COMMUNICATIONS MANAGEMENT. Calverton House 2 Harpenden Road St Albans Hertfordshire AL3 5AB

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1 Calverton House 2 Harpenden Road St Albans Hertfordshire AL3 5AB COMMUNICATIONS MANAGEMENT tel: +44 (0) fax: +44 (0) info@cm-pr.co.uk

2 A research-based guide to employer reputation management WHY DON T PEOPLE WANT TO WORK FOR US? COMMUNICATIONS MANAGEMENT :BUILDING REPUTATIONS

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4 Introduction Have you ever thought 'in an ideal world I'd love to work for that company?' One you see as a good employer and an organisation it would be great to be part of? We asked a number of senior HR professionals this question as an introduction to our research*. They came back with a varied but quite recognisable list of employers - Asda, Microsoft, Orange, Nationwide and B&Q to name a few. What makes these organisations recognisable as 'employers of choice' and what, if anything, have they done to achieve this recognition? This guide, and the research project that supports it, aim to answer these questions and more. Why is it so important to strive to be an employer of choice these days? How can your organisation become one? How can you get other people to see it as one? At Communications Management we specialise in reputation management and have been asked by several organisations to focus on managing their reputation as an employer. They have recognised that in today's 'war for talent' it is no longer good enough just to be a good employer, you have to be perceived to be a good employer too which involves managing communications around this issue to a range of key stakeholders. The following guide outlines the 'whats', 'whys' and 'hows' of employer reputation management, providing a valuable reference tool for organisational development, human resources and communications professionals. We hope you find it useful. *The Research Communications Management undertook in-depth interviews with 8 leading employers in the UK to assess their reaction to the issues we raised in this guide. We interviewed individuals who were involved in the management of their reputation as an employer. They ranged from recruitment specialists to HR and Organisational Capability managers. We also undertook desk research, finding secondary data to further support issues raised. The research was started in late 2004 and completed in February Contents What do we mean by employer reputation management? Why manage your employer reputation? What does a good reputation look like? How can you manage your reputation? Managing your employer reputation with Communications Management References p2 p3 p5 p7 p10 p11 COMMUNICATIONS MANAGEMENT :BUILDING REPUTATIONS

5 What do we mean by employer reputation management? All organisations, whether they recognise it or not, have an employer reputation. That is, a perception held by individuals of what type of employer you are, formed from their personal experience and the views and opinions of others. Do people think your company is an exciting place to work? Or perhaps they view it as a paternalistic employer? Is it up-to-date with its views and actions on corporate social responsibility? Whatever the reputation, it will exist and will affect individuals' behaviours towards that organisation. This perception will contribute to their career choices - whether to apply for a job at that organisation, or indeed continue to stay if they are already working for them. Any reputation, whether about an employer, an organisation in general or about an individual is based on two things: Employer reputation management means proactively managing your perception as an operator in the employment market through a combination of what you do and what you communicate to the outside world. what you do + what you say So, an employer reputation is based on how you behave and how you communicate to the outside world as an employer. Effective employer reputation management is about understanding both and managing the links between the two. Organisations who effectively manage their employer reputation firstly decide what type of reputation they want to have (consistent with their organisation's business goals, vision, values and strengths), then aim to be that type of employer and tell all their key stakeholders that they are. You can't rely on people proactively finding out for themselves what type of employer you are - normally they won't bother. You will equally risk people coming to their own conclusions which may be incorrect. Employer reputation management means proactively managing your perception as an operator in the employment market through a combination of what you do and what you communicate to the outside world. Those organisations who effectively manage their reputation are the ones who are seen as employers of choice - B&Q, Microsoft and the like - and they will also be the ones who gain a competitive edge through this - they will continue to attract the best graduates and experienced professionals. So what are the real gains to be made from managing an employer reputation and why is it becoming so important to do so in the current business environment? 2

