PEOPLE SUSTAINABILITY

People Sustainability: How About the "S" in ESG? | Mercer (2021) | A groundbreaking framework that redefines the social dimension of ESG, proposing a comprehensive model based on core dimensions.

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✨ OVERVIEW

Mercer's report addresses the often-neglected social dimension of corporate sustainability by introducing People Sustainability as a distinct discipline beyond current ESG social metrics. Based on four core dimensions—Employment Foundation, Health, Wealth, and Development—the model follows Maslow's hierarchy to acknowledge human development progression within organisations. The framework provides a moral foundation and business rationale for treating employees sustainably, arguing that People Sustainability is a precondition for environmental sustainability.

🧩 CONTEXT

Stakeholder pressure on the social side of sustainability has intensified with movements like Black Lives Matter and Me Too demanding social justice. At the same time, investors scrutinise organisations through increasingly thorough ESG methodologies. Despite recent prosperity, we face alarming side effects: resource scarcity, environmental degradation, and widening wealth gaps. The pandemic has further exposed social imbalances and corporate malpractices. While sustainability has gained prominence, many organisations have missed making far-reaching changes, keeping sustainability as mere "lipstick on the pig."

🔍 WHY IT MATTERS

↳ People Sustainability enables environmental sustainability—People need decent living standards to support environmental initiatives. The report states, "Employees can only implement environmental sustainability in their business and private activities if they feel physically and mentally secure throughout the entire corporate ecosystem." Without addressing basic needs like appropriate pay and job security, environmental sustainability becomes a luxury good that many will neglect when facing trade-offs.

↳ Social metrics are underdeveloped in ESG frameworks—While environmental metrics receive significant attention, "the social metrics component has been neglected in the discourse to date." Organisations urgently need "objective and reliable metrics which can inform investors and analysts on People Sustainability performance," particularly as ESG ratings become significantly more important in investment decisions.

↳ Poor people practices create a destructive business cycle—Research by MIT Professor Zeynep Ton "impressively demonstrates the vicious circle of lacking People Sustainability: Paying low salaries, low job security and low predictability lead to operational barriers, profits decrease, which in turn lead to cuts in labour costs." Conversely, "the creation of good jobs, coupled with strong operational excellence, creates genuine efficiency gains and promotes competitiveness."

💡 KEY INSIGHTS

↳ The model addresses progressive human needs—Following Maslow's pyramid approach, the model acknowledges "the mechanisms of human progress." Beginning with the Employment Foundation (respecting "universal human rights, the basic need for a job and associated job security"), it advances through Health (where "both the psychological and physical dimensions must be actively shaped") to Wealth (providing for "earning a decent life including retirement"), culminating in Development (responding to "the need of employees to thrive – both in their professional and their social life").

↳ Sustainability transformation requires core business changes—True corporate responsibility means sustainability must be "consistently embedded in the corporate strategy." This transformational process places "sustainability at the heart of the company" and focuses on "every employee and the corporate mindset to achieve a long-term impact." Business models, organisational structures, and incentive systems must all "be aligned and driven down to the sustainable direction and actions of employees."

↳ Short-term costs yield long-term benefits—Organizations must recognise that "investments in People Sustainability can initially mean higher expenses and even short-term losses" that "may affect short-term quarterly figures or dividends." However, "recent examples (e.g. in the tech sector) show that long-term oriented investments pay off, as long as the losses are considered temporary and the long-term effects outweigh them."

🚀 ACTIONS FOR LEADERS

↳ Transform from superficial to core sustainability—Move beyond what the report calls "lipstick on the pig" approaches by embedding sustainability "at the heart of the company." This requires "acknowledging responsibility for the greater good" and creating a "corporate purpose [that] must balance interests of all stakeholders, putting sustainability at the centre of the organisation's maxims of action and way of thinking." The first steps include anchoring sustainability in "fundamental principles of the company (such as corporate values, leadership principles)."

↳ Implement the People Sustainability dimensions systematically—Start with Employment Foundation by granting "universal working conditions following basic human rights" where "job security is an integral part." Then address Health through initiatives supporting "sustainable care of health and wellbeing," advance to Wealth by providing "broad benefits and pay for a sustainable life," and finally emphasise Development through "extensive development opportunities" for professional and personal growth.

↳ Develop concrete sustainability metrics—Create "reliable indicators of the extent to which companies are shaping their corporate responsibility." This will provide "orientation and transparency to ensure sustainable change" while giving "investors and customers transparent and objective information" about your People Sustainability maturity. The coming People Sustainability Index will "provide orientation on strengths and weaknesses as well as key levers and fields of action."

