fast-paced. And because of that, we have to make meaningful progress towards connecting people, risk, strategy. We have to make the connection, watching what is coming at us, towards us at the risk horizon. How does that impact business operations, and how can we make sure we use that in order to build strategies that can build better resilience?

I know you work very closely with the World Economic Forum on the Global Risk Report. As we start to look at that risk landscape, what do you see as some of the risks that impede the resilience of the organization near term?

I actually think that the polycrisis word describes the environment in a very tangible way because it's not the individual risks, it's the fact that it is so interconnected

--And the cumulative effect.

Exactly. One risk will exacerbate and accelerate another risk. And it's really difficult to read what the consequence might be because it's a long chain, and you have to look at your organization, more as part of an ecosystem, than looking at it as an individual business, and that is important to remember.

So what are the implications for business planning because that does sound pretty tough, and could lead to a number of different scenarios playing out over the next couple of years?

Yes, and I love that you used the word, scenario, because that is really, really critical. To think about your planning in terms of playing out different scenarios, and really testing, and trying, and discussing how might this potentially impact our business model, and what does that mean for our strategic direction. I also think it is absolutely critical to have a diverse team around the table when you look at risks, when you look at strategies for the future. Do not invite the same old group. Have a fresh pair of eyes and really think about diversity in the greatest sense of diversity, more important than ever.

Absolutely. Well, I'd love your fresh eyes on the challenge of people risk. How can we help individuals be more resilient as we look towards the challenges they will face in the year ahead? And I think it's about thinking health, well-being, psychological safety. There are a lot of elements that goes into building resilient people. But it's important to remember that in this complex environment, where we're putting so much pressure on our employees, you have to also think about how you make them resilient because that is the way they're going to be able to bounce back, or fend off, or come up with a new strategy.

So, thinking about social networks, thinking about how we can create a safe environment for employees to really thrive in, thinking about how we can support their well-being in many different ways. And of course, depending on which generation we're talking about, because it's not going to be the same for everyone. But all of those elements matter. Yeah. Thank you. And last question for you. When you think about, as this year plays out, what is the best advice you can offer to people in the HR function for staying ahead of risk and organizational resilience matters?

I think it's really important to think about the function as part of an ecosystem. Be proactive. Reach out and collaborate across silos and really think about the diversity that you invite to the table when you think about your strategies for the future.

Absolutely. I think the pandemic definitely taught us how interconnected we are, and how it's not just the resilience within our own ecosystem. It is the suppliers and the customers that we work with that have an impact, but equally, they're the voices that matter when we're thinking about how to mitigate risk. Carolina, thank you so much for joining me and sharing your thoughts on this trend.

Thank you.

We need to figure out how to get new levels of productivity out of a smaller group of people. And, of course, there are new technologies, like AI, coming into the workforce, which hopefully will enhance productivity. But, of course, we need new skills, new capabilities, and we need to bring all those things together to really create more meaningful and exciting work for all the people all across Asia-Pacific. So it's really important.

Yeah. We were at this conference today, and I was just hearing that 1 in 3 to 1 in 5 people by 2030 will be over 65 in your workforce. So it is staggering. But it's interesting, the linkage you make to productivity, because there's a lot of discussion about that at the moment. How do we make sure that that productivity benefits humans as opposed to just benefit shareholders?

Because there's a lot of opportunities with generative AI being bandied around, and I know that we both have some concerns on that front.

Yeah, absolutely. I think if we think about AI as a technology that will compete with human beings and we use that zero-sum mindset, then, yeah, there's a lot to be concerned about. But I think there is room for optimism. A lot of what artificial intelligence will do is really augment human beings. And we've been saying that for years. This is not a new conversation.

But now here's the opportunity. And if we can really find ways to get people excited about building new skills and capabilities and trying new tools and technologies, experimenting, unlocking their curiosity, perhaps the energy that they will bring to work will be so much more. Maybe they'll have that real opportunity to really engage in a different way.

And it seems to me-- I don't know what your opinion is-- that a lot of what AI will do will remove work that, frankly, people don't enjoy doing that much, anyway, that boring transactional stuff. Perhaps they'll enjoy supervising the technology rather than getting in the middle and using these tools to do boring, meaningless tasks, anyway.

Well, I am energized and inspired.

Yes.

And I've been using "amplified intelligence" instead of "augmented," just for a new phrase.

I like that better.

But I agree with you. Not everybody is on that journey. So how do we cultivate those digital-first cultures in our organization and get people as whipped-up and inspired as we are?

Yeah. I think experimentation is important, exposure, all of those nice ease that we have, and really getting people to see the opportunity with this. And also then getting them to see the path forward in terms of the kind of skills and capabilities that it gives them the opportunity to lean into. Because at the moment, what we see is a lot of reskilling programs focused on building skills that are then very difficult to find a place for in the workforce.

I think with AI coming in, we might see a lot more experimentation. Organizations are more willing to invest. They're trying to figure out ways to unlock that productivity with this new technology. And so they'll give people some room to really go and try.

And I think that is a great opportunity for leveraging curiosity, for building new capabilities. It's perhaps the catalyst that we're looking for. The one other thing I really thoughtful about here is the concept of trust. In order to leverage that experimentation, to be able to get people to lean into that, to take that risk, then we have to have mutual trust, both ways. And we've seen some progress on that, I know, but maintaining that, I think, is mission critical.

Yeah, absolutely. I'm also curious, as a fellow organizational psychologist, what are some of the new metrics and data coming into organizations that are now at our fingertips? Because this is an evolving area, and I know you, like me, have a passion for that data and how it's being used in organizations.

Yeah. So the two streams of data that I've seen being particularly interesting in recent years-- so the first is skills data. So self-discovery. We talked a lot over the last couple of days how these AI technologies perhaps can help people discover things they didn't really fully understand about themselves so that they can then unlock that and start to use it in a more purposeful way at work, and I think that can be really exciting.

So skills discovery, using these technologies, and perhaps, yeah, really connecting there. So that's one stream of data. The other is behavioral data. So what are people actually doing? When they're using tools and technologies-- let's say they're using generative AI-- we'll learn a lot about them, what they want, what their needs are. And I think that's an amazing opportunity. As long as it's done in an ethical and respectful way, people opt in. There are many ways to look at this.

But that's a really great opportunity for leaders and managers to create a real human stream of data that they can use to respond in a proactive way.