The Message Behind the Demise of Aon Hewitt Canada’s Rewards Practice

Aon Hewitt has laid-off its reward consultants in Canada while retaining other parts of its HR consulting practice.

While this sort of thing is common in business, it comes as something of a shock to the Canadian HR community where Hewitt was long seen not just as one of the biggest consultancies but also one of the nicest.

There are, no doubt, many particulars around the decision, however perhaps the main takeaway is that consulting can be a tough business even when you are well established.

While the HR community ponders the fate of Hewitt’s rewards practice, the Canadian legal community puzzles over the demise of Heenan Blaikie, a leading player in Canadian legal services for 40 years, now in the process of winding down operations. Another high-profile case is Michael Porter’s strategy consultancy the Monitor Group, which went bankrupt just over a year ago.

No one is safe in a changing competitive landscape.

Tech and the changing world of consulting

The technology angle on the Aon Hewitt story may be that these days companies would rather spend their HR budget on reward software rather than reward consultants. It is not that software replaces consultants, just that the software is new and what consultants are offering has not changed much in the past decade.

The consulting business is not what it once was. Years ago, HR managers had time but lacked expertise. Now, they are likely to have the expertise but no time.

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That makes for a different kind of consulting intervention. Consulting firms also find developing talent more difficult, in the old days they could bill out juniors at profitable rates while developing them into capable consultants. Now companies resist paying consulting rates for inexperienced talent.

In the case of Hewitt, being acquired by Aon in 2010 probably did not help. The world of a big corporate may not sit well with the odd world of consultancy.

When advertising giant Saatchi & Saatchi acquired Hay Management Consultants in 1984 they were horrified to find that the consultancy was, on paper, always just a few months from bankruptcy.

HR consultancies typically go from project to project, busy today, and hopefully busy tomorrow, but with no revenue firmly book more than a few months ahead. Eventually Hay broke free, taking with them the brilliant McBer team which changed the face of HR with the idea of competencies.

What’s interesting

  • A deep pocketed, well-established brand with a good reputation is still no guarantee of success in today’s world of HR consultancy.
  • The excitement in HR is now driven by new technology from vendors rather than new ideas from consultants.

Where the real value is

  • Recognizing how the world of consulting is constantly changing and models that worked in the past may not work in the present.
  • Pondering how the pressures on consultancies are a direct reflection of changes inside companies. It is worth reflecting on how the needs and capabilities of your HR function have changed in the past decade. How has that affected your use of consultants?

David Creelman, CEO of Creelman Research, is a globally recognized thinker on people analytics and talent management. Some of his more interesting projects included:

  • Conducted workshops around the world on the practical aspects of people analytics
  • Took business leaders from Japan’s Recruit Co. on a tour of US tech companies (Recruit eventually bought Indeed.com for $1 billion)
  • Studied the relationship between Boards and HR (won Walker Award)
  • Spoke at the World Bank in Paris on HR reporting
  • Co-authored Lead the Work: Navigating a world beyond employment with John Boudreau and Ravin Jesuthasan. The book was endorsed by the CHROs of IBM, LinkedIn and Starbucks.
  • Worked with Dr. Wanda Wallace on “Leading when you are not the expert” which topped the “Most Popular List” on the Harvard Business Review’s blog.
  • Worked with Dr. Henry Mintzberg on peer coaching, David’s learning modules are among the most popular topics.

Currently David is helping organizations to get on-track with people analytics.

This work led to him being made a Fellow for the Centre of Evidence-based Management (Netherlands) for his contributions to the field.

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1 Comment on “The Message Behind the Demise of Aon Hewitt Canada’s Rewards Practice

  1. Very interesting article David, thank you. I have been hearing that Aon will also shut down what used to be called Hewitt’s Talent consulting practice, as they did in other parts of the world. Do you find this likely to happen in Canada as well?

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