🔗 CONCLUSION

The People Sustainability Model offers organisations a framework to transform the "S" in ESG from an afterthought to a driver of sustainable business. As social movements demand justice and investors scrutinise corporate practices through "thorough ESG rating methodologies," companies must "rethink how they manage their social footprint." This approach recognises that sustainability begins with people, who are both means and beneficiaries of sustainable practices. The model positions People Sustainability as a "precondition for environmental sustainability" while acknowledging its business benefits, as research shows "a strong positive correlation of sustainable people management and long-term company performance." When properly implemented, this model helps organisations move beyond what the report calls "far-reaching changes [that] have been missed, [where] sustainability has too often remained 'lipstick on the pig.'"

🎯 KEY TAKEAWAY

People Sustainability is not merely a social obligation but an essential business foundation—treating employees responsibly through the four dimensions of Employment Foundation, Health, Wealth, and Development creates the necessary conditions for both environmental sustainability and long-term business success, transforming organisations from merely appearing sustainable to being "sustainable at the core."

UNLEASH HR SUCCESS

A New Operating Model for People Management: More Personal, More Tech, More Human | McKinsey & Company (2025) | Research reveals how organisations can transform HR into a strategic, data-driven function that personalises experiences while enhancing human connection.

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✨ OVERVIEW

Drawing on insights from over 100 experts, McKinsey's research outlines how tomorrow's people function will leverage technology to deliver personalised employee experiences while freeing HR professionals to focus on strategic value creation. The report introduces a "strategic triumvirate" model replacing traditional HR structures with three key roles: people strategists, scientists, and technologists. Organisations implementing this approach are seeing measurable improvements in people's development and financial performance, with top performers four times more likely to outperform competitors financially.

🧩 CONTEXT

The workplace is experiencing unprecedented disruption. Generative AI has caused more changes to people operations in the past year than the previous decade combined. Simultaneously, employees increasingly expect the same personalisation at work that they experience as consumers. Despite these shifts, only 5% of organisations have successfully incorporated new technologies into their people functions. This implementation gap—with 70% still planning and 25% in early scaling—creates a competitive advantage opportunity for early adopters.

🔍 WHY IT MATTERS

↳ Technology enables truly personalised employee experiences—Just as streaming services recommend personalised content, organisations can now offer tailored development paths based on individual skills, aspirations, and learning styles. A telecommunications company demonstrated this by creating an AI-powered coaching engine that analyses call centre conversations to deliver personalised learning recommendations, resulting in a 17% improvement in customer satisfaction scores.

↳ Fluid talent deployment replaces rigid structures—Traditional hierarchies and career ladders give way to skill-based talent marketplaces. McKinsey found that organisations lose value because 80% of role moves involve changing employers rather than internal mobility. Advanced internal talent exchanges now match employees to opportunities based on skills rather than titles, enabling organisations to adapt rapidly to changing business needs.

↳ HR transforms from cost centre to value driver—Only 20% of today's strategic HR activities will remain unchanged as automation reshapes the function. This shift allows HR to focus on organisational effectiveness rather than administration. One Asian ride-hailing provider has already deployed personal agents to automate mid-skill HR tasks like compensation assessments and regulatory updates, freeing HR professionals to drive strategic initiatives.

💡 KEY INSIGHTS

↳ The "strategic triumvirate" creates a new HR architecture—Future HR will comprise people strategists (senior coaches who translate business strategy into people priorities), people scientists (subject matter experts who design evidence-based interventions), and people technologists (data scientists who build the technology backbone). This structure replaces the traditional three-box model with a more dynamic, expertise-driven approach.

↳ Technology enables managers to be more human—As economist Andrew J. Scott notes, "As machines get better at being machines, humans have to get better at being more human." When technology handles routine tasks, managers can focus on providing the empathy and judgment employees crave. HR's role shifts to equipping managers with the tools and insights to excel at these uniquely human elements.

↳ Integrated data ecosystems replace fragmented systems—Organisations need a unified data lake and streamlined technology stack instead of disconnected HR applications. McKinsey developed "Lilli," an AI platform serving as a centralised knowledge hub that enhances productivity by facilitating access to information and providing customised resources that improve employee experience.

🚀 ACTIONS FOR LEADERS

↳ Begin with a targeted value assessment—Identify one high-priority people challenge (retention, skills gaps, or leadership pipeline) where technology could create measurable value. Calculate the business impact and use this to build your transformation business case, focusing on outcomes rather than HR process improvements.

↳ Form a cross-functional "People Tech" team—Assemble senior representatives from HR, IT, finance, and key business units to govern your transformation. Ensure the team has decision rights over technology investments and process redesign to avoid siloed implementation.

