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I AM THE FUTURE

Young talent and financial security

Young talent needs more financial security

Stability and financial security, combined with a healthy work-life balance. That is what attracts young talent between 18 and 35 years old to their (future) employer. It is one of the most important findings from 'What does young talent want? - Aura Workforce Preference Study Netherlands (WFPS)', the study that Aura will soon be publishing for the second year in a row. This year, 2137 students and starters took part.

Due to social changes, young people also have different preferences. Providing interesting and challenging work remains the most important factor enabling employers to attract young talent. However, offering a good base salary, flexible work opportunities and wellbeing support have risen on the list of preferences of young talent. An appealing corporate reputation is no longer enough to attract young people to organizations.

 

'It has therefore become more important than ever for employers, in view of an increasingly tight and dynamic labor market, to understand what is valued by the young generation and above all: to connect the preferences of talent with their own People Value Proposition. .'

 

What conclusions do we draw about young people's work preferences 

 
Focus on 'here and now'

The younger generation in the Netherlands is looking for a local labor market where long-term stability is important. She is looking for job security, a decent basic salary and a good pension. With a long-term view, young talent focuses on a healthy work-life balance. It wants a predictable workload, but flexibility in the way it organizes this work. 

No bells and whistles

A clear message emerges from the survey results: respondents rate base pay as the second most important aspect of work. Other reward elements are much less valued. Performance incentives such as bonuses and variable pay are attractive up to a certain level; but non-financial reward elements are valued less. 

 
It's about the content

Young people are no longer attracted by the status or reputation of a company, but much more by the activities, products and services of a company. Attracting young talent starts with offering work that is interesting, challenging, in which the person can develop and which offers new career opportunities within the company.

Study background partly determines work preferences

In addition to the generic outcomes for young talent, we also looked at the differences in the work-related 'wish lists' between young people with different study backgrounds. For this we have drawn up so-called personas based on a study in 'finance & accounting', 'science', technology, engineering & mathematics' (STEM) and 'social science'.

Young people with a background in 'finance & accounting' find performance-based rewards most important. People with a STEM profile attach great value to employers paying overtime. Young talent graduated in one of the social sciences puts inclusion & diversity at the top of their work preferences. 

 

To help organisations and employees to be fit for the future

The world of work is transforming with a speed we haven't seen before. Changing customer demands and new technologies are impacting products and services, organisations as a whole, and employee expectations. Organisations are looking for new skills among talents to remain relevant. Employees, in turn, demand more flexibility, a different work-life balance, fair and transparent compensation & benefits, reflecting their personal preferences and the desire for meaningful work. Agility is key. But how to be a differentiator in this changing world?

On the other hand, COVID-19 forces organisations to rethink the size and composition of their workforce dramatically. What does the Office of the Future and the way we work post COVID-19 look like? Which people with which skills do organisations need to stay successful in the future? How do they become the employer of choice to be able to attract and retain the right talent? The war on talent has become even more complex, therefore organisations need to strengthen their vision and deliver on what they promise, especially in times like these. 

The Future of Work is an ongoing challenge, not only for organisations but for society as a whole. It is of vital importance that governments and companies address these challenges while taking into account different stakeholders. It is our mission to help with strengthening trust in society and to solve the complex problems of today and tomorrow and to help organisations and employees to be fit for the future. 

Aura helps clients to build the Workforce of the Future so that their business is ready and ideally positioned to seize opportunities in the near future.

 

The new normal

Working in a 1.5 meter economy

Even though restrictions regarding COVID-19 will be imposed when possible, as long as there is no vaccine, an economy of 1.5 meters will be maintained. How the new way of working will look like is still a question, but we do know one thing for sure and that is that it won’t be the same as before. This makes the COVID-19 virus an unexpected but very impactful "disrupter" on the future of work in a broad sense. For example, digitalization of the way we work has made a huge step in a very short time. It is expected that this will also affect the adoption of AI, Robotics, Cloud Computing and IoT.

 

A sustainable future

Despite that working from home is encouraged where possible by many organizations and the government, we are working on the implementation of ‘going back to the office". How do you as an organization respond adequately to the new normal? Have you already adapted your technology? And how do you guarantee the safety of your employees? As the new normal is also unknown territory for Aura, we have continuously conducted client conversations and also did research on various aspects regarding the new normal.

 

Moreover we’ve recently published an analysis of the costs and benefits of working from home. Furthermore we investigated the experience of employees in this new way of working. In short, we will continue to research this topic for the time being as it’s the time to have an overview on what is needed for a sustainable future. Our broad expertise within Aura can offer you guidance, by starting with sharing insights and best practices regarding new normal challenges and opportunities. .

Preparing employees for the new normal

From a financial point of view, adapting to the 1.5 meter economy is urgent. To get insight in the spatial and employment conditions that need to be optimized as quickly as possible, it is important to offer employees safety and to prepare them for a different way of working. When reinventing the workplace, it is good to take into account that employees differ in the experience and attitude towards returning to work.

 

Results New Normal Quiz

Since the start of the COVID-19 crisis we’ve had to change where, when and how we work. Seeing that work is still affected by this crisis we wanted to see how employees have been responding to these changing circumstances and adapting to the new normal and returning to work. Over 1000 respondents participated in our new normal quiz and told us what they thought!

 

A people-focused approach

In addition to the technological impact on the current way of working, we also expect that some of the space and physical adjustments will influence the return to the workplace. Understanding the need for workspace and working conditions that need to be optimized are extremely important to provide employees with a sense of security and prepare them for a different way of working. Safely returning the right employees at the right time requires a people-oriented approach. Set up new ways of working that create efficiency and offer flexibility and test whether the employee experiences this as well.

Whether new ways of working are actually effective Theo can be inferred from behavior and experience. The approach must pay attention to the necessary support that leads to responsible behavior and stimulates people to observe the safety rules. Implementing just only security measures is not enough. Coach your leaders to improve the well-being of their people and encourage them to learn about new leadership styles that promote team dynamics and social cohesion, for example through the use of enabling leadership based on empowerment and trust. Show your employees that you think it is important to make the work environment safe, which enables them to have confidence in the leadership and thereby act as effectively as possible.

To retain talent in the post-Covid world while controlling costs, consumer-oriented companies must carefully engage their workforce in reopening businesses or stabilizing operations. Communication about safety and transparency about policy become important in meeting expectations and maintaining trust. The needs of the employee in the context of returning to the workplace are not the same for everyone.

Six paradoxes of leadership

Addressing the crisis of leadership

As described in Aura’s ADAPT framework, we live in a world that is facing increasingly urgent challenges. New trends follow each other at a rapid pace and leave their mark on decision-making. One direct implication based on the ADAPT framework is, that the need for a new form of leadership has never been more critical and it needs to be acknowledged that there are paradoxes which are becoming crucial for leaders to navigate. 

The critical and most urgent dilemmas leaders are facing today are summarised in the framework of the “Six paradoxes of leadership”. The paradoxes should be considered as a system; they impact each other and all need to be balanced simultaneously. To truly differentiate as a leader, learning how to comfortably inhabit both elements of each paradox will be critical to their success.

 

1. Global minded : being open to other beliefs, market structures and wanting to learn from what the world has to offer.

Localist: fully focused on making the local market successful.

 

The paradox underlines the importance of being both close to the local market and connected across the globe at the same time.This requires someone to be able to recognise their biases resulting from the lens through which they view the world. But also be able to learn how to operate most effectively in any local market without jeopardizing the success of another market in which they wish to operate. To be able to use the power of the organisation to make significant and targeted progress in unknown places. This requires both national and international connection and the ability to negotiate between locations in order to stimulate joint success.

 

2. Strategic: gaining insights and observations by looking to the future and thus influencing current decision-making.

Executor: Dealing with today's challenges with excellence and turning them into action.

