"Our people are the fabric of our organizations. They are the differentiator. The way we select, develop, motivate, and retain them now will determine how we succeed. This is our time to make a profound difference."

So said Aon Consulting Worldwide CEO Kathryn Hayley at Aon Consulting's first Client Symposium held on October 26-28, in partnership with the Kellogg School of Management at Northwestern University in Evanston, Illinois. Hayley issued a challenge to the 42 employers from diverse industries who were in attendance, to find new ways to lead their businesses and invest in talent in an uncertain economy and amid a global recession.

During the symposium, which featured plenary sessions by three of Kellogg's most forward-thinking professors, participants focused on their most pressing human capital challenges, attending various breakout sessions on health and benefits, retirement, pay and performance, and human capital risk. The four major trends and employer challenges emerging from those discussions are outlined on the following pages.

1 Retirement plans are decreasing in value.

Employers had varying concerns on their defined contributions and defined benefit plans, depending on the average age of their workforce and existing plan strategies. Many are choosing to reevaluate their pension strategies.

Confidence in defined benefit plans in general has dropped dramatically. The current economic climate has demonstrated employees' lack of financial savvy when managing their retirement investments for the long term. Many employees began investing when the market was booming—and now are seeing the value of their pension plans decreasing by 20 percent or more.

Employers are acutely aware that the majority of their workers aren't anywhere close to being financially prepared for retirement. The combination of medical advancements that help people live longer and worker apathy toward retirement savings is leading to millions of employees having little money left for retirement.

THE CHALLENGES: Experts suggest that the best solution to this dilemma is for workers to remain in the workforce 5–8 years longer than anticipated. But will future generations of workers be healthy enough to work beyond the current retirement age, and will they be willing (or forced) to do so? How can organizations help their employees heed the call to action and save for retirement?

2 Healthcare costs are rising.

As employers look to the future of healthcare management, one thing on their minds is sustainability. Can business continue to provide healthcare? How much more can it afford?

For developed countries, the average health expenditure in 2006 as a percent of gross domestic product was 8.9 percent, according to the Organisation for Economic Co-operation and Development. Participating in that survey were France (11.1 percent), Germany (10.6 percent), Canada (10 percent), Australia (8.8 percent), the U.K. (8.4 percent), and Japan (8.2 percent). The U.S. topped the list with 15.3 percent, which translates to more than $7,000 per person.

Given that healthcare costs will continue to rise globally—8.9 percent on average—how can employers work to improve the health and productivity of their workforce, versus cost shifting through plan design changes? And how can they balance pressures to find immediate solutions versus making long-term investments in order to demonstrate return on investment (ROI)?

Through initiatives like disease management and smoking cessation, employers are trying to drive a culture of healthcare consumerism and patient choice, promoting healthy behaviors, mitigating costs, and promoting wellness in an integrated way. Meanwhile, they find themselves with less leverage and negotiating power with their providers because of vendor consolidation.

THE CHALLENGES: How can employers continue to give employees both a financial—and personal—stake in their own health? How well are incentives working, and how can employers pay for them with shrinking budgets? How much risk can they afford?