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BENEFITS & COMPENSATION
INTERNATIONAL T O TA L R E M U N E R AT I O N A N D PENSION INVESTMENT
Employer Branding is Back and It’s All about Value-added Stuart Hyland Stuart Hyland leads the Reward Solutions Consulting team in Hay Group UK. He began consulting in reward when he joined Hay Group in 1997. After nearly 10 years with the firm he left to work for Deloitte, where he led its Strategic Employee Reward team for London and the South of England. In 2009 he rejoined Hay Group as a member of the Key Clients team, which saw him working with a range of clients across Europe before rejoining the UK organization the following year to lead the Reward business. Since 2011, Mr Hyland has been a member of the WorldatWork international training faculty.
was forced to make redundancies for the first time in its near 200-year history and the manufacturer that had to ask all its employees to choose between job cuts and ‘short hours’ working (with related salary cuts), and the list of similar examples goes on. All these activities chip away at the trust that an employee places in his/her employer and damages a relationship that might have taken decades to build.
The re-emergence of the employer brand and employee value proposition (EVP) has been a steady one. Starting in 2010 with a few quiet murmurings, the noise has quickly built up over the last two or three years and today is now loud, placing employer branding and EVP on the ‘to-do’ lists of organizations, HR professionals and forward thinking business leaders around the world (even when they are not exactly clear on what this means or should involve), but its revival should not come as much of a surprise when recent history is considered.
THE EROSION OF TRUST Countless research studies show trust is a key part of any relationship if there is to be a degree of genuine commitment and engagement. When trust is broken, motivation and engagement levels begin to slide with consequent impacts on personal and organization performance. This then forces the organization into harder survival measures and a cycle of decline is well and truly under way as illustrated in FIGURE 1 below. Breaking
The global economic recession, which started to impact in 2007/08, forced many organizations to react in ways that deviated from their norms and that damaged the relationship they had built up over many years with their employees. There are plenty of examples of such activities, including the global family-run business that
FIGURE 1
As organization results and profits fall, job security declines and people feel vulnerable and concerned about their future
Cycle of Decline
Company profits fall Further organization survival steps
Company performance suffers
To survive, organizations are forced to take more steps to manage cost, including cutting pay awards
Frustration and decline
As staff commitment decreases, they fail to deliver previous levels of performance and the company results are impacted
Staff feel unfairly treated and trust declines
Individual performance decreases Staff commitment falls
1
Based on this experience, staff are less prepared to ‘go the extra mile’ and focus more on doing ‘enough’ to get by
this downward spiral will require a concerted intervention. It is highly unlikely that it will just stop on its own – but where to begin? With so many constraints on financial costs, the majority of organizations will not be able to simply buy their way out of trouble with pay increases and bonus awards. Consequently, attention has shifted to look at the breadth of the employee experience, including many of the non-financial components of the total reward package,* to ensure they are being integrated and leveraged to maximum benefit. It is at this point that organizations find themselves looking at their employer brand. In view of this, it is perhaps no revelation that 64% of organizations recently surveyed had reviewed or were planning to review their employer brand.1
BOX 1
Definition of Employer Brand
Employer brand represents the physical and emotional manifestation of all the experiences and offerings provided by an organization in exchange for the skills, capabilities and experiences that an employee can offer. Consideration needs to be given to this manifestation both inside and outside the organization, as its reach extends beyond the employee population.
how those who get left behind will continue to compete. Considering this, a question emerges around where and how an organization should think about moving forward. BOX 2 overleaf provides a guide for those who are unsure of where to take their employer brand next.
THE EMPLOYER BRAND So employer branding is back on the agenda – but what is it? Frankly, it appears to mean different things to different organizations. For some, it might be little more than a logo, the way a job advert is written or the design of a website; for others, it is much more. It is perhaps somewhat surprising that organizations are so unclear on the definition of employer brand when the same survey revealed that over 60% of respondents described it as being “very important to the business because we understand the positive impact it can have”. However, a definition that seems to be widely agreed upon can be summed up as shown in BOX 1 above.
The Role of Reward in Shaping Employer Brand Although the concept of employer brand can be described as an extension of the total reward approach, the significance of the financial aspects of the reward offering cannot be ignored. The way in which an organization rewards its people both financially and non-financially is key to demonstrating its commitment to its values and culture and is therefore central to the creation and perception of its employer brand.