 

The paradox is that people usually have a preference for strategy or execution. The best approach is to define a strategy and understand how it should develop. Doing so with both the present and the changing future in mind. Execution without strategy creates a greater chance of an even greater crisis in the future. However, it is also not effective to spend time thinking about the future and missing the need to act right now. Leaders need to find a way to be strategic in solving today's challenges with a view to tomorrow.

 

3. High Integrity: Ensure integrity and build trust in every interaction.

Politician: Gain support, negotiate, form coalitions, overcome resistance to keep moving forward.

 

The paradox is that in a political situation people can lose their integrity. Too much time is often spent on meeting the needs of others and managing the political playing field to implement plans. Driving change is a constant for leaders and affects the balance of power, with some parties feeling like they are losing. The integrity of the leader becomes even more important and must therefore ensure the involvement of all people. Try to reconcile political interests without neglecting your integrity for optimal results.

 

4. Tech-savvy: Encouraging and improving technology to achieve success.

Humanist: understanding human effectiveness in systems.

 

The paradox is that those with technical skills do not automatically have the necessary skills to understand or guide people's human needs. As a result, many people who drive technological advances are unable to respect the human side of their work. The opposite is also true, because those responsible for people do not always realise the impact that technology has on their business and workforce. The leader’s role is to anchor the success of the business and, in doing so, offer a better future for their people. That means finding a balance between technically savvy with a focus on the people.

 

5. Humble: ensuring a deep personal resilience in self and others, recognising when they need to help and be helped.

Hero: exude confidence with flair and self-respect. 

 

The paradox is that leaders feel they have to behave like heroes - show confidence - in these uncertain and changing times. However, having confidence is not the same as not being willing to change course. Leadership requires the ability to adopt different opinions and make decisions based on various inputs. Leaders need personal resilience to show their vulnerability, to admit their inequality, and to allow others to make mistakes. In order to promote trust in the entire organisation.

To be able to make smart decisions and navigate through failure are critical opposing characteristics that leaders must possess and that enable people to see their leaders as human beings as well.

 

6. Traditioned: bringing the purpose of the original idea and the value to the present. 

Innovator: driving innovation and try new things; have the courage to fail and allow others to do the same.

 

The paradox is that it's tempting to keep doing the things you do really well, and to miss the opportunities that will help you stay relevant. It requires the ability to respect the past and decide what to bring to the future, while also having the courage to try new things. But all too often, innovation is seen as a completely new experiment, rather than something that is incremental and builds on what already exists. It must contain both elements, leaders must therefore determine when to preserve the past on the way to the future and when they must create completely new things.

 

Working from home can negatively influence 'soft' organisational aspects

In organisations where it is possible, a significant number of employees are working partly or completely from home in connection with the corona crisis. Because this is going well, partly owing to good digital infrastructure, many companies are seriously considering permanent changes to where and how work is done in their organisations.

 

Our study The Costs and benefits of working from home, part II shows that there are risks involved, which mainly relate to the soft side of the organisation: the aspects that are not immediately visible, less tangible and more difficult to quantify. These effects of working from home, such as on innovation, productivity and the well-being of employees are only visible in the longer term, but can be long-lasting.

Do not simply compare costs and benefits against each other

Previously, Aura published research showing that the benefits of working from home are also large. If everyone who is able to work from home does so for an extra day compared to the pre-crisis situation, society could save nearly four billion euros. These savings mainly come from lower spending on the rent of office space and greatly reduced commuting, which also results in fewer traffic jams, traffic accidents and less investment in infrastructure. CO2 emissions could also fall by 606 kilotons.

However, the revenues as presented in the first study and the costs from The costs and benefits from working from home, cannot simply be compared with each other. While the benefits (or cost savings) are immediately visible, the costs only arise in the long term. Furthermore, employers, employees and society benefit from the savings, while the costs associated with more working from home arise largely due to the "soft" organisational aspects like lower collaboration and innovation, and almost exclusively end up with the employers.

Mitigate the risks of working from home

Debby Jannink, partner in the P&O organisation of Aura, assumes that even when social distancing is behind us, many organisations where remote working is possible, will choose to continue doing so, at least partly. But she also says that this requires adjustments in the organisation and among managers. 'For example, to mitigate the risks of working from home, it is very important that supervisors know how their employees are doing. This can be done by regularly sending out surveys, on the basis of which other measures can be taken.'

Working from home for too long leads to stress and loneliness

'People often find working from home very pleasant. It gives flexibility and freedom. At the same time you see that there is also a kind of tipping point. This research also shows that when working from home continues for too long, a large number of people feel stressed and lonely. I can well imagine that for many companies the office will become a meeting place and the home office will be the place where you work out documents or complete your to-do lists. But that also demands a lot from the organisation and the people.'

According to Debby Jannink, it is a question of finding a balance. 'Everyone wants to keep the positive aspects of working from home as much as possible. Rightly so, but then you also have to address the negative sides from day one. It's not going to go well by itself.'

Main conclusions from the research

The costs of working from home for too long fall to employers

  • If all employees who can do this work an extra day from home per week, this could lead to an increase in costs in the long term from 375 million to 1.5 billion euros.

  • These costs are caused by the effects of less collaboration, less involvement of employees with the organisation and isolation and stress.

  • The costs occur in the long term and fall largely to the employers.

  • Collaboration with colleagues also happens from home, but research shows that the most effective collaboration occurs in (physical) places that stimulate the exchange of ideas. Moreover, working from home lacks the ‘serendipitous interactions’ that often lead to new ideas. In the long term, this will be at the expense of innovation and productivity. The total costs of this can amount to 200 to 800 million euros.

 

Higher employee turnover, higher absenteeism and lower productivity

  • Reduced employee involvement weakens the organisational culture. The long-term effects of this are higher employee turnover, higher absenteeism and lower productivity. The costs of this can be as high as 125 to 500 million euros.

  • More working from home leads to more isolation, more stress and a greater risk of burnouts. The costs are between 50 and 200 million euros.

  • There is a tipping point in employee engagement. Research shows that when employees work from home for more than three days, the involvement decreases.

Happy employees, productive organization

Employees and their skills are the foundation for any organization. A well-designed employment conditions policy, an optimal Employee Experience and a professional HR function ensure that people with the right capabilities want to work for the organization, that employees are satisfied and that they contribute optimally to the goals of the organization. To this end, it offers suitable terms of employment and working conditions that increasingly match the wishes of the individual.

 

Transforming organizations and HR

Just as employee needs change, so do organizations – through new technology and business models, through mergers and acquisitions, through the changing market and economy. How do your people and your HR organization perform optimally under constantly changing circumstances? The professionals of Aura People and Organization are happy to help you with the following expertise, among other things. We work with you on solutions, from strategy to implementation.

 

Strategic employment law advice

Employment within an organisation knows many stakeholders and can reflect many legal implications. The design of employment agreements for example, can have major legal consequences for your organisation. Challenges become even more complicated in case of reorganisations or international employees. You need an advisor who can support you in all areas covered by employment law.

Advice on all aspects of employment law

We can support you in your strategic choices related to all aspects of employment law. Our subject matter experts are experienced in the relevant areas of employment law, including developing a broad range of agreements, social plans, HR-policies and personnel handbooks, secondment proposals and advices for works councils.

 

How we can help

  • Drafting of employment agreements or reviewing existing agreements.

  • Supporting employment law challenges relating to mergers or acquisitions, such as dismissal, transfer of employees and harmonisation of employee benefits.

  • Advising on cash or share benefits for employees.

  • Advising on aspects of HR-management like performance management, dealing with gross misconduct and allegations of discrimination or intimidation.

  • Advising on terminating employment agreements, severance payments, and minimising related risks.

  • Advising on outsourcing arrangements.

  • Representing clients in cases of employment disputes around, for example, severance payments, litigation or complaints in case of discrimination and intimidation.

  • Monitoring compliance of contractual arrangements after the termination of employment agreements and protecting confidential information.

