Saturday, 1 August 2009

New Futures for Employer Branding

I'm doing a number of presentations on employer branding at academic and practitioner conferences over the next month or so, beginning with a symposium with colleagues on 'Current Controversies in Recruitment and Selection' at the Academy of Management (AOM) in Chicago this coming Friday. At that session I'm going to outline what employer branding is about, how the recession has changed the focus of HR and people management, and thus the need for employer branding, and how employer branding can contribute to a bigger agenda of strategic and business model change (incidentally, I'm also going to participate in a session at the AOM run by C.V Harquail, the creator of Authentic Organizations on blogging for management academics, which I'm really looking forward to).

Three inputs into that session are relevant. The first is our consulting work with some excellent colleagues at Holcim, Getinge and the NHS in Scotland, from whom I've learned so much. This has reinforced my conviction that you never really understand business and management phenomena until you have been involved in changing them, which is one of the compelling reasons for academics becoming involved in clinical work and action research. The second and third are the most recent CIPD statement on Employer Branding: Maintaining momentum in a recession' which Rebecca Clake wrote and to which I contributed to during some roundtable discussions with senior practitioners, and a paper I've just finished with Paul Gollan and Kerry Grigg from Australia, entitled 'A Future for Employer Branding? Dealing with Negative Capabilities in Strategic Human Resource Management', which my colleagues are going to present at a conference in Sydney later this month. Not surprisingly, some of the messages in these two publications coincide'. The CIPD paper makes a case for employer branding becoming a business imperative. At one of the advisory group sessions from which the CIPD report was produced I argued for the need to link employer branding to big ticket items such as leadership and innovation, which has been taken up in the report and is one the themes in our new paper on the future of employer branding in tying it to strategic and business model change.

In this paper, we have tried to deal with the problems that complex organizations, especially but not only, multinationals face in dealing with the integration-responsiveness problem, part of which turns on how to deal with how to be global and local at the same time. In doing so, we've set out a new framework for thinking about what strategic human resource management might mean, highlighting two contradictory logics that drive strategy making in organizations in opposite directions. The first is to be distinctive, which takes them down the route of identifying business unit level strategic capabilities that make organizations truly unique, and the A positions and players that are critical to these strategic capabilities. In turn, this leads these organizations away from one-size fits all HR strategies and best practice and global employer brands towards more of a focus on exclusive talent management policies and segmentation of the workforce and specific employer value propositions/ branding messages for these groups, especially the A players (see earlier blog on linking employer branding to strategic HRM)

The other logic drives organizations to be legitimate in the eyes of others and society at large. This logic sees strategic decisions as influenced by a need or drive to be similar to others. Sometimes decisions are driven by the need for legitimacy, sometimes they are driven by an historically shaped 'industry recipe' for success that managers use as a model against which to judge their decision-making in uncertain conditions. The result is that there are strong pressures to imitate others’ strategies and values, supported by intensive networking among managers (and HR specialists), recruitment of business leaders from a relatively small cadre or talent pool that lead to bandwagon effects, coercive comparisons in the form of benchmarking best practice against other firms, and national legal standards or codes of conduct in accounting, governance and CSR drive companies to achieve legitimacy by becoming similar. This logic ensures that firms develop a strong corporate value system, often for investor s’ consumption, and to control potentially rogue subsidiaries that might damage hard won corporate reputations and brand equity through opportunistic but ultimately self-defeating behaviour for the corporation as a whole.

The SHRM implications of this drive towards corporateness are of firms becoming similar in their branding, thus seeking to become employers of choice with a global employer brand and ‘best practice’ high performance HR architectures (high performance work systems +the Ulrich model). The audience for many of these best practice messages are largely external – to sell a message to investors, governments, customers and potential employees that they are engaging with a well run, legitimate company that is as least as good as others. It also helps existing employees identify and engage even more with the organization because identity and engagement are formed by what these employees think significant outsiders feel about their organization - their so-called construed image.

The obvious point to make on the legitimacy logic is to ask the question that Michael Porter might ask: where is the differentiation in doing things the same as everyone else?

Three further sets of tensions of negative capabilities result from these contradictory logics:

1. The tension between corporate and local identities. Global companies seek to exercise control over identities because of the need to have business units and their workforce ‘on message’ with the corporate logic, global cost leadership and corporate stakeholder management. However, philosophers and management scholars have argued identity is essentially a local phenomenon and has to resonate or be authentic with employees and other local stakeholders because both are a product of local cultures. So localisation of identity requires organizations to be in tune with local employees and other stakeholders and to encourage constant expressions of employee voice and speaking truth to power, an argument recently receiving UK government backing from the MacLeod Report on engagement.

2. The tensions between exclusive and inclusive HR strategies. The exclusive approach to talent management that focuses on the few at the expense of the many has its critics for ethical, economic and rational reasons. Especially in European economies, including Britain, that have a heritage of integration among firms and employees and different values from the USA as a recent Economist poll on Anglos-Saxon attitudes has so vividly illustrated, the liberal market philosophy on which this exclusive talent management approach is based is a difficult pill to swallow for many organizations, managers and employees outside of the US.

