The value of Employer Branding

The buzz word “Employer Branding” is back after some difficult years with the financial crises. The word “Employer branding” sound nice but what is the value? For the last two years I have heard many times: “We only focus on short term recruitment and don’t have the time or resources for employer branding.”

But investing in long term employer branding is investing in short term recruitment. Unfortunately the opposite is not true - investing in short term recruitment is NOT investing in long term employer branding. In fact, prioritizing employer branding gives a better return on your recruiting investment in terms of both money and quality. The British Lloyds TSB knows this first hand, just to take an example. Their Dark Horse campaign in 2006 during the good times (featured in the first issue of Universum Quarterly 2006), cut the company’s graduate recruitment cost by half, to an average of GBP 3,500. Studies show that recruitment, including senior executives, can cost up to $70,000. How much money would you save? Even more important to the cost savings is that the quality of the candidates will improve. This means shorter recruitment periods and better-quality employees in the empty seats.

Another misconception about employer branding is that it is only warranted when a company is actively recruiting. The financial crisis has showed that many seem to think employer branding can take a hiatus in times of non-recruitment. But, as the best in the business know, beginning to build an employer brand when recruitment picks up again is way too late.

So to all companies out there – those who recruit and those who currently don’t – enjoy this blog and use it for a better Employer Branding future :)!

Social Media increase transparency

The world is more transparent today than ever before. And companies are highly affected by Social Media that makes it so much easier to expose what’s going on inside the company to the public. Facebook, Twitter, Blogs and YouTube are new channels where people share their views and experiences about employers. Rumours, scandals, lay-offs and lawsuits that may have very negative effects on the employer brand are nowadays very difficult for companies to control. As a result, it has become more costly for companies to promise what they can’t live up to. Increased transparency means that the employer brand must be very much linked to the reality inside the company.

Luckily, Social Media also brings some good news for employers. Companies may actually gain from the new channels as these channels increase the opportunities for interactivity with job seekers and bring a more personal touch.

This increased transparency means that companies today have to be more consistent in the way they treat their employees. And they have to be very clear and carefully inform the labor market about the work conditions and the culture inside the company. The good thing however is that companies can use exactly the same communication channels to increase the knowledge about the company and the workplace. Social Media may actually be used to spread the word about the employer and also be a tool for recruiting ‘passive job seekers’, i.e. highly attractive candidates who are not actively looking for a new job but are keeping an eye open for new opportunities. Some companies have started using blogs and Facebook to give job seekers and other parties a more personal ‘feel’ of the company. These communication channels open up for interactivity and two-way communication. As such, they may complement the traditional one-way communication channels.
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Small companies with limited marketing budgets may also use Social Media to create familiarity and awareness. Another reason for using Social Madia as a marketing tool is to create a more personal dialogue with current and prospective employees. As I see it, Blogs have so far been underutilized as a direct recruitment tool. However, many companies are presently exploring the opportunities to communicate with job seekers through Social Media. From an employer branding perspective, Social Media can become a part of the overall corporate communication mix as a way of enhancing knowledge about the company among target groups.

I look forward to see how companies will use this opportunities in the future!

The cost by not offering Gen Y the Work/life balance

New surveys from Universum conducted around the globe shows again that work/life balance has become a common expectation of working life. Gen Y expects companies to offer work conditions that make it easier to balance professional and personal lives. A growing labor shortage in the future within several occupations also means that employees can demand more from their employer, and not only higher salaries, but also demands for working conditions that fit in with their lifestyles. At the same time, I have seen that an increasing number of employers put a lot of effort into marketing their work/life balance initiatives to attract and recruit talent.

As I see it, there are several drivers behind why work/life balance has become more important for Gen Y. Firstly, an overall labour shortage within highly attractive occupational groups implies that employees can set the tone and demand more from their employers. Secondly, values have become more important for the choice of employer. The young people of today, Gen Y, compared with earlier decades, are more loyal to themselves. Many employees identify themselves with their job, but also with what they do on their spare time. Life outside of work has simply become more important for peoples’ self-image. Another driving force behind the increasing focus on the work/life balance is the changing conditions of working life. Globalization, new information technology, the 24/7 society, less hierarchical organizations and constant change hugely increase the pressure on individuals and their ability to adapt to new conditions. And to cope with these challenges employees need opportunities for relaxation and recovery to stay productive.

Work/life balance has therefore become a business imperative for companies as they have noticed that they are fighting a losing battle on the talent market if they are not able to offer the talent what they are asking for. Many companies have also started calculating the benefits of work/life balance – and the costs of failing in this area. A stressful working life is expensive. For companies, costs include high employee turnover, increased burnout and sick leave, failed change initiatives, reduced commitment and difficulties in recruiting the talent that the company needs. Poor work/life balance conditions may have negative effects on the employer brand and in the long term the company will face serious difficulties when it comes to sourcing human capital.

The Millennials vs Gen Xers

There is a lot of talk about the Millennium Generation around the globe these days. And especially the differences between the Millennials and Gen Xers.