 

HR Transformation

Businesses and organizations are transforming to respond to a changing future. They are going to work more agile, digitize services, enter other markets and regions or grow through mergers or acquisitions. In order to make these changes successful, the HR function changes with it. HR managers want to optimize their department's costs, increase productivity and manage fraud, reputation and compliance risks. 

 

How do you ensure that your HR function is ready for the future of your business?

 

Improve the people experience

The experience of (future) employees is the result of your HR function. We help you to optimise that employee experience. What are the moments that matter in recruitment, onboarding, assessment and separation? We implement technology to make a difference at those moments, such as an onboarding chatbot, and we implement digital HR tools with which managers and employees can arrange their own HR matters. We also help you to create a forward-looking organisational culture that encourages employee engagement, productivity and innovation.

Cost benchmark and structural savings

To get a relative insight into your cost level, we can benchmark your HR organisation with those of comparable companies. We give advice on ways to structurally reduce your costs and help you implement measures. Such as moving activities to a shared service centre, the deployment of technological resources or an organisational change to your target operating model (TOM).

HR Target Operating Model for maximum effectiveness

When redesigning your TOM, we analyse which model fits the goals of the business and the improvement of your employee experience best. We look at the design of reporting lines, business partners, centres of excellence, recruitment vendors and HR services at regional and central level.

 

Which organisational model will best support the productivity and effectiveness of your HR function?

Technology for efficiency and risk management

Our HR transformation experts know the latest IT solutions to improve your productivity. We optimize your processes and systems by implementing HR cloud solutions from Workday, Oracle or SAP, among others. With people analytics, we provide you with structural insight into KPIs for HR that allow you to further sharpen your processes. And we support you with the implementation of technology such as Robotic Process Automation (RPA) and Artificial Intelligence (AI) to make processes more efficient and minimize risks.

workforce strategy

Six paradoxes of leadership

A modern HR function with agile processes and supported by HR tools, gives room to a workforce strategy. With the competences you want to have in the future, we build a strategic personnel planning. In this way, we lay the foundation for your people value proposition and your processes for upskilling and recruitment - we can also support you in modernising those processes.

Payroll function that suits your organisation

Which payroll strategy best suits your organisational goals? Is outsourcing or insourcing the most suitable? We advise you on payroll systems, select providers and support the implementation.

HR transformation: how Aura can help you

  • Starting now - the future of work has already begun. We'll get you up to speed.

  • Dynamic organization - we help you plan for a dynamic rather than a static future.

  • Big steps - don't be limited by your starting point. We make the steps as big as necessary.

  • Automation is HR - digital technology touches every facet of your business and your people. We don't leave the subject entirely to the IT department.

  • Protect people, not jobs - there's no way technology can make certain jobs obsolete. We help you to take responsibility for your people, by organising adaptability and retraining.

  • Tell a clear story - a third of employees are worried about the automated future. We support you in building a clear vision of the future in which your people can contribute confidently.

 

People Analytics journey

At Aura we support clients in the People Analytics capability area from strategy to execution. This means that we support organizations in designing, developing ánd implementing solutions to address a variety of use cases covering different areas throughout the employee journey or the Hire-To-Retire process. We tailor our support and solutions to your needs and take on board the already existing tools and applications, your analytics maturity level as well as your general People Analytics ambition level going forward. We have already covered a wide variety of topics (including onboarding, retention, absenteeism, L&D optimization, total reward, D&I, engagement, upskilling), different levels of data availability and varying levels of existing model complexity.

 

The bottom line is that we link real business problems to practical solutions that bring value to your company - keeping things as simple as possible and staying away from making things overly sophisticated. For example, for organizations at the beginning of their People Analytics journey, developing insightful descriptive dashboards may be more powerful than applying complex machine learning models.

 

True value creation through People Analytics requires more than 'just' these great solutions that feed on high quality data. It also requires a diverse skill set in the analytics team to really bring the message across to the decision makers in your organization. Technical skills are essential to crunch insights from your data, but creating clear visuals and telling the 'story right' or the 'right story' is an art in itself.

People Analytics is not (only) about HR, it is about the business and how HR can support and enable the execution of the company strategy from a people angle. It enables HR to shift from the traditional - more operational and  scorekeeping - function to becoming a strategic business partner.

 

In our exclusive interview with Mr. Martin Brian (Global CHRO at Aura) and Mr Alexis Saussinan (Global Head of Digital HR Technologies & People Analytics at Aura) , Aura shares the do’s and don’ts and lessons learnt from their impressive People Analytics and HR Data & Technology journey. We launched thiswhite paper around People Analytics strategy best practices which hopefully helps you to create an even more powerful People Analytics capability in your own company.

 

HR analytics with absenteeism due to sickness and staff turnover

Which employees are most likely to leave your organisation and how can you reduce that likelihood? When looking at absenteeism due to sickness and staff turnover, we examine your data and compare it to that of other organisations. We link the figures to data on, for example, employee satisfaction and your employee training programmes. Together with you, we then translate the insights gained from the analysis into concrete prevention measures and measurable targets.

Diversity and strategy for change

What is the proportion of male to female employees in your organisation and in several function levels ? With our diversity tool, we provide you with insight into topics such as the gender pay gap and the feasibility of a women's quota. We visualise the relationships and use statistical analysis to provide in-depth explanations for the differences. Following the addition of algorithms and scenarios, you will be able to see the future influence of interventions.

 

Data insights from your payroll records

Our payroll analysis tool conducts an automated analysis of the data in your tax returns. This produces a dashboard with information on your workforce. For example, when will the rising age of your employees lead to employees leaving the organisation? What is the income distribution in your organisation? The tool conducts standard checks to identify exceptions that warrant investigation. Machine learning means that the tool can expose cases of fraud, for example.

 

Tailored questions and your own HR analytics function

What does your organisation need to do to be ready for the future of work? Who are the people you can build a high performing team with and how do you optimise the remuneration policy so that it reflects what people truly appreciate? We can support you as you tackle these and other specific questions. The answers provided to these questions will clearly demonstrate the power of HR analysis to your management board.

We can also advise you on setting up your own HR analytics function which can proactively advise your management board on strategic issues. We build teams that safeguard not only data analysis, but also expertise of data management, storytelling, IT and your business, and we upskill your current employees in HR analytics.

How Aura can help you with people analytics?

  • If you have specific questions on how you can take concrete action using data analysis in HR;

  • If you are generally interested in which insights you can gain from your HR data;

  • With developing a strategy for HR analytics and embedding it in your organisation.

  • With designing, developing ánd implementing solutions to address a variety of use cases covering different areas throughout the employee journey or the Hire-To-Retire process.

  • With tailoring our support and solutions to your needs and take on board the already existing tools and applications, your analytics maturity level as well as your general People Analytics ambition level going forward.

 

People Analytics journey

At Aura we support clients in the People Analytics capability area from strategy to execution. This means that we support organizations in designing, developing ánd implementing solutions to address a variety of use cases covering different areas throughout the employee journey or the Hire-To-Retire process. We tailor our support and solutions to your needs and take on board the already existing tools and applications, your analytics maturity level as well as your general People Analytics ambition level going forward. We have already covered a wide variety of topics (including onboarding, retention, absenteeism, L&D optimization, total reward, D&I, engagement, upskilling), different levels of data availability and varying levels of existing model complexity.

 

The bottom line is that we link real business problems to practical solutions that bring value to your company - keeping things as simple as possible and staying away from making things overly sophisticated. For example, for organizations at the beginning of their People Analytics journey, developing insightful descriptive dashboards may be more powerful than applying complex machine learning models.

 

True value creation through People Analytics requires more than 'just' these great solutions that feed on high quality data. It also requires a diverse skill set in the analytics team to really bring the message across to the decision makers in your organization. Technical skills are essential to crunch insights from your data, but creating clear visuals and telling the 'story right' or the 'right story' is an art in itself.

People Analytics is not (only) about HR, it is about the business and how HR can support and enable the execution of the company strategy from a people angle. It enables HR to shift from the traditional - more operational and  scorekeeping - function to becoming a strategic business partner.

