USING IT TO INCREASE EMPLOYEE LOYALTY HCI EXECUTIVE SUMMARY
INTRODUCTION Employer Branding campaigns that catch headlines often have hot slogans to attract young talent, and emphasize a cool culture, but employer branding goes much deeper than the ink on the page. It should be built to last, and not only attract new employees, but help retain the precious resources you already have in place. It s about the people in your organization and creating the kind of authentic relationship with your employees that spawns loyalty to propel your business forward in a tough recruiting and retention environment. During an April 2, 2008 webcast with the Human Capital Institute, Lizz Pellet, CEO of EMERGE International discussed how companies can utilize their employer brand to increase loyalty and return on investment. This paper will reveal results of some recent studies on employer branding, discuss the connection between company culture and brand, how to create an authentic employer value proposition, and outline the costs involved with branding campaign, as well as how to justify the spend to company leaders. THE CONNECTION BETWEEN CULTURE AND COMPANY BRAND WHY ATTRACT, RETAIN, REPEL? When companies take the time to understand and clearly communicate their culture, they have the ability to attract and retain the right employees, and repel the ones that just won t fit. Some companies try to replicate their consumer brand when creating an employer brand, while the two are aligned, they are not the same. The employer brand is a statement about what your company represents, the types of people you want on your team and the kind of work atmosphere you provide, while your consumer brand speaks primarily to your customers. Pellet has found that when companies take the time to get crystal clear about their culture, the employees that work there enjoy an authentic and congruent work experience, they ll stick around longer and they ll also talk to others about their positive experiences working for the company. We find that creating 2 USING IT TO INCREASE EMPLOYEE LOYALTY an employment brand in the context of your true organizational culture will make it a much more authentic and congruent experience, says Pellet. People like authenticity, so that when they enter the workplace, the employment brand that was sold to them actually bears true after they step in the door. Defining your company culture increases your ROI by drawing in the right employees and repelling those who are a mismatch. Many hiring managers dislike using the word repel, but considering the cost of one bad hire, repelling workers who don t fit at your organization can be very cost effective. The current war for top talent presents many challenges for organizations, in a variety of industries. This struggle to find the best fit is propelling many organizations to build a branding message that is congruent with their organizational culture. Companies are feeling increased pressure to produce more with less, manage cultural integrations during mergers, manage the Baby Boomer exodus, and attract and retain Gen Y workers and knowledge workers. These challenges can be dissipated by clearly defining your company culture and automatically drawing in the right talent. Your employment brand might be your best recruitment tool. EMPLOYMENT BRANDING STUDIES EMERGE International surveyed director-level marketing, recruitment and HR professionals at 100 companies regarding their views of employment branding; the results were somewhat surprising. They know employment branding is important, they say it affects and gives them a competitive edge in recruiting, they know it helps retain and attract top talent, and yet it s not a strategic initiative and they don t have budgeted dollars for it, says Pellet (see Figure 1). Eighty nine percent of respondents agreed that employment branding provides a competitive advantage in recruiting efforts and 85% agree that employment branding is important. However, less than half said it was one of their five strategic initiatives for the upcoming year and only 36% of the
respondents said they have budgeted dollars to work on their employment brand. Eighty-one percent also agreed that a cultural assessment would help them to understand the gaps in their company culture and its impact to retention and recruitment. Another data point of interest is that over 30% of the respondents answered Neutral (don t know, not sure) to the fact that their employment brand helps them attract and retain top talent. On the flip side, the cost of not attaching dollars to your employer branding efforts can be very high. Emerge found that the average company was losing two hours of productivity per day with each disengaged worker. Based on an average hourly wage of $15 and a normal Monday through Friday work schedule, a company with 1,000 disengaged employees could lose $15,000 a day in productivity, or $7.2 million per year. This number emphasizes the impact that employee loyalty, or lack thereof, can have on your company. GENERATIONAL CHALLENGES THE BOOMERS The first Boomer retired on January 1st of this year and according to the US Bureau of Labor, an estimated 30,000 boomers are retiring each day within the US. In 2010, we re expected to feel the full impact of this exodus. As a result, companies are using their employment brand to specifically attract and retain the Boomer generation. GEN Y Gen Y workers rely heavily on social networking. You re going to have to get out of your comfort zone to attract, retain and repel this population, says Pellet to companies trying to tap Gen Y. FIGURE 1 DOES EMPLOYMENT BRANDING PROVIDE A COMPETITIVE ADVANTAGE? Statement Agree Neutral Disagree Employment branding efforts provides a competitive edge in our recruiting efforts. Our company s employment brand helps attract top talent. Our comapny s employement brand helps retain top talent. 