6 Why manage your employer reputation? Being a great employer simply makes business sense. Senior HR Manager, High Street Building Society Our research shows that employer reputation is now of Board-level concern and a priority business issue in many companies. Many of those surveyed said it was explicitly cited in their company's core values. The war for talent has perhaps become an overused term in the past couple of years, but this doesn't mean that the need to attract and retain the best talent has gone away. In fact, if anything, the need to do this has increased. In 2004, a CIPD survey 1 found that half of all employers surveyed were experiencing difficulties in recruiting staff. These difficulties seem to be primarily about finding the right skills and talents in new recruits. Of those surveyed by the CIPD, 55% cited managerial and professional roles as those hardest to fill. A recent survey 2 by recruitment outsourcing company Capital Consulting also showed that recruiters rate the quality of jobseekers as more significantly worrying to them than the speed or cost of recruitment. In the UK we are faced with an ageing population and the lowest unemployment levels since the 1970s. National Statistics 3 predicts that there will be half a million less people in the 35-44yrs age group by 2026, so the situation isn't going to improve in the future. We are also faced with a more mobile workforce, where talented individuals have further information at their fingertips about rival employment opportunities. Talent retention is also an issue. The CIPD Survey 1 claimed that 77% of their survey participants were experiencing difficulties in retaining staff (up from 72% in 2002). At the same time individuals have become more choosy about their lifestyle and how it relates to work. As our social structures have changed, the career and job you choose holds more relevance and value than just a way to pay the mortgage. And while a deficit of talent pervades, the importance of people as a lever for competitive advantage has grown. The advantage to be gained through people and the value they bring to the growth of an organisation is huge. The company that can attract and retain people who will develop their organisation faster than the competition will create that edge. So the case for becoming an employer of choice by proactive management of your employer reputation is one of business competitiveness. The people-related benefits can be summarised as follows: More effective recruitment - creating a positive reputation as an employer allows organisations to attract and select the best talent in the most cost efficient manner. Increased retention and motivation of existing employees - a positive reputation will also affect the behaviour of existing employees, making them feel proud and more motivated to achieve results for their organisation. Not only does this make the existing workforce more effective, it also reduces the cost of recruitment. The creation of competitive advantage - by attracting and retaining the most talented people, organisations can gain an edge on their competitors. 3

7 Underpinning this is the fact that employees and jobseekers are also consumers and members of the wider community. This means that there are further business benefits to be made from managing an employer reputation. Leading organisations have found: Improved Customer Perceptions - the link between how an organisation is perceived as an employer and how its products, services and general success as an organisation are perceived by the marketplace are irrefutably linked. A bad employer reputation has damaged sales (the most extreme being those where cheap third world labour is perceived to be used) A More Diverse Workforce - proactive management of an employer reputation has helped many organisations access a more diverse workforce turning around negative beliefs held by minority groups. It has been proven that the ability to access a wider and more diverse workforce allows organisations to access a broader range of talent and capabilities, as well as being more representative, and thus more 'in tune', with the consumers they serve. Increased Loyalty - a positive reputation as an employer allows organisations to ride the rough times when a scandal or drop in performance threatens their success. A strong employer reputation instils trust in its audiences that the organisation will survive in the long-term. Not only did our survey find that employer reputation was a business priority for respondents now, over 85% of organisations stated that employee perceptions would be even more important for them in 15 years time. We believe that in the future how an organisation is perceived as an employer will become an increasingly important aspect of shareholder relations. Already, many companies are producing evidence and information about its people policies in the form of Human Capital reports, following the Government-sponsored Kingsmill report. Investors and suppliers of capital are increasingly seeing the ability to attract and retain talented people as a necessity for a successful organisation. So, if the case has been made to manage an employer reputation, what sort of reputation is going to attract and retain the best talent? The following section summarises the findings of our research in this area. 4