The Millenials are often called Gen Y in Europe. There is a real shift in attitude and priorities between the two generations. For Gen X is still very individualistic. It’s all about a challenging work and a performance-based culture. The Millennials (Gen Y) have a very different way of looking at the work environment. They’re very team-based, they really want to contribute to society, and their work/life balance is something they are not willing to give up. Millennials want more structure and mentorship. The challenge of employer branding is trying to understand that you have to brand yourself differently because that’s a different generation. They look for different things when they join a company and are motivated to stay by different things than the Gen Xers. For example, Millennials seek structure, training and collaboration. That’s why internships and rotational programs are so popular – Millennials see them as a structured an stimulating way of learning.

Talent shortage in China

The last years booming in China has made the country as a popular country to invest in, especially for multinational companies. At the same time qualified people with the right skills is missing and Employer Branding becomes even more important.

I met many multinational companies on my round trip to Asia, like PwC, Coca-Cola, Deloitte, L’Oreal, Volvo, BCG, Siemens, Deutche Bank, JP Morgan, ING and 50 other employers. Many of those companies learned me a lot about the differences in the educational system. In China, education tends to lean towards theory while education in Europe and the US emphasize practical experience and teamwork. Someone told me that Chinese students still need to learn old scripts by hart even if it’s in an old language and useless in the daily life. So even if the talent pool is huge, there are still shortages in suitable talent for foreign companies.

They also told me that multinational companies looking for talent who are fluent in English may also be disappointed. Many graduates from Chinese universities lack proficiency in English, which means that they are not qualified for many of the jobs that that are in demand worldwide. And this is naturally also a problem for Chinese companies that want to expand internationally. Some foreign companies in China are recruiting from India and the Philippines where talent who are fluent in English is easier to find. Chinese students are even not allowed to stay in contact with other students from other countries through social networks such as Facebook, Myspace and Twitter. Those channels are blocked. When I arrived to China, I was told to not use the following words in my emails or write them on internet: “4th of June”, “Falun Gong”, “Dalai Lama”, “Taiwan” and “independency”. China has one of the most advanced systems for monitoring the internet.

China as a country is also facing a problem, 80% of Chinese students want to study abroad, and only 25% of them will come back after graduated. The Chinese government is now looking into different incentives to get them back.

As a result, some multinational companies have started taking training – for example in English or leadership skills – more seriously. Companies that want to use the talent pool in China simply have to be prepared to invest more in education and development to make sure that the Chinese talents achieve the desirable set of skills they demand.

Employer Branding in Asia

I have just returned from a longer Employer Branding turne in Hong Kong, Beijing and Shanghai, where I managed to meet more than 50 employers. During my trip I realized that the cultural, religious and socioeconomic differences are even larger in Asia than in Europe and the US. With this in mind employers have to be extra sensitive to local variations in culture and attitudes when they tailor their employer brand for different parts of Asia. Hence, it’s crucial that employer branding strategies are developed based on local input – and not in a top-down approach from an office outside the region, e.g. Europe or the US.

Some lesson learned

GENERATION Y: There is a big focus and awareness about Generation Y among employers in Asia. They call the young talents for “small princess” and are afraid that they will become too spoiled. The result of the one-child policy is that parents put all effort in their child and get very high expectations on them.

RELATIONSHIP: Establishing an employer branding presence in Asia depends on many factors such as personal relationships with officials and government entities – all of which take time to develop. The most attractive companies to work for in China have been in this region for a long time and their strong employer brands reflect their commitment and investment.

FEAR: Your reputation, regardless of if you are a company or a person, is extremely important in Asia. Many companies therefore feel that the safest way in doing employer branding is to do the same as the competitors. It takes time to try something new.

EMPLOYER BRANDING: Employer Branding is a new fast growing discipline. It’s a quite new topic and executed on an operational level rather than a strategically level. Employer Branding is still short term recruiting rather than long term branding. Few seniors or leader groups are involved in the Employer Branding work. It will take time before CEOs realize the advantage of Employer Branding.

RESEARCH: Using research to track and benchmark the Employer Brand is still a very new philosophy and tool for them.

Employer Branding surveys around the globe

The recruitment market is finally heating up again. At least based on feedback from many companies around the globe. They are starting to find it difficult and costly to replace talents as valued employees leave the workforce when times is getting better. As a response, Universum is right now conducting the world’s largest Employer Branding survey to help companies to understand more about preferences among young employees.

Having started with India in November and in Europe and North America in December, Universum is now reaching the final stages of the most ambitious research on student career expectations ever, conducted in 31 countries. To deliver the reliable and comprehensive trending data, relationships with close to 1,000 universities around the globe is needed. Around 350.000 students will complete the Universum surveys this year. The surveys are the first step towards developing a successful employer branding strategy, answering questions such as:

• What do students expect from their future working life?
• Which companies do students identify as ideal employers?
• Which companies are competing for the same talent?
• Which communication channels do students prefer to use?

Universum conducts regional and country specific research on several student populations:
graduates in Europe, US, Asia, Canada, Australia, Russia and South Africa.

If you are interested in understanding more about the surveys, send me an email at cd@universum.se.