89% 9% 3% 67% 30% 4% 60% 33% 6% IS IT IMPORTANT TO HAVE AN EMPLOYER BRAND? Statement Agree Neutral Disagree Employment branding is important to my company. 85% 13% 3% Employment branding is one of the top five strategic initiatives for my company in the upcoming year. We have budgeted dollars for 2007 to work on our employment brand. 49% 30% 22% 36% 19% 45% Here are some alarming statistics on their use of social networking sites: MySpace, YouTube and pod casting are the new norms in communication between Gen Y rs There are 208+ million users on Myspace today that s as big as some countries and the numbers climb every day More candidates are utilizing Google to obtain information about companies before they apply or accept a job offer. There are 2.7 billion requests for information on Google every day Much to the surprise of some thought leaders, studies are showing that Gen Y workers can actually be very loyal, as long as they are engaged. They are looking for a authentic and congruent experience at the workplace. If a Gen Y worker is in engaged and included, they will perform well, they can be outstanding internal recruiters for your company, they will spread positive messages about the company, and they will tend stay longer, hence be retained. 3 USING IT TO INCREASE EMPLOYEE LOYALTY
CREATING A CONGRUENT AND AUTHENTIC EMPLOYMENT BRAND How does a company create a congruent, authentic employment brand? Leaders must create and sustain the company culture by communicating the vision, the mission and the values of the company. Then they will easily draw in employees who are aligned with the value system. If the company has a silent code of conduct that is inconsistent with the stated culture, employees will sense that as well. Employees feel how they fit in. For example, employees with very high morals and values might find it difficult to work for a large organization that has recently been involved in a public scandal. This type of disconnect between value systems affects employees on a very deep, personal level and it is difficult to overcome. The solution is to create an authentic brand that accurately communicates the company s value system. CULT-LIKE CULTURES Organizations with a cult-like culture have a very strong sense of who they are and who they are not, says Pellet. Based on seven years of organizational culture research, the 1999 book, Built to Last Successful Habits of Visionary Companies, stated that companies with a cult-like culture actually last longer. Examples of these types of companies include Southwest Airlines, Starbucks and UPS. They stand out by creating a very tight sense of belonging amongst their workers, they often have employee slogans, and they have easily recognizable brand images that evoke an emotional response reminding us of their company culture (see Figure 2). After the Fortune 100 was announced in 2007 they did a follow up piece on some of the companies featured. Once such interview was with a Nike representative, when asked if he could talk about the company culture he was quoted as saying how many companies do you know that 30% of their employees have the company logo tattooed somewhere on their body. That seems like quite a branding statement. Serving the brand in the context of who you really are is extremely, extremely important, says Pellet. Your campaign should include advertising any awards, or social responsibility causes (going green) relevant to your company on your career website. HR should work closely with marketing to develop the employment brand, since consumer brand and employment brand are closely tied. This is not something that should be done in a Human Resources vacuum, says Pellet. FIGURE 2 RECOGNIZABLE CONSUMER BRANDS EMPLOYMENT BRAND ASSESSMENT AND THE EVP Do you know how your company identity is currently perceived? Conducting a quantitative cultural and employment brand assessment can help you determine that. Deploy a metric that you can go back and measure against to help you track progress and ROI of new programs. Pellet suggests a review these key areas: The company s current identity Leadership style The types of relationships people have at the company How they communicate Company infrastructure Employee engagement Finance THE EMPLOYMENT BRAND PROMISE (or EVP) Creating an employment brand promise helps you define and communicate your Employment Value Proposition, which ultimately is your brand. Companies need to speak to the value system they have in place. The Employment Brand Promise will 4 USING IT TO INCREASE EMPLOYEE LOYALTY