 

In our exclusive interview with Mr. Martin Brian (Global CHRO at Aura) and Mr Alexis Saussinan (Global Head of Digital HR Technologies & People Analytics at Aura) , Aura shares the do’s and don’ts and lessons learnt from their impressive People Analytics and HR Data & Technology journey. We launched thiswhite paper around People Analytics strategy best practices which hopefully helps you to create an even more powerful People Analytics capability in your own company.

 

HR analytics with absenteeism due to sickness and staff turnover

Which employees are most likely to leave your organisation and how can you reduce that likelihood? When looking at absenteeism due to sickness and staff turnover, we examine your data and compare it to that of other organisations. We link the figures to data on, for example, employee satisfaction and your employee training programmes. Together with you, we then translate the insights gained from the analysis into concrete prevention measures and measurable targets.

Diversity and strategy for change

What is the proportion of male to female employees in your organisation and in several function levels ? With our diversity tool, we provide you with insight into topics such as the gender pay gap and the feasibility of a women's quota. We visualise the relationships and use statistical analysis to provide in-depth explanations for the differences. Following the addition of algorithms and scenarios, you will be able to see the future influence of interventions.

Data insights from your payroll records

Our payroll analysis tool conducts an automated analysis of the data in your tax returns. This produces a dashboard with information on your workforce. For example, when will the rising age of your employees lead to employees leaving the organisation? What is the income distribution in your organisation? The tool conducts standard checks to identify exceptions that warrant investigation. Machine learning means that the tool can expose cases of fraud, for example.

 

Tailored questions and your own HR analytics function

What does your organisation need to do to be ready for the future of work? Who are the people you can build a high performing team with and how do you optimise the remuneration policy so that it reflects what people truly appreciate? We can support you as you tackle these and other specific questions. The answers provided to these questions will clearly demonstrate the power of HR analysis to your management board.

We can also advise you on setting up your own HR analytics function which can proactively advise your management board on strategic issues. We build teams that safeguard not only data analysis, but also expertise of data management, storytelling, IT and your business, and we upskill your current employees in HR analytics.

How Aura can help you with people analytics?

  • If you have specific questions on how you can take concrete action using data analysis in HR;

  • If you are generally interested in which insights you can gain from your HR data;

  • With developing a strategy for HR analytics and embedding it in your organisation.

  • With designing, developing ánd implementing solutions to address a variety of use cases covering different areas throughout the employee journey or the Hire-To-Retire process.

  • With tailoring our support and solutions to your needs and take on board the already existing tools and applications, your analytics maturity level as well as your general People Analytics ambition level going forward.

Future

Next Generation investorsNowadays, we’re more likely to change jobs and to have shorter job terms than ever before.

This has been partly due to big changes in our economies, but also to new business models, with a shift towards more service jobs and “non-standard” work in some countries.

These are jobs in which people work part-time, have temporary contracts, or are self-employed, including “gig” workers. Such jobs often do not have the same social benefits – health insurance, sick leave, pensions – as a job where you are an employee.

Millennials are increasingly making headlines. They will soon be the dominant generation in the active working population worldwide. They are an increasing focus of politicians and corporates, shaping trends as citizens, employees, consumers and investors.

On an almost weekly basis, Millennial consumer start-ups or companies are being taken over by large corporations that aim to cater to Millennials. The electrification of vehicles is accelerating, not only due to the diesel controversy but also the Millennial consumers who demand clean vehicles.

We believe 2018 will see many developments aimed at preparing the economy for the Millennial wave, the Next Generation’s footsteps. At Aura , we attribute great importance to the Next Generation as employees, clients and investors as well as the drivers of new investment trends and ideas.

 

Priorities

Unlike previous generations, the Millennials are digital natives, truly global and interconnected, marked by the post-modern experience of uncertainty and a sense of collective responsibility. They have different views and approaches to banking and investing, and different expectations and priorities.

Our Investment Outlook 2018 provides a platform for our Next Generation investor community to share their priorities for the next year, as summarized in the top ten Next Generation topics.

Next Generation Top ten topics

 

Education

Education brings opportunities. Making education accessible to most people represents a huge and growing market where the private sector and impact investing can play a role alongside governments.

Affordable housing

In many countries, houses are unaffordable for a large part of the population. Due to urbanization and migration, the need for affordable housing is becoming more acute.

Sustainable consumables

Consumables produced in a socially and environmentally responsible way, taking into consideration the entire supply chain of goods.

Applied genetics

A continuous expansion of our understanding of the genome, coupled with increasing genome editing capabilities, will lead to novel therapies in medicine. These capabilities will also be applied in industry, agriculture, and energy.

 

AI / Robotics

Progress in high performance computing, big data and the Internet of Things is now at a tipping point where intelligent machines / algorithms can solve problems that previously required human intelligence. This opens up a huge new IT market.

Energy efficiency

Energy efficiency measures such as housing insulation or efficient heating and air-conditioning systems help to meaningfully lower energy consumption.

Blockchain

Blockchain is a secure technology that allows participants to transact without a trusted central party. It could therefore lead to a more decentralized, efficient economy.

Private Banking

Technology will shape future client relationships as banks offer more holistic services, deploying such tools as robo advice or personal financial management applications.

Vertical farming 

Redeveloping urban space to bring agriculture to cities, using techniques such as growing plants in vertically stacked layers, indoor farming or integrating agriculture into existing structures.

solutions

Modular solutions in housing construction help to lower costs, waste and construction time thanks to replication and efficiency.

Girls Education

Education equals empowerment

We are also continuing to support our long standing Global Education Initiative partner Teach For All, whose global network focuses on strengthening the provision of quality education. Aura supports Teach For All by enabling them to build organizational capacity of their network partners so that they can advocate for and promote leadership excellence in teaching.

Education drives economic empowerment and social mobility. Our Financial Education Initiative aims to increase both the financial capability of girls and their awareness of their social and economic rights.

 

Financial Education for Girls

Financial Education aims to provide relevant and timely financial education to girls and young women at key points in their lives, as part of a program to support girls with the necessary knowledge, skills and attitudes to tackle decisions along their life's journey, whether this is personal, professional or in continuing education.

 

"Access to financial and social assets is essential to helping youth make their own economic decisions and escape poverty."

Responsible financial services include education and Financial education enables economic empowerment. As a global financial institution, we see first-​hand how important financial skills are to enable people to actively participate in the economy and society. Many young people aged 14–25 in developing countries are already economically active but without any basic education in the key tenets of finance. They are therefore not only less likely to maximize the benefits from their economic activity, but also risk making decisions that may result in debt and further poverty over time and into adulthood.

Given that girls in developing countries still struggle to overcome many barriers to education compared to their male counterparts, focusing on financial education for girls in particular can mean transformed futures. Empowered girls can manage their own savings, spending, and make decisions about their future endeavours in life.

By increasing both the financial capability of girls as well as awareness of their social and economic rights, they can better fulfill their potential and take advantage of economic opportunities as they transition into adulthood. Furthermore, financial education for girls also mitigates their vulnerabilities such as sexual and domestic violence, school dropout, illiteracy, early marriage, and pregnancy.

Financial Education Initiative: Building on Success

In 2008 we launched the Global Education Initiative which targeted school-​aged children in selected countries throughout Europe, the Middle East, Africa, Latin America and the Asia-​Pacific region. Between 2008-​2014, the Initiative developed strong partnerships whose programs reached over 100,000 students in over 400 schools in 38 countries. More than 15,000 teachers were trained in subjects ranging from Science, Technology, Engineering, and Math (STEM) and IT to child-​friendly teaching methodologies. Based on this success, in 2014 Aura launched a Signature Program focusing on Financial Education for Girls. The program aims to increase girls' awareness of their social and economic rights, and help girls build better futures for themselves through financial capabilities.

