Wednesday, 26 November 2008

Employer Branding in China

On the last leg of a marathon, which has finished in Beijing. I'm the guest of a joint venture between our centre in Glasgow and a newly established, practitioner oriented research centre in Bejing. The Cente for Employer Branding and Reputation Management is a collaboration between Peking University (the number one university in China), (one of the largest recruitment consultants in China) and CCTV, which produces the 'Best Employer in China' awards. Such a coming together of big brands in China is testament to the emerging interest in this concept (somewhat similar to Australia in last blog), as was the three hundred or so HR executives, graduate students and staff who turned up to a conference on the subject where I gave the keynote speech and received a visting professorship from Peking University.

The Chinese project is being led to my long time colleague, ex-PhD student and co-author, Dr Hong Zhang, who is currently editing a book on employer branding in China, due out late next year. My impressions from meeting with colleagues are that employer branding and reputation management are concepts that will take root in this most complex of societies. There are two reasons underlying this prediction. The first is the concern with image and identity, which, according to colleagues, is a major issue with employers in China. Consulting report after consulting report lists image and reputation as major pre-occupations of Chinese CEOs. Part of this interest seems to be a result of a lack of confidence among Chinese companies, and part is due to the second reason - the talent management agenda.

Talent management - attracting, retaining, motivating and engaging people - still remains a major issue in the big cities in China, despite the downturn in economic growth (accurate statistics on this issue are not easy to come by). A recent McKinsey report on talent management in China seems to support this impression, which is also the belief of my new colleagues in the Centre. I'm based in an hotel located in a science and technology centre next to the two big universities in Beijing, which has every big technology company in the world resident on its huge science parks. These companies require talented people and the Chinese universities cannot put them out fast enough; nor can they deliver the right levels of quality to turn this country into the knowledge-based economy in aspires to. As a consequence, Chinese companies are beginning to operate in global labour markets for talent, and its shows. Compared to my first visit fifteen years ago, the number of non-Chinese working over here has grown enormously, so much so that they have begun to locate themselves in the equivalent of 'gated communities'.

This new venture has plenty of interesting questions to ask of employer branding and talent management, and I look forward to helping them.

Friday, 21 November 2008

A Great Week with Australian HR Professionals

I've just spent a spectacularly enjoyable and informative week with more than 250 HR professionals in Australia in Melbourne, Brisbane and Sydney as a guest of ADCORP, one of Australia's largest marketing and communications firms. ADCORP specialises in employer branding, and during the course of interaction with their consultants and clients, it soon became apparent that they do some very good practitioner-oriented research and creative work in this field. As part of their programme to support their clients and to learn more about what academics have to say about these issues, they asked me to lead a number of sessions on employer branding and on other HR-related issues I'm currently researching, e.g. strategic leadership, Web 2.0 etc.

From these sessions, a number of items re-occurred. These are worth summarising for the people who attended because they and others may have better answers to the questions than I do.

The first is something we wrote about in 2003, when we produced the CIPD's first research report on employer branding: 'What's in a Name'? There is no doubt that, in some knowledge-based, professionally dominated, industries - healthcare, professional services, consulting engineering and education, what's in a name really matters. This was confirmed by a number of discussions, during which branding was seen to connote spin and anti-professionalism among key managers and professionals. On this issue, my argument has been for some time that the notion of reputation management is more likely to appeal to internal stakeholders in certain companies/ industries and probably more accurately reflect what the process is about - underscoring legitimacy in external and internal labour markets for good governance and leadership, ethical practices and CSR, as well as creating difference in these markets through branding.

The second notion that seemed to strike a chord was the need for HR to be the guardians of 'authenticity' in employer branding. Employer brands which aren't rooted in what really matters to employees and potential employees are unlikely to be effective. Indeed, these top-down 'designed' brands are more capable of creating cynicism through perceived attempts at 'brandwashing' and dissappointment among employees through overpromising and underdelivering. One of the lessons is that HR needs to drive employer branding to prevent it being dominated by corporate communcations and marketing, functions which often struggle with the notion of bottom-up design or co-creation.

This issue raised an important discussion around segmentation: should and can organizations tailor EVPs to segments, and on what basis should we construct segments? Among the many interesting discussions we had on this topic were ones related to how far you go with segmentation and how do you relate segments to high performance, and to what extent do you privilege the 'global' over the 'local'. A number of organizations have begun to segment their employer branding on the basis of lifestyles, but do EVPs that appeal to lifestyles produce significant benefits for organizations? Also some organizations are wrestling with the problem that idenity and employer branding are essentially local phenomena, yet organizations seek to impose and privilege the corporate brand over the local brand (perhaps reflecting the dominance of marketing and comms). Is this the right way around for employer brands in frequently culturally diverse businesses? Or should we go for the equivalent of endorsed branding strategy, which is sometimes used in customer-facing corporate branding? Again, context is all important; there is no 'one best way'.

