Friday, 14 November 2008

Employer Branding in a Recession

I'm increasingly being asked to comment on the need for employer branding in the current economic circumstances? Just how relevant is it when the context for the 'war for talent' has changed? So here's my take on this.

Prediction in an increasingly unknowable world is fraught with problems, as books like the Black Swan point out. I'm not trying to play the recession down because for many people and industries, it is - and will become - very severe. However, there are a few longer term trends which seem to suggest that employer branding may become even more relevant than before.

The first point to note is that employer branding is not just, or even mainly, about attracting new talent but is also about engaging, motivating and retaining existing talent. And these processes are subject to the same kinds of dynamic expectations among employees that I noted in the last post. Most of the good evidence on engagement suggests that organizations in general are not getting any better at this, despite the enormous investment in ever more sophisticated HR techniques. In part, I suspect that this is because these self-same HR techniques and the promotion of so-called best practices are leading to a ratcheting-up of expectations by employees of what constitutes a good employer. The more exployers are drawn into branding, the more the ideal standards they promote influence minimum standards of legitimacy in this field. This ratcheting-up influence is likely to become even more exaggerated as evidence on the ideal standards among prominent firms in the 'employer of choice' game become seen as the norm as a consequence of heavy promotion in the business media. So the criteria for what may have been seen as an employer of choice a number of years ago becomes the the necessary table stakes, even in a recessionary context.

Second, demographics worldwide point to ageing populations, decreasing numbers of young people entering the labour force and changing expectations among those young people that do. These three demogrpahic trends may well be shaped by recessionary economics but suggest talent wars will not diminish in the medium to long term, so organisations that ignore them will only succeed in storing up problems for themselves by neglecting their external and internal images as employers.

Third, in every recession I have experienced over the last thirty or so years, there has always been a shortage of talented people in certain occupations, and the knowledge-intensive nature of industry and competition in developed (and, increasingly, developing) economies will just add to that problem. As intangible assets become an ever more important strategic driver for organizations, so -called talent wars are unlikely to diminish (which is evidenced by current reluctance among financial services to give up their much maligned bonus practices, one of the probable causes of their current problems - see a case we wrote in 2005 on 'The Financial Services Industry: Unfit for the Future' in our Corporate Reputations Book).

So, I'm not saying that the recession will have little impact - of course it will. However, organizations that have invested in employer branding should continue to do so, and those that haven't may need to think hard about how they compete in labour markets that are affected directly and indirectly by demographics, knowledge-intensity and ratcheting expectations.


Anonymous said...

I found your book extremely useful and informative in writing my recent MBA dissertation (I'm one of Gary Davies' students). I share the view entirely that organisations need to be investing in their employer brand as much now as they were before the onset of the economic turmoil - otherwise they've probably not really understood the value of their employer brand in the first place.
I have just set up my own blog site and would be delighted if we could share views on the subject in the future.

Graeme's HR Blog said...

Many thanks Simon. Pleased you have found the book useful. I know Gary and have done some work with him. His work has been very good and he's now moved into look ing at employer branding. We'll probably hook up later to write something together. Will link your blog, so good luck. I find it useful to blog, particulalry for students and for me when I re-write the books I've done recently.