8 What does a good reputation look like? Through this research and Communication Management's experience of working with organisations in this area, we see four aspects to an employer s reputation. VALUES Potential employees nowadays seek more lifestyle options and are more aware of employers' beliefs, ideals and values. Recruitment Manager, soft drinks company PEOPLE POLICIES EMPLOYER REPUTATION CULTURE CORPORATE REPUTATION The company's reputation and brand, around the quality of the product, are seen as highly influential in terms of the quality of employees they attract and the morale of existing employees. UK Employee Benefits Manager, FMCG producer Values: it was clear from our survey that employees are interested in the way an organisation conducts itself when carrying out its activities and what it stands for. Most are looking to work for organisations who are ethical, engage in charitable work and other activities under the corporate social responsibility banner, and work in a values-based way. According to a MORI poll 4 92% of British workers say that their employer's social and environmental responsibility is important to them. A recent piece of research by executive education and research institute Roffey Park 5, cites that 70% of employees are also looking for greater meaning in the workplace. That is, they want to attach a sense of significance to their work. The research also found that employees' underlying perception of their purpose and nature of work affects their motivation and performance. This aspect of employer reputation management links with the emerging field of employee engagement, where building effective two-way communication between existing employees is becoming a business priority. 5

9 Our organisation's profile and reputation are highly important in our efforts to attract and retain an appropriate workforce Group HR Manager, local authority Culture: The HR professionals questioned in our survey cited a range of 'soft factors' that they thought people were looking for in an organisation. Treating employees with honesty, fairness, openness and trust were seen as important. Aspects around providing a challenging environment and enabling employees to fulfil their potential were also seen as critical. A culture based on effective teamwork and with good leadership was believed to be vital. One employer operating in the financial services sector said that linking performance to customer satisfaction was very important for employee satisfaction and increasing job applications. Corporate reputation: There is also evidence to suggest that potential employees make an assessment of an organisation's overall corporate reputation and factor this in when developing a view of them as an employer. In another piece of Communications Management research 6, 86% of City workers felt they were personally judged by their employer's reputation. In the context of employer reputation management, we believe a corporate reputation is viewed from two perspectives. Firstly, employees will want to know if they are applying to or working for a successful company. Is the organisation stable, growing or generally doing well in the marketplace? Secondly, they will also look for a certain 'standing' in the market place. That is, they are more likely to hold a positive view of the organisation as an employer if they hold a positive view of the product or service the organisation provides. People want to work for organisations they have heard of, who have a good market brand. However, increasingly individuals are attracted to organisations who are doing something different in the marketplace (the swoop to take up jobs during the dot.com boom is evidence of this) and are not necessarily 'mainstream'. Organisations also have to consider whether profession or sector reputations impact on their employer reputation. For example, the public sector can be perceived to be a slower moving environment and accountancy can be seen as an 'unexciting' profession. People policies: the best talent looks for the best people policies to support their employment. From reward and remuneration through to flexible working, health and well-being policies, employers of choice strive for best practice in their people policies. From our survey, the most cited policies were flexible working, employee benefits, personal development and training and real career opportunities. The relative importance of each policy depended on the sector each were working in and the type of talent they wanted to attract. To summarise, organisations need to pay attention to four key areas in order to build a positive employer reputation - their people policies, their culture, their values and their corporate reputation. 6