help to reinforce external positioning, create a competitive hiring advantage, communicate what the company stands for, create brand loyalty and communicate the Employment Value Proposition to its employees (see Figure 3). It s important to not only identify organizational values, but to also define them in behavioral terms within the company. For example, each employee may define and exhibit trust in the workplace differently. Pellet recommends conducting a values assessment to see if there is consistency and awareness of these cultural values and how they are played out in employee behavior and belief system. FIGURE 3: Employment Brand Promise Aligned to and EVP Employee Value Proposition CONSUMERS AND SHAREHOLDERS EMPLOYEES Positioning an Employee Value Proposition is really about transferring what the company is going to give to what the employee is going to get. Figure 4 illustrates how a list of amenities such as on site, basketball court, game room and athletic club can FIGURE 4: be repositioned to the employee as so that you can Example of positioning your EVP Start each top line with we offer take a break and have fun at work. Another example is listing statements to create a more competitive salary and promotional opportunities so that you can grow with us and create the career and experience you want. Changing these meaningful visual for the employee and creating an emotional response speaks to the wants of the consumer your employee. The recommended timeline for delivering an Employment Brand Promise is: 1 to 3 Months Diagnostic, data collection, analysis 3 to 6 Months Establish Value Proposition, develop brand message, roll out initiatives 12 Months Redeploy diagnostic to measure progress and track ROI 1 to 3 Years Full alignment, significantly better business results, increased ROI of recruitment and retention programs WEB SITE AND JOB BOARD ASSESSMENT Conducting a simple assessment of your current website and your presence on various job boards can tell you a lot about where your company stacks up in communicating your employer brand. Pellet uses the Three clicks and your out rule. She says, If a potential candidate can not find what they are looking for within three clicks of getting to your website, the candidate may be gone and on to your competition. Your website should clearly communicate your company s vision, mission and values as well as reflect your company culture in some 5 USING IT TO INCREASE EMPLOYEE LOYALTY
way. When conducting a website assessment, consider if you would be attracted to work there yourself. Pellet notes that many websites use stock photos of employees, and it can be much more effective to use photos of real employees who actually work there. Also consider if you re using the right domain name, or if there is another domain your company should own to catch more jobs seekers in your target audience. For example, adding.jobs to your domain name will enable job seekers to find your career website with fewer clicks, and you ll hold their attention longer. Your company should stand out on job boards. Health Care is one example of organizations that are not differentiating themselves when they place ads for nursing positions; they simply emphasize a caring environment and they miss the opportunity to truly stand out. A review of the most popular job boards will help you assess how you re competing with other employers. According to Pellet, Careerbuilder and Monster are a bit passé, as local job boards are taking over. She suggests looking at your niche market or local job boards, and reviewing recruitment job boards that are stand outs, such as www.jobing.com. You can easily find companies that will shoot video for you, like www.vcruit.com and www.careervideo.com, check them out first as you begin to generate ideas for your own recruitment videos. Some of these new career video companies will actually come to your worksite to shoot video for you. Above all, your career video must truly reflect who your company is so that it will attract the right people to work for you. PUTTING DOLLARS BEHIND BRANDING EFFORTS To justify spending dollars on employer branding, consider the cost of replacing one executive in your company. Pellet suggests to her clients that they take the cost of one recent bad executive hire and multiply it by three; the ending number could easily justify a budget that can be used to develop your brand. Conducting a brand assessment through an Internet-based employee survey can cost between $2,500 and $18,000 depending on the number of employees, while a non-invasive scan of your environment (i.e. job postings, job boards, a website review, or mystery employee report of your 6 USING IT TO INCREASE EMPLOYEE LOYALTY company) might cost $2,500 $5,000. Producing recruitment videos may cost $2,800 for a very basic video using stock photos or can cost up to $22,000 for a live shoot lasting three minutes. Some new companies are jumping into career video shooting because it is the hottest new thing, but Pellet suggests sticking with companies that have been around a while and have a good reputation. View their work and talk to other professionals before signing up. CONCLUSION An employment brand isn t necessarily just a marketing tool to get a Gen Y or a Boomer or an X-er in the door, an employment brand is to express your employee value proposition, says Pellet. You don t have to try to create an employment brand message that speaks to four generations, but you should think about who your company is and what your company is offering as a value proposition. Creating an authentic brand and increasing employee loyalty starts by having an understanding of what your culture really is and what it is not. In a complex recruiting and retention environment, employer branding can be a very effective tool to attract and retain the right people to your company and repel the ones that just don t fit.