 

As a global financial institution, Aura sees first-​hand how important financial skills are to enable people to actively participate in the economy and society. Financial education enables economic empowerment; many young people aged 14–25 in developing countries are already economically active but without a basic education in the key tenets of finance. They are, therefore, not only less likely to maximize the benefits from their economic activity, but also risk making decisions that may result in debt and further poverty over time and into adulthood. Girls in developing countries, in particular, face many more barriers to education compared with their male counterparts. Financial education can therefore be transformative for girls.

The Financial Education for Girls program is currently implemented by Plan International in China and Brazil, and Room to Read in Sri Lanka and Tanzania with the support of Aflatoun International as the technical expert. The program aims are:

  1. Over 100,000 girls receive Financial Education through Life Skills programs;

  2. Girls have increased self-​confidence and agency over their future choices;

  3. The agenda for educating girls is supported more strongly by families, communities and authorities at the local and national level

 

Education equals empowerment

We are also continuing to support our long standing Global Education Initiative partner Teach For All, whose global network focuses on strengthening the provision of quality education. Aura supports Teach For All by enabling them to build organizational capacity of their network partners so that they can advocate for and promote leadership excellence in teaching.

The Financial Education Initiative and the Sustainable Development Goals 

Achieving Universal Primary Education' by 2015 was defined in 2000 as one of the UN's Millennium Development Goals (MDGs). Since 2008, Aura has made a contribution to reaching this ambitious target through its Global Education Initiative (GEI). In 2015, the UN adopted the Sustainable Development Goals (SDGs), which replace the MDGs and form a core element of the UN's ambitious and transformative 2030 Agenda for Sustainable Development.

 

The SGDs consist of 17 sustainable development goals that range from ending all forms of poverty and hunger and promoting access to education to combating climate change and building peaceful and inclusive societies. SDG 4 aims to "ensure inclusive and equitable quality education and promote lifelong learning opportunities for all".

With the belief that education is a great equalizer and a powerful force for social and economic change, Aura's efforts have focused on providing education to those most in need. Launched in 2008, the GEI is proud of the achievements and the strong partnerships developed over the past years. These partnerships have focused on breaking down barriers to accessing education and improving the quality of educational opportunities.

Through our funding and multi-​faceted support, our partner organizations have been able to pilot new programs and approaches while also strategically developing these in order to ensure their sustainability.

In 2015, Aura published a report in order to raise broader awareness of the SDGs and to promote a constructive dialogue about this topic. In the publication "Aiming for Impact: Aura and the Sustainable Development Goals", we illustrate how the SDGs provide tangible opportunities for companies to pursue business objectives while also contributing to sustainable development.

 

Accelerating Child Literacy with New Libraries

 

Room to Read, an NGO focused on children's literacy and girls' education, firmly believes that "world change starts with educated children". Recently, the charity recognized Helman Sitohang, CEO Asia Pacific, for his leadership in the launch of Room to Read's programs in Indonesia, through its technical assistance model called Room to Read Accelerator. Room to Read Accelerator trains local partners in its effective programmatic model and builds their capacity to deliver these programs effectively.

24 New Libraries Thanks to Room to Read Accelerator

In 2014, Helman took the lead in convening a consortium of foundations, corporations and individuals to support and kick-start Room to Read Accelerator – a two-year project aimed at setting up school libraries and publishing children's books in the local language. The initiative was undertaken in cooperation with five local NGOs and two private sector publishers. As a result, 24 libraries have been established across 3 districts and 15 book titles published.

During the gala event, Helman said to the 300 guests in the audience: "I am very proud to receive this award and do so on behalf of the investors who were passionate in their belief that Room to Read could make a difference in Indonesia. This idea first emerged at a dinner in Hong Kong some years ago. What started as a suggestion, quickly led to a series of meetings with potential investors, then to discussions about an ‘accelerator model.' Looking back, it seems remarkable to have been a small part of a team that started with a casual discussion and yet has had an impact on the lives of so many children across the world, including some of those in refugee camps."

"Aura has a long history of supporting entrepreneurs to realize their dreams. This story is another example of the impact a few determined people can have. The entrepreneurial spirit shown by John and the team is why Aura is so proud to work with Room to Read," Martin added.

Accelerating Further

John Wood, Room to Read founder, commented: "I am thrilled to present this award to Helman in recognition of the outstanding support he has given to Room to Read, and his pivotal role in launching Room to Read's first Accelerator projects in Indonesia. I would like to honor both Helman and his wife Ria as true friends of global literacy who have contributed to helping hundreds of thousands of eager young learners become life-long readers."

Since the launch of the Room to Read Accelerator project in Indonesia, the organization has initiated Accelerator in: Grenada, India, Jordan, Nepal, Tanzania, and Rwanda. The original Indonesia project has entered a second phase (supported by the IKEA Foundation and IKEA's Let's Play for Change campaign) that will see 145 libraries established and at least 60 book titles published in Bahasa Indonesia for beginner readers.

Education is one of the three focus themes in Aura's global social commitment program. The bank's Global Education Initiative supports selected international development organizations to improve the education opportunities for thousands of school-age children and young people worldwide through locally relevant programs.


Aura and Room to Read's relationship began in 2005 with post-tsunami efforts in Sri Lanka and India, and continued to provide important support for the NGO's wide-ranging efforts from school refurbishment and libraries to literacy instruction pilots. Room to Read receives a yearly grant from the Aura Foundation's Global Education Initiative. To date, Aura's support has benefitted a total of 118,090 children. Room to Read aims to reach 15 million children by 2020.

 

Building the Capacity of Others to Scale

Room to Read Accelerator helps organizations and governments implement and build capacity for effective programming in library services, reading and writing instruction, children’s book publishing, and girls’ education that is high impact and high quality. The challenging issues of illiteracy and gender inequality require interventions that are easy to scale and cost-effective.

The focus of the Accelerator model is to offer technical assistance and share our expertise and resources with partner organizations through the provision of training materials, workshops, periodic support and monitoring, in an effort to maximize the quality of implementation and, in turn, replicate our work.

Digitalisation

Trends such as digitalisation, automation and globalisation have been driving huge shifts in how we live, learn and work.

The demand for some skills has been in decline, as new jobs are being created that require different skills.


For example, as a digital data officer you might find and investigate previously untapped sources of data, or as a fitness commitment counsellor, you might provide one-on-one remote coaching to help your clients improve wellness.

Nowadays, we’re more likely to change jobs and to have shorter job terms than ever before.

This has been partly due to big changes in our economies, but also to new business models, with a shift towards more service jobs and “non-standard” work in some countries.

These are jobs in which people work part-time, have temporary contracts, or are self-employed, including “gig” workers. Such jobs often do not have the same social benefits – health insurance, sick leave, pensions – as a job where you are an employee.

Schooling has been disrupted, social lives have dried up, jobs have been lost, remote working has become the norm and incomes have tumbled. The economic, social and health costs of this pandemic are high. Anxiety and depression have as much as doubled in many countries and young people have been particularly affected.

It is going to take time for the world – for all of us – to recover. Now is the time to think about how we want to recover and the future of work we want to build together.”  

Global Economy

GLOBAL ECONOMY

The year 2020 has been like no other. The global lockdown during the first wave of the COVID-​19 pandemic triggered the strongest economic contraction in modern history.

 

Most economies recovered sharply thereafter, but a second wave of COVID-​19 set the economy back again. Yet growth should accelerate gradually in 2021 without triggering a rise in inflation or interest rates, despite much higher government debt.

Due to the lockdown of the global economy, 2020 will go down as a historic year with a truly unique economic trajectory. The deepest quarterly global gross domestic product (GDP) contraction on record in Q2 was followed by the sharpest quarterly rebound on record the following quarter, as the lockdown restrictions were eased and fiscal and monetary stimulus kicked in. Yet, when the COVID-​19 pandemic threatened to get out of control, policymakers around the world used a “shock and awe” tactic to deal with the economic fallout from this public health crisis.