10 How can you manage your reputation? Becoming a great employer requires a change in attitudes over a significant period of time. Organisation Capability Manager, mobile phone company In order to proactively develop a reputation that is going to make your organisation an employer of choice, there are several areas and activities you need to focus on. Our experience with the companies we have worked for and our research suggests the following blueprint for success. WHAT YOU DO: Understand what type of employer reputation you want As with all strategic interventions, clear goals at the outset are important. As an HR decision-maker you need to know what type of employer reputation is going to attract the type of talent you need to build your business. You need to understand your target audience, what that particular group of individuals think makes an employer of choice and what factors they are most going to be influenced by. Our survey found that there are certain 'hygiene factors' that all organisations need to achieve if they are going to be seen as an employer of choice, such as fair pay and development opportunities. Different organisations and different sectors are then going to need to create different and distinct employee perceptions. A strong corporate reputation might be more important in helping a merchant bank attract talent, a reputation for helping working parents for a supermarket. For some, recruitment issues are about trying to attract and retain people from a particular geographical area or from a particular demographic group and their employer reputation strategy must focus on these particular issues. Get buy-in from the top Changing any reputation takes time and our survey established the importance to this of managing employer reputation at the highest level. In most cases, the lead came from HR, but some reported operating cross-company steering committees and most sought broad involvement from within the organisation. Create the right environment Of the eight organisations we surveyed, all talked about the activities they are undertaking to become an employer of choice. With reference to our previous model, some of these were activities around new HR policies and procedures whereas others were related to bringing about cultural change within an organisation i.e. creating the right values, culture and corporate reputation. Most were acutely aware of the need to develop values and working environments required by the best talent. The majority were undertaking corporate social responsibility programmes, involving a mix of ethical working practice, charity and community work. Others felt they needed to focus more on the working environment, coaching their leaders to inspire new talent. As you might expect, this was also an area where our survey reported the greatest difficulty. The principal barriers that prevented organisations becoming an employer of choice included the frustration of trying to change an existing culture, the short-termist nature of business strategy, and cost. 7

11 Employee engagement is starting to come onto our agenda. Being a good employer means having an open, honest and trusting relationship with employees. Head of Employee Research, telecoms organisation WHAT YOU SAY Develop the evidence While companies often had a strong programme to develop evidence of corporate success, there was often limited evidence of the other aspects of an employer reputation, especially stories that demonstrated the culture and values of the employer. Companies involved in the research took action to correct this by creating internal case studies of success, by formally publishing corporate values and by identifying and quantifying all the benefits of working for the organisation. Competitor research allowed employers to highlight the advantages of working for their organisation. Communicate Internally Existing employees form a critical stakeholder group. It is important that they feel they are working for an employer of choice. At least one of our respondents said they had proactively focused their advertising and PR to enhance their employer brand internally. Others talked about the importance of keeping an open flow of communication between employees, often using employee surveys as a way of testing attitudes towards the organisation. Telling 'stories' about best practice can help manage an employer reputation internally and allows employees to act as ambassadors for the organisation's employer reputation. Link External Communication All companies in our research said that their media profile was highly important to their work. Others referred to the importance of proactively managing all communication channels, with the recruitment process cited as a particular opportunity to build an employer reputation as well as hiring people. The critical channels for external communications are: The Recruitment Process - The messages and perceptions given to potential recruits can have a powerful impact on the rest of the employment audience. Employers need to be clear about the messages they want to send out and ensure that recruitment advertising, materials and particularly recruitment processes match these. Targeted Media - potential and existing employees use national, local and specialist press as a reference for their knowledge of the organisation. Opinions given in the media can hold great influence. As a result, employer reputation campaigns can be aimed at specific publications to suit the audiences that need to be reached. Media campaigns include the placement of case-studies, the development of spokespeople to comment on employment issues, and news about new and improved employee benefits. Another effective way of building an employer reputation cited in our research was to win an employer award such as The Sunday Times' 100 Best Companies to Work for award. 8