A third issue was the role of leadership and its impact on branding. It was clear from discussions that the idea of leadership branding was seen as an integral part of employer branding. Either because leaders have an important influence on the reality of employer branding through their actions in 'walking the talk' or other wise, or because we expect them to, the reality is that leaders (and recruiters) really matter in how people externally and internally experience employer branding. So, should employer branding always incorporate leadership branding?

A fourth issue was measurement. Very little is done in this direction, though for nearly all participants measurement is an absolutely critical issue in making a business case and in evaluating effectiveness. So, we had a lot of discussion around the notion of how to measure employer brand equity through psychological contracting, surfacing images, brand awareness, and some of the more conventional recruitment and retention metrics. For employer branding to really take-off (and for HR credibility), measurement has to be a lot more effective than has hitherto been the case, even allowing for the fact that what is measurable isn't always meaningful and the value of intangible assets.

A fifth issue was the importance and use of the term, Gen Y, which is more widely discussed in Australia than it seems to be in the UK (where the demographic problem is more about managing an ageing workforce). As we have pointed out in recent publications and will do in our forthcoming report for the CIPD on Web 2.0, Gen Y is a crude term than may do more damage that good. The problem seems to be associated with the 'fallacy of misplaced concreteness', in which shorthand labelling (of often diverse groups) begins to have real consequences; the more we think of the younger age groups as Gen Y, the more we treat them uniformally as Gen Y, despite the wide variation of lifestyle and behavioural differences within this group. So, do we need to be a bit more sophisticated in our research?

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.

Corporate reputations, images and identity: how theory can help practitioners

I’m just about to begin a two-week stint running some courses and doing presentations on HR’s contribution to branding and reputation management in Australia and China. As always, I’m on the lookout for interesting material from academics to help me provide some insights into these important topics; hanging around airports and spending time on long plane journeys gives you plenty of time to do just that. So I brought with me the new edition of the Corporate Reputation Review (Volume 11, number3 for those interested). This special edition brings together leading people in the field of organizational identity to write about their emerging frameworks and data. In this increasingly arcane field, this special edition produces some gems. Though the papers are difficult to decipher, even for academics versed in the language of social identity and social actor theory, they yield some blindingly obvious-in-retrospect insights that cause me to re-think some of my ideas on employer branding, some research and consulting work we are doing in the field of employees’ images of healthcare organizations, and the nature of the HR.

The first is an examination of the well-worn distinction in the literature on reputation management between organizations’ needs to be simultaneously different and legitimate in terms of their organizational identities, the characteristics of which are their central, enduring and distinctive attributes (CEDs). Brayden King and Dave Whetten (the latter always a great bet for new insights) suggest that this ‘paradox of identity’ can be thought of in a rather different way than has hitherto been the case. Traditionally, this tension has been seen in terms of organizations attempting to solve seemingly incompatible needs for being different (i.e. branded) from competitors in product and labour markets but also being similar (social legitimate) to their comparators (e.g. being socially responsible, adhering to legal and governance standards, etc).
King and Whetten’s insight – rather obvious when you think about it - is that these needs are linked by the notion of ‘accountability standards’, which define norms of both appropriate behaviour (legitimacy) and esteemed performance (reputation).

Thus, when an organization seeks to become or remain a member of a business/ industry category, say a healthcare provider, it has to meet the minimum expectations of external and internal ‘audiences’ for patient care and the delivery of public value – the necessary, legitimacy-based conditions for membership. However, to become an esteemed member, it has to meet the ideal or aspirational standards of that group of businesses/ industry (reputation). The two, of course, are linked in the form of a continuum from minimum standards to ideal standards. And, because they are linked, changes in one have an impact on the other and vice versa. So, for example, as our expectations of the minimum standards of an employer change in relation to what might be expected, say, of an ‘employer of choice’, this leads to a ratcheting-up of our expectations of the ideal standards of an employer of choice - in other words, employer branding becomes a moving target. Similarly, as organizations compete harder to become employers of choice, such competition leads to a ratcheting-up of minimum standards. The probable results of this last dynamic is that the previously held ideal of an employer of choice becomes the the minimum table stakes, because audiences focus on, and increasingly use as their benchmarks, these prominent players in their industry and exclude reference to others.