↳ Start with employee experience quick wins—Deploy one technology solution that directly improves employee experience visibly. Organisations often begin with AI-enhanced learning recommendations or chatbots that answer HR policy questions, establishing proof points before tackling more complex transformations.

🔗 CONCLUSION

The future of people management transcends simply automating existing processes—it reimagines how organisations attract, develop, and retain talent. Leading companies are already creating competitive advantage through this transformation. McKinsey's research provides a roadmap for organisations at every stage: "strategists" defining their vision (70%), "scalers" building capabilities (25%), and "visionaries" implementing fully AI-powered operating models (5%). By combining technology's analytical power with human interpersonal strengths, organisations can create workplaces that are simultaneously more efficient and more engaging.

🎯 KEY TAKEAWAY

Future HR success depends on balancing seemingly opposing forces: technology that personalises experiences at scale alongside enhanced human connection, fluid talent deployment with stable capability building, and automated processes with strategic insight—creating an HR function that delivers better experiences and better business results.

UNLEASH LEADERSHIP SUCCESS

The Top 20 Leadership Challenges | Center for Creative Leadership (2024) | Research from over 48,000 leaders identifies the exact challenges preventing leadership success at every organisational level, revealing dramatic post-pandemic shifts and providing targeted strategies to unlock leadership potential.

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✨ OVERVIEW

This comprehensive research from the Centre for Creative Leadership examines data from over 48,000 leaders across 7,000 organisations globally to identify the most common leadership challenges faced at different organisational levels. Using AI-powered language processing to analyse responses, the study identifies and ranks the top leadership challenges faced by frontline managers, mid-level managers, senior leaders, and executives in the post-pandemic era. The research reveals how these challenges have evolved since COVID-19 and provides practical recommendations for addressing them. By understanding these common challenges, organisations can design more effective development initiatives that build critical leadership capabilities and strengthen their talent pipeline.

🧩 CONTEXT

Leadership challenges are universal—anyone guiding a group toward shared results encounters obstacles. However, these challenges differ significantly depending on leadership level and have transformed since the pandemic. The Centre for Creative Leadership has researched leadership issues for decades to stay current with evolving challenges. Using anonymised data from 360 assessments, their research team examined what thousands of leaders identified as their most critical leadership challenges. This comprehensive analysis revealed consistent patterns across industries and geographical regions, creating a framework for understanding leadership development needs in the post-pandemic workplace.

🔍 WHY IT MATTERS

↳ Different leadership levels face distinct challenges— The research shows that challenges vary significantly based on a leader's position in the organisational hierarchy. Frontline managers struggle most with people management and operational issues, mid-level managers battle personal limitations and business challenges, senior leaders face credibility and strategic growth concerns, and executives must navigate dynamic business environments whilst developing organisational strategy. Understanding these level-specific challenges allows organisations to tailor development programmes accordingly.

↳ The pandemic shifted leadership priorities— The research reveals significant shifts in leadership challenges since COVID-19. For senior leaders, limited self-awareness was once the top challenge but has declined significantly, whilst overcoming credibility gaps has become more pressing. For executives, navigating dynamic business environments experienced the most significant increase in frequency—a clear reflection of pandemic-induced volatility and uncertainty.

↳ Leadership issues fall into three core themes— Across all leadership levels, challenges clustered around personal growth limitations, managing people whilst delivering results, and navigating organisational complexity. These themes provide a framework for designing development programmes that address fundamental leadership needs regardless of specific roles or industries.

💡 KEY INSIGHTS

↳ Frontline managers struggle most with people and time management— The top challenge for those in supervisory roles is feeling overwhelmed with inefficiencies and frustrated with others. This includes difficulties with guiding direct reports, overcoming resistance to change, managing difficult employees, and adapting communication styles—challenges that have only intensified since the pandemic.

↳ Mid-level managers battle impostor syndrome and personal limitations— Leaders in the middle struggle with doubts about their abilities and readiness to lead—as well as overcoming the doubts of others. With post-pandemic remote and hybrid workplaces creating new leadership cultures, overcoming these personal limitations to make an impact has become even more challenging, with significantly more mid-level managers reporting this issue since the pandemic.

↳ Senior leaders must bridge credibility gaps—Building credibility as an organisational leader has become more pressing for senior leaders post-pandemic. This includes gaining stakeholder trust, enhancing organisational visibility, and strengthening leadership presence. Before COVID, limited self-awareness was their most frequent challenge, but the frequency of this issue has dropped significantly while credibility concerns have risen.