Even within the USA, however, there is strong evidence that the exclusive version of talent management hasn’t worked well and, given the unpredictability of economic environments, can’t work well. Groysberg and his colleagues have produced a number of series of articles showing the negative side of the ‘star’ system which the exclusive version of talent management has helped fuel. And, has Anthony Hesketh has argued, the metaphor or a talent pipeline with the implication that talent management can be planned might be more realistically replaced by a metaphor of the talent sieve, with leaks appearing at many junctures because of the failure of organizations to manage careers through the pipeline and because of declining levels of loyalty among talented employees who have got the message delivered by acquisitive organizations that job change is the fastest route to salary increases.

3. Tensions between human and social capital and innovation. Arising from the previous discussion, HR initiatives and other management techniques and functions are increasingly being judged against how they impact the innovation agenda in these organizations. Research has shown that the 'collective IQ' of an organization, the latter of which is the basis for innovation, depends at least as much and probably more on social capital investment than individual human capital investment, which is what talent management and employer branding have traditionally focused on. So as well as investing time and effort in recruiting talented individuals, the role of human capital investment, organizations also need to focus on social capital by strengthening internal bonds among employees and by creating strong organizational identities (addressing the ‘who are we’ question as well as the ‘who am I’ question).

Implications of the Future of Employer Branding. So what are the implications for the futures of employer branding and how can it be used to resolve these dilemmas of SHRM and identity management? We suggest there are three changes in direction needed: a focus on authenticity, privileging the local, and a focus on social capital.

Focus on authenticity. It needs to rid itself of its image of being something that is designed by HR, marketing or corporate communications departments for others, especially among buisness unit managers and employees of large corporates, towards being locally responsive and authentic. Authenticity has become an important concept in recent management literature in fields such as leadership and marketing and needs to be at the heart of employer branding for it to help resolve the dual logics of SHRM.

In our Sydney paper, we have written about an HR strategy-as-practice approach that attempts to reconcile the tensions between the two logics of distinctiveness and similarity/ legitimacy. This requires that we understand who all parties to the strategy-making process are (a much wider group of people in organizations than senior managers and officially designated strategists), how they act and what resources they draw on they participate in helping create and implement strategies and, by extension, business models. Thus effective employer branding should begin by learning about the authentic voice of different groups of employees and managers at all levels and locations inside and outside of the organization. On this point, we have made the case in our CIPD report for new, free-form, open access Web 2.0 tools such as blogging, on-line discussion forums and social networking to enable authentic employee voice. We regard these new tools as more effective, or at least complementary, media for enabling employee voice than traditional organizational surveys.

Privileging the Local. Our argument for greater authenticity in employer branding compels us to focus on the local and on the logic of difference. This is not only because identity is an essentially local phenomenon, but, as we have noted, so are strategic capabilities, transformative business models and the HR architecture that supports them. In practical terms, this means privileging the local at the expense of the global in terms of creating authentically meaningful employer branding and employee value propositions. The outcomes may look no different from those that might result from a traditional top down exercise infused by the logic of similarity, especially since the process may be loosely framed in terms of broad aspirations of values or a corporate identity that organizations would like to be known for. However, an HR strategy-as-practice approach suggests the outcome is less important than the means by which it is arrived at.

As we have argued elsewhere, however, ‘the weight of evidence…suggests that the top-down, corporate global message continues to be the dominant one, which often represents considerable previous investment in ideas and programs, and, hence, an inbuilt reluctance to change course or experiment’. And, as we have noted in this paper, top down employer branding reflects the compelling logic of similarity, the benefits of integration and strong institutional and rational pressures to remain top down, including the desire to build global customer facing brands, pressures to meet international governance standards, investor demands, global performance standards and HR business processes. As the similarity logic requires, it is not only local responsiveness and authenticity which needs to be taken into account; there also needs to be a balance between the needs for and benefits of integration . A key element of HR architectures is employee engagement, which rests on defining the kinds of beliefs, values, attitudes and actions that employees are expected to hold and display, both at local and corporate level. This is part of the corporate function of employer branding, to ensure that it moves lockstep with business model and strategic change, not in parallel to it.

So, in privileging the local we are not arguing for a neglect of corporate or global values and branding, but rather that they should be ‘equivocal’ to allow employees at local level considerable latitude in creating local expressions of these values, authentic identities and meaningful strategies for themselves, and in doing so benefit the corporation as a whole.

A focus on social capital. Finally, we stake a claim for employer branding’s potential contribution to building bonds, bridges and trust, the key elements of social capital, and not just focusing on the creation of human capital. Social capital as a complementary asset and enabler of human capital and as a precursor of intellectual capital and innovation has become amongst the ‘biggest games in town’. And innovative business model change and product-market innovation needs a clear explanatory framework of how HR integrates with such changes, which provides an essential justification for employer branding role in learning about and communicating a strategic discourse that binds individual, team and organizational identities – the glue that holds organizations together - during periods of change.

Since social capital is also dependent on building bridges among employees and business partners, employer branding can help innovation, business model and strategic change by extending its traditional focus from those employed on a ‘contract of service’, the traditional employment contract, to those ‘contracted for services’, often pejoratively described as the contingent workforce. Employer branding can also contribute directly to the innovation agenda by encouraging authentic voice in organizations as I've argued above.

To conclude this rather long blog, if you find any of these arguments appealing or contentious, please - all comments on our views are welcome. Andif readers of this blog are keen on seeing the full paper, please contact myself, Paul or Kerry.


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Graeme's HR Blog said...

Many thanks for your kind words. Hope your blog goes well; just had a look and see that you've just begun. The last post may be of interest.

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