‘The employer brand, the attractiveness of that organisation as a place to work, has become as important to retention as the product brand is to product sales’. Dr Shirley Jenner and Stephen Taylor, Manchester Metropolitan University Business School
Recently we wrote about protecting your employment brand during organisational change (see here). But more broadly, what does building and maintaining a stellar employer brand really mean? And why is a top down approach really the best?
Few HR professionals and leaders would disagree that reputation management has become a priority for all organisations. Consider the financial crisis and the impact on the regard in which this profession is held - or the impact on BP’s reputation and share price of the Deepwater oil spill. Reputation is possibly the most fragile and valuable intangible resource a company holds. Closer to home, the brand of our big banks have taken a hit with negative publicity around what is perceived as excessive profits at the expense of the ordinary Australian.
An organisation’s reputation rests on customer experience and in the minds of suppliers, the media, shareholders and other key stakeholders. Reputation also relies on the ability to generate high levels of emotional commitment first and foremost from employees. Just as a company brand is used to gain customer loyalty and market differentiation, an employer brand can be used to a similar effect by HR and organisations, to compete effectively in the labour market and drive employee loyalty.
Why should manangement be concerned about this?
At the extreme, without commitment to the organisation, employees can become increasingly willing to take risks for personal gain that put the organisation at risk. Think of what happened at Lehman Brothers and at AIG. However there are more positive examples of organisations who build high employee commitment. Google certainly gets it. They’re snapping up their talent pool based on their employer brand. The allure of working with the best, and working at Google because you’re one of the best, has been central to its employment brand from the beginning.
According to Corporate Leadership Council research1, successful employment brands access up to 20% more of the talent market, enjoy a 30% increase in productivity, can reduce new hire compensation premiums by up to 50% and reduce turnover probability by up to 87%. Employer branding can also add profits to the bottom line and help save on recruitment and advertising costs
What springs to mind for you when you hear the term “employer brand”? As we understand it, a brand is what key 3rd parties think about you and what attracts individuals to want to associate with you.
Former Tesco chief executive Sir Terry Leahy has said: "Your employer brand isn't what you say it is. It is what people tell you it is." By “people”, we believe he means not only existing employees, but past and future employees. The employer brand lies in what employees say to others about their real experience at work. It stands for the emotional connection people have with a company more than any formal statements about what it stands for.
We believe an employment brand is only successful when employees - past, present and future – identify with who they are working for. The employment brand is built through daily interactions and working relationships, and is just as easily destroyed when contracts are broken and behaviours change.
Many big brands promise great things, but deliver empty gestures. What organisations do (as opposed to what they say) is critical. Which will be more influential in opinion formation: having a statement along the lines of “our employees are our greatest asset” in an annual report – or the experience and commentaries across social media of hundreds of employees and ex-employees? Whether companies like it or not, employees become ambassadors for their brand, even if it’s just on their Facebook profile page where someone, for example, may list herself as “corporate drone” at company X.
The power of a good employment brand starts from the top. A strong employer brand should connect an organisation’s values, people strategy and HR policies and be intrinsically linked to a company brand.
A brand cannot be created from scratch, because it already exists as a fact. Discovering the real employment brand (as opposed to making one up from a wish list of what you want it to be) is in the best interest of the company. By ensuring that candidates know exactly what they’re getting into before they take the job, an honest employer brand will attract the right employees, help improve retention rates; and by putting an honest face on the company, it will help with employee morale.
Gone are the days when all you needed to do was place an ad in their newspaper to fill a critical role. Skills are in short supply,candidates are smart and the good ones don’t need to look for a job. Instead of ‘posting and praying”, recruiters are drawing on social media and tools like LinkedIn to source passive candidates. Employee referrals are more important than ever.
As organisational change become increasingly commonplace, an employer brand built through the messages and behaviours of its leaders can articulate to employees what ‘the new way’ means in terms of beliefs, attitudes and behaviours. It can even signal to them that the time might be right to start looking around. An employer brand has as much value in deterring the wrong kind of people from an organisation as in attracting the right kind - people who understand and espouse its distinctive vision and values.
So, armed with this knowledge, what questions should leaders be asking about the employer brand of their organisation?
First can the leaders of the company articulate the brand? Is there awareness at the most senior levels of what people think and feel about working in the firm, and their levels of confidence in their leaders? Or is the employer brand purely seen as the responsibility of the HR team?
What is the CEO doing to ensure alignment between the aspirational brand and the reality which is lived by most employees? Is there one set of rules for the CEO and his or her direct reports and another set for the rest of the firm? Does the CEO engage authentically with staff at all levels and value people and the relationships they seek at work?
Test the link between the understanding of the brand and how it measures up in terms of specific policies and initiatives. How is the brand communicated in the processes of bringing talent into the organisation? How is the brand impacted by organisational change, by the level of care extended to departing employees and those who survive restructures?
Does the organisation track and measure the impact of the brand? This can include expenditure on recruitment consultants, prevalence and cost of premature resignations, number of spontaneous applications and employment enquiries, the ratio of acceptances to offers. Ask about how HR determine the real reasons why people leave? And how they maintain relationships with leavers as alumni?
Take the opportunity to check in with employees around their real life experience of working for the organisation. Work through the detail of engagement surveys, and commission research into the messaging conveyed in LinkedIn, Facebook and Twitter about the firm.
Phenomenal business and reputation failures mostly come down to people and cultural issues. History has shown that “culture trumps compliance” when it comes to the prevention and resolution of these failures. Performance depends on the health of the company culture and the level of commitment from employees. These factors need to become as much a focus of the board as the financials and the robustness of the company’s strategy. Knowing and articulating the employer brand of an organisation is an integral part of understanding its culture and protecting its reputation.
An authentic and strong employment brand lessens recruitment costs, attracts and retains talent, and underpins customer service. A strong employment brand mitigates risks and leavens, or softens the broader damage faced by a firm when things go wrong. People leave organisations – particularly during times of change and upheaval. If the brand is strong, the damage to the organsiation’s reputation will be lessened and for those who are not impacted by the changes, fewer will leave following the change. At their farewells they will talk fondly of their experiences. In the back of their minds may be the ghost of a thought about returning at some point in the future. They will be alumni – a valuable constituency of people who, with the right treatment, will act as informal recruiters and brand advocates for the organisation that still holds a place in their affections.
1Corporate Leadership Council “Attracting and Retaining Critical Talent Segments: Building a Competitive Employment Value Proposition” (2006).