↳ Executives face increasingly dynamic business environments— For C-level leaders, navigating rapid business changes topped their list, experiencing the most significant rise following the pandemic. This challenge involves responding to new regulations, changing market conditions, and evolving competitive landscapes whilst maintaining the talent needed to support continuous change and organisational adaptation.

↳ Collaboration challenges persist across all levels— From frontline managers dealing with team performance to executives influencing organisation-wide cooperation, the ability to build effective collaborative relationships emerged as a consistent theme across all leadership levels.

🚀 ACTIONS FOR LEADERS

↳ Maximise your unique personal value— Recognise your characteristics, behaviours, and habits to identify what may be triggering challenges in your career. Focus on increasing self-awareness and strengthening specific skills. Understand your unique strengths and weaknesses to improve your leadership brand and overcome internal challenges like lack of confidence, fear of failure, and struggle with conflict management.

↳ Master the art of effective delegation— To manage both people and tasks successfully, implement a four-step delegation cycle: 1) Understand your preferences about workload prioritisation and feedback requirements; 2) Know your people's capabilities and development needs; 3) Communicate the purpose behind tasks to give them meaning; and 4) Establish collaborative assessment and reward systems to evaluate task completion properly.

↳ Build boundary-spanning capabilities— To navigate organisational complexity, improve your ability to work across traditional boundaries. Create and lead high-performing teams using a four-component framework: establish a core purpose that all members understand; foster a collective mindset where roles and responsibilities are clear; develop cohesive relationships through psychological safety; and enhance connections across organisational boundaries to drive innovation and collaboration.

🔗 CONCLUSION

The Centre for Creative Leadership's research into the top 20 leadership challenges provides valuable insights for developing more effective leaders at every organisational level. Organisations can design more targeted development initiatives by understanding how these challenges vary by leadership position and how they've evolved since the pandemic. The research reveals that regardless of level, leadership challenges generally fall into three themes: personal growth limitations, managing people whilst delivering results, and navigating organisational complexity. Addressing these fundamental challenges through specific development approaches like maximising personal value, improving delegation skills, and building boundary-spanning capabilities can significantly enhance leadership effectiveness across the organisation.

🎯 KEY TAKEAWAY

Leadership development is most effective when it addresses the fundamental challenges leaders face at their specific organisational level, which requires understanding both the universal aspects of leadership and the unique pressures experienced at different stages of leadership responsibility.

UNLEASH WORKFORCE SUCCESS

🚀 UNLEASH WORKFORCE SUCCESS | Reaching for Stars: What You Need to Know about Exceptional Talent | Talent Strategy Group (2025) | Discover how rare "star" performers can deliver 5 to 50 times more value, transforming organisational potential through extraordinary output and unique capabilities.

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✨ OVERVIEW

Stars have outstanding performance and high visibility within and outside their organisations. They produce exceptional output more quickly than others, shattering traditional performance curves and delivering extraordinary results across various sectors.

🧩 CONTEXT

Traditional performance management approaches fail to capture the true potential of exceptional performers. Most organisations operate under a bell curve assumption, overlooking the rare individuals who can fundamentally transform organisational performance.

🔍 WHY IT MATTERS

Understanding star performers is critical for organisational success:

↳ Extraordinary Output—Stars produce exceptional output 5 to 50 times higher than average performers, particularly in roles with significant creative freedom.

↳ Performance Variability—High performers are already 50% more productive in blue-collar and manufacturing roles, potentially 200% to 400% better performers.

↳ Future Potential—As technology advances, the potential for stars to multiply their output becomes even more significant, though current research is still emerging.

💡 KEY INSIGHTS

↳ Performance Beyond Normality—Stars exist at the far end of the performance curve, contributing disproportionately large value compared to their peers.

↳ Visibility Matters—Stars are distinguished by their high visibility in business, social media, articles, speeches, and other public-facing communications.

↳ Portability of Talent—Research shows that star performers' performance can decline when changing organisations, suggesting their success combines individual capabilities and organisational context.

🚀 ACTIONS FOR LEADERS

↳ Critical Role Placement—Place high performers in critical roles where performance is linearly related to results.

↳ Compensation Consideration—Develop compensation strategies that recognise the extraordinary value stars bring to an organisation.

↳ Network Development—Understand that stars with strong networks generate more patents and higher-quality innovations.

🔗 CONCLUSION

Stars are rare, highly contributing individuals whose performance can help lift an entire organisation to new levels. Understanding their unique characteristics is crucial for strategic talent management.

🎯 KEY TAKEAWAY

Exceptional talent is not just about individual brilliance but creating an ecosystem that identifies and nurtures extraordinary performers.

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