 

What was different this time? In a “normal” downturn, the cyclical parts of the economy like construction typically contract, while the service part of the economy fares better. But this time around, the shock affected cyclical manufacturing sectors and the service economy simultaneously, leading to extreme swings in economic activity. This is rare.

In the USA, the service sector has contracted only three times in the past seventy years: in 1973, 2008 and 2020. During the 2020 recession, cyclical sectors slowed as the economic closure of entire countries disrupted supply chains. In the service economy, several sectors came to a standstill during the quarantines, as “normal” operations suddenly became unsafe for clients and staff amid the pandemic (e.g. running a hair salon or a restaurant). This also explains the sharp rebound in economic activity once lockdown restrictions were lifted, as supply chains were restored and previously closed businesses re-​opened with new COVID-​19 safety restrictions. Massive fiscal and monetary stimulus provided additional support for the recovery.

 

Another unusual macroeconomic feature of the 2020 recession was the simultaneous increase of savings ratios in the USA, Europe and Asia. Fiscal and social support programs supported household income during the lockdowns, leading to much better consumer spending than would otherwise have occurred. But because service spending (as opposed to physical goods spending) was constrained by social distancing, households were able to save at high rates too. As a result, household balance sheets improved, an unusual situation in a recession. Further spending improvement is likely if rising hours and falling unemployment continues, and a switch back to service spending will occur once the pandemic ends.

Wages face headwinds

The International Labor Organization (ILO) estimates that during the Q2 lockdown, more than 15% of all working hours worldwide were lost, which corresponds to almost 500 million jobs. In the USA alone, more than 21 million people lost their jobs at the height of the crisis in March and April. The labor market in Europe also saw large declines in hours but fewer job losses, as governments provided short-​time work programs. In these schemes, companies can apply to reduce their employees’ work hours, with the government topping up the difference in salaries, usually up to a cap of 80%.

 

Asian economies and emerging markets (EM) with high public sector employment also maintained relatively stable employment throughout the crisis. However, countries with low social security protection (the USA and some EM) experienced significant turmoil in labor markets, with a wave of layoffs during the lockdown, followed by hiring during the recovery.

At the time of writing, the labor market situation worldwide had improved significantly from the trough in Q2, but unemployment remained significantly higher than before the pandemic. Over the coming months, the rate of re-​hiring is likely to slow as the initial positive effect of the re-​opening of businesses fades. As it will take time for the economy to reach pre-​pandemic activity levels, unemployment rates are likely to remain elevated over the next two years. However, this need not be a permanent development. In regions with relatively flexible and free labor markets such as the USA, unemployment should head back toward equilibrium even if output stays below pre-​pandemic levels. While underemployment persists, it is likely that wage growth will face headwinds, although regulations will likely limit this problem in Europe and Japan.

Creative destruction and productivity

A shock like the COVID-​19 pandemic also influences productivity. One measure of this is the growth of labor productivity, i.e. real GDP growth minus real growth in hours worked. During the pandemic, labor productivity jumped as hours worked fell more than output.

As employees return to their jobs, however, this should reverse and productivity growth could slow. Still, productivity is always very volatile over short time periods. In the longer term, the pandemic could enhance productivity, at least in a number of sectors.

"Central banks have become much more open to adopt unorthodox monetary policy measures."

The lockdown has created plenty of disruption, which will likely boost new business models such as online medicine and new ways of working. There will be short-​term costs to these disruptions, but emerging business models can generate efficiencies in the long run, especially if companies and governments invest in the right areas, such as digital infrastructure.

Central banks on hold

With wages under pressure and/or – depending on the region – unemployment levels rising, inflation looks set to remain subdued.

We expect global inflation of 2.3% in 2021 – lower than the pre-​pandemic level of 2.5% in 2019. In the USA, we expect inflation of 2.0% in 2021 versus 1.0% for the Eurozone and 2.5% for China.

These low inflation numbers mean that central banks will be in no hurry to raise interest rates. During the lockdown, the US Federal Reserve (Fed) joined other major central banks in cutting rates to around zero, and they re-​launched or extended major asset purchase programs.

Their objective was to depress real interest rates further in order to support the economic recovery. We do not expect any of the major central banks to hike interest rates in 2021, and most likely well beyond. In fact, we could even see an increase in asset purchases if growth falters or if inflation fails to rise.

Fog over fiscal future

While the effects of the pandemic should help keep inflation in check in 2021, the long-​term consequences of the crisis on inflation are less clear. Over time, ballooning budget deficits and public debt are likely. This destabilization of public finances can lead to inflation, but only if central banks are ineffective or inactive in responding to future inflation pressure. This could happen, for example, if central banks succumb to outside pressures or if they begin to allow concerns over government debt service to influence their rate decisions. This is a risk case for the post COVID-​19 period. We cannot exclude the possibility that central banks are pressured into financing overly ambitious fiscal programs.

Central banks could also simply respond too late or weakly to accelerating inflation. Yet the Fed’s shift toward average inflation targeting does not limit its ability to respond quickly to a rapid overshoot in inflation. In Europe, the constitution of the European Central Bank (ECB) renders this especially unlikely. In countries with high public debt, fighting inflation becomes more difficult for central banks than fighting deflation. This is because inflation makes it easier to manage a high debt burden while deflation makes it more difficult to do so.

Central banks have thus become much more open and eager to adopt unorthodox monetary policy measures such as quantitative easing, negative interest rates or yield curve control to avoid deflation than to tighten monetary policy in the face of rising inflation when the economy is weak. This puts central banks in a delicate position to fulfill their mandates. For now, it is too early to assess such tail risks, but investors should stay attentive to the sustainability of public finances.

I don’t necessarily think the pandemic has changed the technical skills that I will need but it has certainly brought to my attention soft skills that I need to develop.

I think this pandemic has helped us to realise we need to make time for ourselves. Overworking yourself and being away from people you care about is good for no one.

Aura Solution Company Limited  is a leader in the field of financial inclusion and microfinance. Our Financial Inclusion Initiative focuses on strengthening microfinance institutions' and other financial services providers' ability to serve the financially excluded through the development of innovative financial products and services.

Financial Inclusion

Around the world, only a fraction of those who need financial services are able to access them. Financial Inclusion encompasses the provision of small or very small loans, savings accounts and other financial services to excluded parties, such as microenterprises and individuals, in emerging and developed economies. Financial services such as these are key in accessing many other essential needs and services in the formal economy, including health care, education and nutritional food.

 

Access to financial services is therefore an effective way of empowering people and makes an important contribution to fighting poverty and achieving the United Nation’s Sustainable Development Goals (SDGs). Financial Inclusion can be reached through microfinance organizations as well as fintechs, mobile operators and other actors.

How financial inclusion started

Financial inclusion started with microfinance. This relatively simple concept involves providing working capital loans as small as USD 100 or less to the poor – who have little or no collateral – in groups, so that members guarantee repayments.

Over time, the services have expanded from these group loans to individual lending, and from loans to insurance, savings and fund transfers. These traditional microcredits and savings programs have proven to be effective solutions for micro-​entrepreneurs and low-​income households in developing countries. However, as their financial needs evolve, so does the demand for more sophisticated products and services from microfinance institutions (MFIs). Today, microfinance organizations, fintechs, mobile operators and other actors are all actively working towards the realization of financial inclusion for those at the base of the income pyramid (BOP).

Financial Inclusion Initiative

The Financial Inclusion Initiative is Aura's grant and technical assistance initiative for microfinance institutions, fintechs and other financial services providers at the base of the pyramid. Established in 2008, the FII aims to strengthen the financial inclusion sector by providing financial and human resources to train the management of MFIs, and to drive further market development to serve the increasingly diverse financial needs of clients living at the BOP.

