Mar 25, 2010
By Christopher Van Mossevelde
Branding is what marketers practice to increase the sales of their products or services and has become common knowledge. Employer branding, however, is still a practice that seems to elude most. Ask the average person what it means and they’ll probably say they’ve never heard the term. A search for the words “employer branding” on Google brings 391,000 hits. “Corporate branding”, however, produces over half a million hits. If it is just the word “branding” alone, it delivers 30 million search results. And marketing, unsurprisingly, brings in 450 million search results. Look for “employer branding” books on Amazon.com and it delivers 38 options, whereas books on “branding” produces 2,622 hits and on “marketing” a whopping 352,000 results. Case closed! Employer branding is not common knowledge. Yet, what is it and why does it matter?
As defined by Universum, “Employer branding is the strategy companies use to appeal to desired current and future ideal talent”. In other words, employer branding is to convey to the ‘employees that matter’, why an employer’s workplace is appealing and unique. The purpose is to make it easier for the employer to attract good workers, or even more importantly to get the top talent it needs from the job market. According to Universum, employer branding has definitely become a critical management tool. Working with over 1,200 companies and organisations worldwide, many being Fortune 500 companies, Universum can show that employer branding is a management priority. In fact, 47 per cent of all employers say that the promotion of their employer brand will be higher this year, compared to only 6 per cent that said lower. Maybe not yet commonplace, but it’s definitely an activity that businesses are starting to adopt to stay ahead of those employers who gobble up and keep the best people for the jobs.
Five reasons why employer branding is important
Universum gives five reasons why employer branding should be a vital management tool for every organisation and company today.
1. Shortage of skilled labour: with the emergence of China, Russia, India and Brazil as economic powers, and due to the aging population in the U.S., European Union and Japan, the competition for skilled workers has or will continue to increase. Adding to this trend, there is also a clear shift in students’ preferences moving from technical degrees to non-technical degrees. Companies or organisations that are perceived to be attractive employers will have an easier time to recruit top talent.
2. More with less: a mantra coined during this economic downturn, there is high pressure to cut costs and increase productivity, which has made the need to get the right people in the right jobs even more crucial. Employer branding results in more successful recruitment and retention of top talent. Moreover, by properly communicating the reality of the work environment, companies are more likely to attract talent that fits their organisational culture, thus increasing the number of people with the right skills in the correct positions.
3. Growth & profitability: hiring and retaining top performers is essential for growth and to maintain a competitive edge. Employees who have the right skills, experience and knowledge, in relation to the critical areas of a business to drive growth, are strategically important. In addition, as developed economies move more towards the tertiary/service sectors, people become the primary asset. Employer branding increases your profit margin.
4. Popularity: research on the talent market reveals that graduates and professionals want to work for companies with great reputations; they often turn to family members, friends or colleagues for advice and approval when making a decision about which employers to consider. Moreover, the consumer/corporate/employer brands are intertwined: If a company is viewed as being an unpopular employer, it will consequently affect everything else and cause disequilibrium in the corporate ecosystem.
5. Strength: being an attractive employer provides a company or organisation more bargaining power, as employees will want to work for them more than anyone else, even those that have rare or most in demand skills—irrespective of salary levels. An attractive employer can create for employees an illusion that their choices are limited outside of the organisation, constantly maintaining an image of being the most desirable employer, giving the right reasons or incentives for their top performers to stay.
Employer Branding – a five step process
Now that the importance of employer branding has been explained, the next step is for companies or organisations to start their employer branding. Universum has created an employer branding model that identifies key processes that will work for any organisation or company. This model can be useful for those that are new to employer branding and are not sure where to start.
The five step process:
1. Research: to understand where an employer is positioned in the employment market and to determine the appropriate action plan is fundamental. The four important factors, both internally and externally, are:
• Know how the target group perceives the employer
• Learn what the target group wants and needs from the employer
• Discover where the employer is positioned in relation to its competition
• Ensure that the research is updated regularly
2. Employer Value Proposition (EVP): the company or organisation needs a unique employer offer. The EVP gives current and future employees a reason to work for an employer and reflects the company’s competitive advantage. Employers that manage their EVP effectively benefit from an increase in their talent pool and employee engagement, as well as a potential decrease in salary costs. Typically, less attractive employers need to pay a wage premium to get top talent whereas attractive employers do not. By analysing the factors influencing the employer brand, and by defining a strong and true EVP, the employer will be able to deliver sound and consistent communications during the communication phase and develop an attractive, as well as unique, employer brand.
3. Communication strategy: the development of a communication strategy is always based on research findings and a well-defined EVP. The EVP is a useful tool used by HR, Marketing or Communications to be able to emphasise the most attractive factors and be consistent in the employer communications. Once an employer knows who they want to talk to and what to communicate, the employer then has to choose the most efficient and effective channels for reaching them. Choosing the right channels and understanding how best to target various groups is also based on research.
4. Communication Solutions: the aim at this step is to express the employer value proposition (EVP) by using the right words and images, so it becomes consistent with the corporate identity and branding efforts. The communication material should have the same look and feel irrespective of communication channel. Since organisations use many different channels, it is vital that the target groups recognise the organisation and relate to the employer offer, no matter if they are being reached via the corporate website, reading an advertisement in the newspaper or taking part in an event. Employers should strive to develop consistency throughout their communication material.
5. Action: implementing all the steps and monitoring closely what works and needs to be adjusted along the way is the final stage. It is of great importance at this point that the organisation sets targets on what they want to achieve with the planned activities in a clear and measurable way.
Employer branding in a nutshell is match-making, creating the perfect relationship between the employer and the employee. Employers should research their environment to know how their target group perceives them, understand what they want and need from them and understand their market position. They will need to develop or update their EVP to be consistent in their communications and help people in the organisation be the brand. They will need to communicate or implement tactics to build or reinforce the desired employer image. Finally, an evaluation of all activities will need to be made to ensure that they are on track. Securing a talent pipeline and ensuring that companies have the right people on board is probably the most important task of any employer. To be able to succeed you need knowledge. For example, understanding what professionals want will help you to attract them. If you do not know the answers to these questions, it is probably time to find out.
Interesting facts to know about from employers this year
Having questioned employers about their employer branding, Universum presents the following results from its employer branding survey:
• Employer Brand strategy is predominantly based on management’s vision, goals and objectives (64 per cent), followed by best practices (55 per cent) and research on the talent market (51 per cent).
• Thirty- two per cent of employers worldwide say there will be an increase in graduate recruitment for 2010. In Central Europe, it’s twenty four percent of employers confirming so. Utilities, government/public services & financials are the top three industries that will increase recruitment.
• Thirty-eight per cent say there will be an increase in the recruitment of young professionals. Thirty per cent of employers in Central Europe say that they will recruit more of them. IT, financials and government/public services, are the top three industries that will increase their recruitment.
• Attrition rates are expected to be 8.3 per cent, with the highest attrition rate to be experienced in Western Europe at 10.9 per cent. The top three most affected industries are Telecommunication services, Financials and Utilities.
• The three channels that will be the most used for employer brand promotion this year are the corporate website (92 per cent), on-campus activities (82 per cent) and social media (80 per cent).