12 Influential Bodies and Individuals - For some roles it is important to engage with specific communities and dispel existing images. This may be because of previous bad experiences or simply because a change in company directions means there is a need to recruit from a new pool of talent. Examples include the way Ford engaged the Asian community in the UK in the 1990s, and how the Royal Navy has recently joined with the gay and lesbian organisation Stonewall to help it with more diverse recruitment. Existing Marketing Channels - promotional campaigns using advertising, direct mail or public relations can influence potential and existing employees. Several organisations now actively use these channels to promote their values as an employer. B&Q's television ads profile their staff, demonstrating their commitment to diversity. Even if promotional campaigns don't focus on employer reputation, the general messages should align with the general theme of the employer reputation being built. 'Human Capital Management' Reports - A recent recommendation from a Government-appointed taskforce was that companies should publish annual reports on their people development activities to complement Operational and Financial Reviews. This provides a powerful opportunity for a company to send out positive messages in all four key areas of Employer Reputation. It is important that this is not seen as a 'dry' financial document. It is vital that external and internal communications are linked, sending out the same messages to ensure the greatest impact. Measure the Impact A good employer reputation campaign should have effective measurement systems in place to check that activities are delivering the business results required. Most of the companies we surveyed use employee surveys, normally biannually, to assess internal changes in attitudes. They also monitor performance measures in human resources such as the cost of recruitment, time-to-hire, yield on offers made and the rate of retention of existing staff. Several use focus groups to assess the impact of particular communication campaigns, and monitor press articles written about the company. One organisation measures how potential recruits view the company even if they weren't offered jobs, allowing them to assess changes in reputation. The survey suggests that this is an area that poses barriers to organisations, with most admitting they should do more to assess the impact of changes. Two organisations said that lack of budget restricted their ability to do more research to more effectively measure changes in perceptions. 9

13 Managing your employer reputation with Communications Management Communications Management specialises in strategic consultancy and internal and external communication. Our work can take the form of any of the services listed below, or a bespoke project aimed at meeting specific employer relation needs. External reputation analysis This scan evaluates how the employer is perceived by potential recruits. Communications Management will conduct interviews with recent hires, applicants who chose not to take up job offers, and the wider body of potential applicants, as well as reviewing recruitment advertising materials. Internal reputation analysis This scan identifies the key strengths of the employing organisation and involves interviews with internal recruitment, marketing and HR managers and current employees to identify the reputation strengths and weaknesses of the organisation. Stakeholder mapping Working with the internal recruitment team we help employers to identify the individuals and groups that need to be influenced to improve the organisation's reputation as an employer. Possible stakeholders include local, national and specialist media, graduates, unions and professional associations, and current employees (who are often the strongest recruitment asset). Reputation improvement action plan Following the diagnostic phases above, we would feed back recommendations on the two most important aspects of your organisation's reputation as an employer: a) What you say - Is the organisation making the best use of existing strengths? Are the right messages being communicated? Are they being communicated well, and to the right people? Are they credible? b) What you do - Do individuals have a strong connection with the employing organisation that means they want to stay? Is the recruitment process being managed well? Our action plans can combine the implementation of internal and external communications programmes, and reviews of recruitment processes using our own consultants and our network of associates. Communications programmes can include: Content and story development Seeking out the stories that best confirm the key recruitment messages that your organisation needs to communicate, and developing written material that can be used in any of the activities below, as well as in advertising, recruitment brochures and on your website. Media relations The media - national, regional or specialist - is the most influential source of information for many jobseekers. We will place stories in key media that reflect the key strengths of the organisation and drive new recruitment. 10

14 External awards Achieving success at employer awards such as the annual FT's 'Best Workplace' or the Sunday Times 'Best Employer' award, has a tremendous positive impact on recruitment success. Communications Management works with organisations on written entries and internal communications processes where employee surveys are used. Online and offline community development Many organisations have contact details for stakeholders who can help with recruitment issues - previous applicants, interns, former employees and so on - but don't keep in regular touch. Communications Management can develop suitable communication tools to keep them in touch with your developments and new opportunities. These can include networking events, electronic newsletters or dedicated websites. Internal publications Replaying the 'people-based' content derived above internally is invariably more successful than sending a stream of technical updates or publishing interviews with remote global leaders. Done well, such publications can be highly motivational and also allow you to unearth further success stories. Below are some case-studies of organisations who have taken steps to manage their employer reputation. For more information, visit or phone References 1. Chartered Institute of Personnel and Development, Quarterly HR Trends and Indicators, Summer Capital Consulting, March See 4. MORI survey, In Search of Meaning in the Workplace, Linda Holbeche and Nigel Springett, Roffey Park, May Communications management survey of 300+ City workers, March See 11