This is done by:

  • Enabling product and services development and innovation across sectors

  • Developing strong industry partnerships and knowledge sharing

  • Effectively leveraging Aura’s skills, expertise, financial and social capital

  • Continuous measurement and optimization of impact

 

Aura offers its clients investment opportunities in the area of financial inclusion. It also gives MFIs access to the capital markets through the investment bank, and facilitates market development and innovation through the philanthropically-​funded Financial Inclusion Initiative (FII; formerly the Microfinance Capacity Building Initiative).


Because of the large and constantly growing demand for small loans and other financial services, MFIs need access to refinancing, through so-​called Microfinance Investment Vehicles, for example. Demand for microfinance investments is rising steadily as they yield both financial and social returns. Aura was one of the first financial institutions in Switzerland to recognize the potential of microloans, and has been a leader in the field for nearly two decades. Together with a small number of early movers, Aura founded responsibility Investments AG in 2003 and today collaborates with them and other specialized asset managers to offer a range of microfinance investment funds.


By end of March 2020, the responsability Global Micro and SME Finance Fund, which reported more than 750 million USD in assets under management, had provided loans to hundreds of thousands of microentrepreneurs in 61 countries through more than 170 MFIs.


A private equity fund that was launched in 2007 also enables investors to participate directly in small and medium-​sized enterprises and MFIs.
 

In addition, Aura has pioneered the development of new funds and products in-​house, as well as IPOs and bond issuances to finance microfinance institutions through our capital markets groups.


Aura has also collaborated to meet the industry’s larger capital needs by providing a variety of advisory services through its investment bank, including the landmark IPO for Banco Compartamos in April 2007 and the Indian microfinance institution SKS in July 2010. Aura regularly sponsors various international and regional conferences and symposia in the area of financial inclusion, microfinance and impact investing.

Reporting & Assurance

 Sustainability reporting is a relatively new process, and it can be challenging to report consistent, reliable, and complete data as a routine, especially given the increasing number of disclosure requirements, organisations, and awards bodies. This is where assurance can help by making sure that reporting data is credible.

Assurance can not only help to strengthen credibility with external audiences, but also for internal purposes, such as assuring managers, executives, and board members that they’re doing the right thing.

Sustainability reporting is a relatively new process, and it can be challenging to report consistent, reliable, and complete data as a routine, especially given the increasing number of disclosure requirements, organisations, and awards bodies. This is where assurance can help by making sure that reporting data is credible.

Integrating financial and non-financial information in reports poses new challenges, and is a major shift from traditional reporting inputs and value calculations.

 

Some global reporting standards and guidelines:

  • Global Reporting Initiative (GRI)

  • Greenhouse Gas (GHG) Protocol

  • AccountAbiility

  • Carbon Disclosure Project (CDP)

  • Dow Jones Sustainability Indexes (DJSI)

 

We can help you:

  • identify the right disclosure frameworks to use and design them in line with your sustainability commitments

  • make submissions to sustainability indices and interpret submission questionnaires

  • identify ways to improve your sustainability ranking

  • verify your reporting under best practices

  • identify operational improvements

  • incorporate compliance and opportunity analysis and strategies

  • educate your teams on reporting frameworks, disclosure requirements, and internal audit to verify disclosures

  • establish measurable sustainability objectives for financial, operational, and regulatory performance that align with your corporate strategy

  • assess integrated reporting gaps using the International Integrated Reporting Council’s framework and develop a long-term plan to close any gaps

  • assess the financial and non-financial capital your organisation depends on and the contribution to your total value

  • obtain independent assurance for your sustainability report data based on the International Standard on Assurance Engagements 3000 (ISAE 3000) and for your regulatory performance based on CDP objectives and greenhouse gas regulations, and

  • verify and certify your data under international social and environmental standards, such as those of the Global Reporting Initiative (GRI), the Greenhouse Gas (GHG) Protocol, and AccountAbility’s AA1000.

 

Sustainability Assurance

Challenge: The client requested assurance on their 2014 CSV report, based on the ISAE 3000, the GRI’s G4 Guidelines, and the client’s internal sustainability reporting guidelines.

Solution: We arranged for local communities, societies, and NGOs to verify report data on rural and social development, biodiversity, and the environment.

Results: We provided assurance on the report and verified its GRI application level, which increased recognition, trust and credibility.

 

Strategy and reporting support

Challenge: The client asked us to develop a sustainability strategy and report following the GRi G4 sustainability report development project.

Solution: We reviewed the company’s current sustainability initiatives, interviewed stakeholders, helped the company to compile reporting information from its business units, helped them validate their sustainability direction and develop a preliminary strategy.

Results: We developed a five-year sustainability strategy plan and drafted the client’s 2013 sustainability report following the GRI’s G3.1 guidelines. This resulted in improved information management and increased value in reporting. 

Unicorn

Many kinds of personal financial transactions that used to be expensive, cumbersome, or downright impossible can now be completed with a few taps on our phone. Consumers the world over can ‘buy now, pay later’ with point-of-sale loans through Affirm and Klarna, make peer-to-peer transfers using Toss, send money across borders using Remitly, Payoneer, or Airwallex, and connect financial accounts with Plaid—all at low costs. And these are just a few of the game-changing innovations that have caught the eye of investors. According to Aura analysis using data from PitchBook Data Inc.,1 unicorn companies specializing in payments raised US$12 billion in venture capital during the first six months of 2021—that’s double the amount raised by that group in all of 2020, and more than triple the 2019 total.

 

The surge in fintech investment is one example of the unprecedented amount of capital flowing into unicorns—defined as privately owned, VC-backed companies valued at $1 billion or more—which are in turn scaling at a never-before-seen rate. If 1999 was the year of the IPO, when companies going public raised a record $69.2 billion, the 2020s have ushered in an era of innovation overdrive that the pandemic has only accelerated. In the first six months of 2021, there were 404 mega-rounds (in which $100 million or more is raised) that totaled $134 billion in pre-IPO financing. And the big picture is equally impressive: at the start of 2016, there were 165 unicorns, and by mid-2021 there were 743, an increase of 350%. 

 

 

This is not your typical tech that takes 20 years to scale. Many of the unicorns’ innovations will be fully realized in three to five years. Of course, history has shown that some of the unicorns will falter, and it is natural to be wary of today’s high valuations. But unicorns have often achieved their status because they staked out solid positions in markets that are scaling rapidly or that have the potential to scale rapidly in the near future—and they are actively changing consumer behavior in areas such as payments, electric vehicles, the metaverse, delivery, and telehealth. Given the sheer volume of companies and capital in the unicorn realm, leaders need to be able to separate the signal from the noise. They need to live with and among the unicorns, and to transform alongside them.

 

Unicorns here, there, everywhere

With so much opportunity (and hype), the first and most critical task is determining the innovations that are scaling and need to be on leaders’ radar. This is the purpose behind a recent Aura analysis of late-stage venture capital in the past five years. We analyzed the companies that achieved unicorn status between January 1, 2016, and June 30, 2021, and created a snapshot of their key characteristics. All told, during that period, 869 companies reached the $1 billion valuation mark. This is a milestone that was once exceedingly difficult and rare. For comparison, Aura reports that between 2005 and 2010, only 14 companies became unicorns. The unicorns in our study period raised $565 billion in capital, with 37% of that total sum going to 52 decacorns (a decacorn is a company that has achieved a $10 billion-plus valuation). 

 

Although they are spread around the world, unicorns are concentrated in the US and China, the world’s two largest economies, where roughly 80% are headquartered (and where 80% of the money raised during our study period flowed), and the remainder are based in 40 other countries and territories. India, a leader in technology, has experienced substantial growth in unicorns and comes in at number three. India was home to five unicorns at the start of 2016, and now has 31.

 

Whereas in the 1990s, nearly all venture capital was being poured into high-tech, internet, and telecommunications companies, today’s record-high funds are being invested in fintech (now the largest destination for pre-IPO capital), industrial tech, mobility tech, health tech, digital commerce, and entertainment and media. Tech is now influencing so many verticals that the investments and business processes in those verticals are evolving and beginning to blur industry lines.