The Next Evolution of Total Reward However ‘brand’ is defined, one inescapable fact has to be acknowledged. Brand only exists in the mind and consequently shaping perceptions and opinions of an employer brand can be challenging. As Sir Terry Leahy (former CEO of Tesco) said when talking about brand more generally:
The challenge in this regard is to ensure alignment between the different elements outlined in FIGURE 2 opposite to ensure that consistent messages are being sent to the business and to any external audiences as well. Failure to ensure this alignment can create confusion through sending mixed messages which could undermine all other activity and ultimately reduce any potential advantage offered by an employer brand. It sounds an obvious point to make but consider the organization that communicates one of its core values as being teamwork. What message does it send to employees if pay/bonus awards are then driven by the achievement of personally focused performance objectives? In such instances, what will employees actually believe? Will they believe that what the organization is saying is important or what it is actually paying for is important? In most cases, employees will disregard what an organization says and focus more on what it actually proves is important through the way it rewards people. This is one of the reasons why it must be remembered that reward is one of the most powerful communication tools at an organization’s disposal.
“Your brand is not what you say it is, it is what others tell you it is.” Therefore, while defining the employer brand is clearly important, its actual success or failure really hinges on how it is brought to life both inside and outside the organization: the perceptions, images and emotional reactions it creates in the mind of employees and the wider market. This requires the careful alignment and utilization of a range of levers across the full breadth of the employee offering. This is where total reward comes into play. As we know, total reward looks at the breadth of the employee package covering both financial and nonfinancial components and consequently it requires only a small shift to move from this to thinking about the totality of the employee experience. This shift requires extending the thinking and definitions around nonfinancial aspects of the package to ensure they are represented appropriately. The totality of the offering then needs to be considered in terms of its impact on individuals within the organization and, significantly, the messages it sends beyond the organization, i.e. the impact it will have on people outside the business.
A Note of Caution Evidently, how an organization shapes its reward package sends out powerful messages about its values and culture, messages that extend beyond the organization. Several recent examples show how the public can react and reshape their perception of a particular product, service or brand because of what
While total reward as a concept is one that some organizations and senior managers are still struggling to get to grips with, it can be seen that a number of leading edge organizations are already moving beyond this, raising more concerns over
* For further information, please see ‘Report on Total Reward’, B&C International, January/February 2013.
2
BOX 2
they have heard about how an organization treats and rewards its people, influencing consumer buying patterns as a result.
To contradict it may cast doubt on an organization’s integrity which could send customers in the direction of a competitor.
Once again, the objective is to ensure alignment so that consistent messages are received by employees and the market. If an organization positions itself in the market around family values and a sustainable/green message then the employer brand and consequently all the different elements of the total reward approach need to reinforce this message.
One modern day challenge to this consistency comes in the form of social media. Ten years ago, if an employee had a particular grievance or complaint about the way his/her line manager or organization was treating him/her or colleagues, he/she might have complained to a few friends and close family members on arriving home. Today, thanks to social media, any expression of discontent is much more immediate and can be posted online within seconds and communicated to possibly thousands globally.
What Stage is Your Organization at in the Employer Branding Journey?
As a consequence, it can be seen that an employer brand is potentially more volatile and at risk than at any other point in history. In light of this, it is perhaps concerning that 55% of organizations in the survey mentioned earlier never monitor what is being said about them by employees on social media, with the most often quoted reason being a lack of resources.2
1. The organization is not currently doing enough. Start with a clear plan. Is the current employer brand really understood? Have employee views been gathered recently and will it support the performance and goals of the business? What does the ideal employer brand for the future look like? How does it differ from the current scenario and what does the transition journey look like? This will help to identify the changes that might be required and begin the process.
In the same line, another potential issue has been the emergence of workplace review websites where employees can write anonymous reviews of their current and previous employers. This has a much wider implication, far beyond the ad hoc issues that might get reported on the likes of Facebook. The employee review sites are becoming an increasing point of reference for those looking for jobs or facing an interview and could seriously affect an organization’s ability to attract high quality talent. Failure to monitor and take corrective action on how an organization is being described on these sites could pose a significant threat to business performance moving forward.