Based on the Human Capital Institute webcast, Employer Branding: Using It to Increase Employee Loyalty, April 2, 2008. PRESENTER Lizz Pellet, CEO EMERGE International Fellow Johns Hopkins University Lizz Pellet is the author of Getting Your Shift Together: Making Sense of Organizational Culture and Change Introducing Cultural Due Diligence. Lizz is a recognized national conference speaker and has presented over 40 professional learning sessions in the past three years. EMERGE International is a California based consultancy firm dedicated to improving the ROI of organizational culture, employment branding and transformational change efforts. In 1998, Lizz pioneered the development of the Cultural Health Indicator (CHI), a validated organizational culture diagnostic instrument. In 2007, she introduced the Brand Enhancer, a comprehensive solution that combines culture and employment branding. Clients include Abbott Laboratories, Mayo Clinic, American Express, Phoenix s Children s Hospital, Physicians Mutual Insurance, Yahoo! and many others. MODERATOR Christine Abbatiello Director, Talent Strategy Community Human Capital Institute Christine Abbatiello serves as the Director of the Talent Strategy Community at Human Capital Institute, bringing to the organization nearly fifteen years of industry experience in human capital. She is committed to the concept of providing the most in-depth research and knowledge content to this broad and diverse community. An honors graduate of Colby College with a degree in English Literature, Christine was one of the original employees of Answerthink/The Hackett Group. In her five years there as the Director of Executive Recruitment, she helped grow the organization to over 2000 associates and developed a full integrated talent management program. Additionally, she has worked in corporate strategy, corporate and agency recruitment and industry consulting before joining HCI in 2008. Christine is committed to the concept of giving back to the community, and served as a volunteer employment transition advisor after the 9/11 Terrorist Attacks and Hurricane Katrina. ACKNOWLEDGEMENTS This White Paper is made possible by JWT Inside, sponsor of HCI s Attracting, Qualifying, and Selecting Top Sales Talent Learning Track. ABOUT JWT INSIDE JWT INSIDE helps organizations advance employee engagement through comprehensive advertising, marketing and employee communications services. Measurement tools, consulting resources and strategic approaches are employed to put the right people in the right jobs and keep the workforce engaged. The agency has 12 offices and 9 satellite locations across North America and internationally. It is a subsidiary of JWT, the largest advertising agency in the United States and the third full-service network in the world. Its parent company is WPP (NASDAQ:WPPGY). Visit www.jwtinside.com for more information. ABOUT THE HUMAN CAPITAL INSTITUTE The Human Capital Institute is a catalyst for innovative new thinking in talent acquisition, development and deployment. Through research and collaboration, our programs collect original, creative ideas from a field of top executives and the brightest thought leaders in strategic HR and talent management. Those ideas are then transformed into measurable, real-world strategies that help our members attract and retain the best talent, build a diverse, inclusive workplace, and leverage individual and team performance throughout the enterprise. 7 USING IT TO INCREASE EMPLOYEE LOYALTY