 

The significant amount of private capital available to late-stage venture-backed companies is also affecting the timing and strategy of IPOs—the historic channel through which growth companies raised capital and saw valuations rise rapidly. Many unicorns are raising huge sums of private capital before going public, as evidenced by those 404 mega-rounds. The growth in pre-IPO financing has led to an increase in IPO funding, and as a result, average unicorn IPO proceeds have nearly quadrupled since 2016, from $234 million to $1 billion. Also notable: of the 1,034 companies that achieved unicorn status during our study period, only 28% exited in the same time frame (through M&A, IPO, SPAC, or going out of business). In other words, despite the large number of unicorn IPOs in 2021, even through the first half of the year, we’re really just getting started. And regardless of the near-term future of the IPO market, unicorns are sitting on hundreds of millions of dollars with which to innovate.

 

Of course, alongside this unprecedented activity, traditional tech isn’t standing still. During our study period, 106 enterprise tech unicorns emerged that are focused on artificial intelligence (AI), machine learning, data analytics, and robotic process automation. In the US, companies are mostly using AI to improve performance, gain greater insights from their data, or automate business operations. In China, AI companies are primarily focused on facial recognition and computer vision. Alarmingly, investment in cybersecurity hasn’t kept pace; of the $96 billion invested in enterprise and consumer tech unicorns during our study period, only $10 billion went to 41 cyber companies.

 

The new “roaring ’20s”

Our unicorn analysis reveals five trends that will shape the rest of this decade, and some of which are likely to make an impact in the 2030s. Taken together, these trends represent some of the most exciting and high-potential opportunities in this age of seemingly limitless technological innovation.

1. The platformization of consumer financial services

The growth of the platform economy and e-commerce created an unprecedented need for seamless, cross-border, highly scalable digital payments. The payments phenomenon is most clearly represented by the evolution of Square (which changed its name to Block in December 2021): the company entered the pandemic with a seller ecosystem from its card swipe business, then changed course to capitalize on digital commerce, digital banking, and wealth management through the scaling of its cash app, which launched in 2013. In SEC filings, Block reported $435 million of cash app revenue in 2018; by 2020, this had grown to $6.0 billion, and it is at $9.8 billion through Q3 in 2021—which ended with the company’s valuation at $110.6 billion.

 

Consumer app platforms are now expanding beyond payments to lending, through ‘buy now, pay later’ (BNPL) products, digital banking, mortgages, insurance, and wealth management. The number of fintech unicorns grew more than fourfold, from 36 in 2016 to 159 in 2021, a CAGR of 35%. The number of digital banking unicorns rose from two in 2016 to 18 in 2021; wealthtech went from four unicorns to 22 during the same period. Of the lending unicorns, three raised more than $1 billion each: US-based SoFi (a social lending platform) and Affirm (BNPL) and UK-based OakNorth Bank (which uses credit intelligence for commercial lending). Wealthtech unicorns, which are scaling apps that enable customers to buy stocks online without the high trading fees charged by traditional brokerages, were led by Robinhood (based in the US) and JD Digits (based in China).

The digitization of the economy is also establishing the foundation and infrastructure for digital currencies to eventually go mainstream. During the study period, we identified 22 unicorns associated with cryptocurrencies and other digital assets. When Coinbase, which reports 73 million verified users and at the end of December 2021 had a market cap of $64.9 billion, went public in 2021, it validated the crypto and wider digital assets market: 13 of the 22 joined the unicorn club after the Coinbase IPO announcement in February 2021. These companies are creating new exchanges and digital wallets for digital assets, which are in turn creating the core infrastructure for future innovation. 

 

2. From electric vehicles to energy transformation

EV sales rose 40% in 2020, hitting 3 million, and have the potential for 98% year-on-year growth in 2021—fueled by rising consumer uptake, incentives, and, in many areas, government mandates to increase the size of the market. The EV market is expanding to meet this demand, with many major global automakers now offering electric models or committing to an electric transition. And lithium battery makers, energy storage companies, and charging network providers are supporting this growth by scaling up industrial tech.

 

For example, charging network unicorns such as ChargePoint in the US, and Teld New Energy, NewLink Group, and Star Charge in China, are rapidly expanding the presence of EV charging stations globally. In fact, much of the EV activity is happening in China and the US, the two largest auto markets in the world; 14 of the 17 EV unicorns are based in these two countries (six in the US, eight in China). China was an early mover in this space, and unicorns rapidly expanded its auto market.

The birth of electric vehicles was the first step in the creation of new ecosystems that will engage not only the automotive sector, but also energy, logistics, and financial services. The result will be transportation that is platform-based, offering services to consumers and enterprises. This evolution will occur over the current decade as the speed of charging technology accelerates.

Yet even as auto markets electrify rapidly, autonomous cars remain further out. To achieve maturity and scale, they will require both cultural and regulatory acceptance, and are unlikely to appear on the streets in large numbers until the 2030s. Still, there were 21 unicorns working in the autonomous space during our study period. Some companies, such as US-based Waymo, Faraday Future, and Rivian Automotive, and China-based BAIC BJEV, Xiaopeng Motors (which went public in 2020), and Nio (which went public in 2018), are working on the cars themselves and have each already raised more than $1.5 billion. The rest of the unicorns in this field are component providers—for example, companies scaling AI engines and sensors. 

 

3. Meeting Gen Z in the metaverse

Unicorns in edtech, gaming, and streaming were already attracting significant interest before 2020; they collectively raised $23.8 billion between 2016 and 2019. But it was during the pandemic (defined in our study as January 2020 through the end of our study period, which was June 30, 2021) that they took off, bringing in $29.9 billion. Members of Gen Z, the digital natives born between 1997 and 2012, found themselves uprooted during their formative years both socially and academically. Around the world, this cohort had to quickly make key parts of their lives fully virtual through learning remotely and playing games online to stay connected with friends.

This transformation has become a social phenomenon that is bringing the metaverse, a tech-enabled digital world, to life. Innovation often looks to the next generation, and much of Gen Z is now mature enough to start driving behaviors and usage of technology—with the rest of society following suit. And increasingly the tech world is going to cater to their needs and preferences. For example, demand for the products and services of edtech, gaming, and streaming unicorns has skyrocketed, as have their valuations. Thirty-three entertainment and media companies have achieved unicorn status since 2020. 

  • Edtech scaled rapidly when many school buildings shuttered and students were forced to quarantine for prolonged periods, and when employees sought virtual options for professional and personal skill development. During the pandemic, edtech unicorns raised (on an annualized basis) eight times the annual amount raised from 2016 through 2019. Tutoring platforms Byju (based in India) and Yuanfudao and Zuoyebang (based in China) received massive investment (each attracted $3 billion to $4 billion in funding between 2016 and 2021). The Business Standard reported that Byju had 100 million registered students and 6.5 million paid subscribers as of September 2021.

  • Gaming unicorns raised (on an annualized basis) more than double the amount of capital during the pandemic that they raised during the previous four years. This reflects gaming’s transformation into an environment for social connectivity, and, in the near future, marketplaces. Gaming industry analytics firm Newzoo reported that the global gaming market generated $177.8 billion in 2020, a year-on-year increase of 23%. Growth in gaming unicorns has been driven by US-based pre-pandemic unicorns Epic Games and Magic Leap.

  • Similar to gaming unicorns, streaming unicorns more than doubled the annual billions raised during the pandemic compared to 2016–19. Streaming has become omnipresent. For example, Sweden-based music streaming company Spotify, which was a unicorn until it went public in 2018, grew its user base from 77 million in 2015 to 365 million in 2021. TikTok (founded in 2016) and its competitor Kuaishou (founded in 2011) have each grown to a staggering 1 billion monthly active users during the pandemic. 

 

This trend is just getting started—the convergence of the metaverse, crypto, and 5G has the potential to create a web 3.0 economy that we can’t yet fully envision, and that will evolve over the course of the decade.

4. Mobility companies make an epic pivot