2. Something is being done – but is it the right thing? Gaining a clear sense of the right priorities in work of this nature can be challenging but it is possible. Financial metrics have a role to play here to help identify and quantify the potential financial benefit to the business of an improved employer brand. This data can also be used to help identify the development priorities (i.e. those activities that will deliver the most benefit to the business). Of course, this is only one side of the conversation and it needs to be placed in the context of employee expectations and perceptions and this information should also be used to inform the selection of activity. It would be a risk to focus on only one of these two dimensions but taken together they can help to ensure an informed decision is made over where to focus effort.
Anything But Soft and Fluffy! One of the criticisms of employer brand that persists from its previous popularity is about its intangible nature which creates an impression of something that is a little nebulous with questionable value-added to an organization. It is therefore perhaps no surprise that many senior managers have had difficulty understanding the importance or impact of the concept and it explains why it has largely fallen out of popular use in recent years. However, the employer brand concept that is emerging today can clearly be seen to have been shaped by the global recession. Rather than being soft and fluffy, organizations are realizing that it can:
3. There is too much going on! Go back to basics and revisit the desired employer brand. This should act as the blueprint against which individual activities can be tested by understanding their significance and impact on the journey. Are there some that are more significant and impactful than others? Focus on these first; do not try to do everything at once. It is far better to focus on a few things and do these well (in a fully integrated manner) and to take employees on the journey as opposed to trying to do too much at once and delivering change fatigue to employees which can cause them to disengage from the process and, ultimately, from their employer.
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help to resolve critical business issues; attract and retain talent; help to deliver performance improvements; deliver real and quantifiable impacts; and provide a genuine source of competitive advantage.
At a time when many organizations are struggling for performance in a competitive and challenging market place, the benefits listed above are hugely significant and it is easy to see why so many are returning to the table to look again at their own employer brand.
4. Don’t try to live the impossible dream! Finally, whatever employment brand is required it needs to be realistic and deliver on its promise to employees. Even if it has to be positioned as a journey, a credible destination still needs to be defined. Failure to live up to the promise will only undermine a brand in the minds of employees and potentially in the wider market, as it can lead to a flurry of potentially negative statements on social media and we all know how damaging these can be.
To illustrate the points above, one large, global, heavyindustry organization has recently undertaken an exercise to look at the potential business case for the review and enhancement of its own employer brand. As a very traditional and well established organization, this
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Values
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AN OPPORTUNITY WORTH PURSUING What is clear from all the evidence available today is that employer brand is back on the agenda. Ignoring this fact is a risk; it has returned as a much harder, more business driven approach than before. Now it offers a very real
Employer Branding – Aligning the Different Elements
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The work undertaken by the organization outlined above might sound fairly exceptional in terms of delivering multi-million pound benefits but many others are looking to build cost-benefit driven business cases and are surprised by the potential upsides being offered.
FIGURE 2
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was not something that it had really considered previously. However, increasing business performance challenges led to its consideration of a wide range of different types of business change and one of those looked at how it manages and treats its people, which is where the issue of employer brand was raised by the HR team. As a result, and in the face of a slightly sceptical management team, the organization conducted a piece of research in 2013 (with external consultant support) to understand whether developing its approach in this area would offer any notable advantages, i.e. would the potential benefits justify the associated efforts and costs. After an initial piece of research lasting just a few weeks the board was presented with a business case which offered an annual saving of several million pounds. This was a business case that had been validated by the organization’s own finance team and which was so clear in its potential upside that the decision to move forward to a more detailed piece of activity planning was an easy one to take.
Employee
Culture
Reward
Alignment
source of competitive differentiation, at a time when most organizations are looking for any potential advantage they can find. It can be a challenging issue to address but a simple evolution of the total reward concept to incorporate the external perspective may be a good place to start, as the rewards are there to be had for those with the desire to really understand and Ω influence what other people think of them.
References 1 1 ‘People talk... but are you listening? Hay Group IMPACT employer brand pulse survey 2013’. 1 2 Ibid.
Copyright © Pension Publications Limited 2014. Reproduced from Benefits & Compensation International, Volume 43, Number 7, March 2014. Published by Pension Publications Limited, London, England. Tel: + 44 20 7222 0288. Fax: + 44 20 7799 2163. Website: www.benecompintl.com Produced by The PrintZone (www.theprintzone.co.uk). Prior written permission required to reprint in bulk.