Applying this line of thinking to the legitimacy and reputation of the HR function itself, you might be better able to understand how excellence in HR is no longer just associated with meeting the standards associated with cost control and service delivery to internal stakeholders, its two traditional and necessary functions (see Martin, Reddington and Alexander, 2008). Nor, we argue, is it good enough for HR to meet the aspirations of being ‘strategic’ (i.e. to contribute to corporate needs for innovation, customer satisfaction, productivity through high performance work systems, etc) , which has now become the prototypical expectation for HR excellence. Instead, HR needs to focus on the long term reputation and legitimacy of the organization itself by contributing to corporate branding, corporate governance and risk management, corporate social responsibility and ethics, and the creation of intellectual capital. These are all intangible assets, which, according to the well-known economist John Kay (2005), are the reason ‘why some nations are rich and others remain poor’.

The downside of this process, however, is that the market and competition over organizational and even professional identities leads to ever more risky behaviour, in much the same way that competition in financial services has seen firms develop riskier products and riskier HR strategies (talent management and bonuses). What will HR need to do next to help organizations become an employer of choice, and to become a function that rates high in the credibility stakes with CEOs?

The second article is by Kristin Price (who tragically died recently) and Dennis Gioia, both of whom featured in a recent blog. This time, their specific contribution is to raise the question: how can organisations improve their images in the marketplace for images – that is, among customers, employees, the media, prospective employees, shareholders, governments and the like? Building on their previous work on the notion of organizations having multiple, intended and unintended images, they propose the notion of the self monitoring organization. This concept is borrowed from the literature on individual differences. So just as high self monitoring individuals have to be vigilant about the multiple images of themselves (their own self concept, professional images, family members’ images etc), so high self monitoring organisations use a range of strategies and individuals to further the organization’s interests in reconciling self image with others’ images (the press, employees, prospective employees, shareholders, etc). Most of these are well known – brand ambassadors or even bloggers who are high in self-monitoring and become the eyes and ears of the organization, newcomers not yet socialised into the system, boundary spanning functions such as marketing, communications and, yes, and outward looking HR function, social networking and leadership liaison functions, which interact with outsiders, etc.

Two critical points emerge from this paper. The first is to expect multiple images in organisations and leadership difficulties in understanding them, especially if they aren’t high self monitoring as a group. The second is the problem of managing organizations with purposively different intended images, for example, a merger between two quite different companies even in the same industry. Both of these problems can be solved, to a degree at least, if organizations become high in self monitoring. As an afterthought, it in self-monitoring that Web 2.0 can make an enormous impact in helping act as the eyes and ears of the organization – another connection between technology and branding.

Tuesday, 4 November 2008

HR and the Governance Agenda

As part of our corporate reputations and HR agenda, I've been working on a chapter with a close colleague for a new book edited by Suzanne Young on governance. The chapter will focus on the links between HR and the governance agenda, but will do so from a public sector perspective, where governance issues are equally important.

Part of the reason for the book chapter stems from the current economic crisis, which, in part at least, is a crisis of governance. A few years ago, we wrote a case study on the financial services industry, which was sub-titled 'An industry fit for the future?' In that case we questioned the role of incentives in creating an industry driven by new business and new products rather than by servicing existing customers. Well, the forecast implied by the question in the title was along the right lines, with incentives, greed and lack of governance playing a role in most explanations of what has happened. So the challenge has to be raised, to paraphrase Bert Spector's classic paper on Enron, was HR the 'unindicted co-conspirator' in the demise of financial services?

To return to the public services, our work with some senior HR directors in the NHS in Scotland has led me to think about the links between how HR governs itself, and how that plays into the so called 'three pillars of governance' in healthcare - staff governance, clinical governance and financial governance. It has also led me to think about just how central an issue this is since governance seems to be about balancing innovation and risk in all three pillars and in the HR function itself. How HR organizes itself and is incentivised to be simultaneously creative and risk-conscious can have an enormous impact on how well employees experience their organisations as employers of choice, embracing principles of fair treatment, a say in decision-making, development, a good working environment and supportive leadership (staff governance). In turn, this has obvious consequences for clinical governance, which is concerned with balancing innovations in healthcare with patient safety, especially in so far as staff are fully trained and committed to caring/ prevention goals.

However, where HR at senior levels can really make their mark is at the corporate (read financial) governance level, providing advice and help in the selection, development, performance management and incentivisation of boards. As we have seen in the financial services sector, the culture of an industry and the organisations that represent it are shaped by leadership actions and the values they espouse. Consequently, HR and people management has a key role in to play in promoting their organisations as representatives of 'higher values' rather than just 'hired hands'. So, resurrecting the arguments of Karen Legge, my position is that HR needs to think less about being strategic partners (pace Ulrich) and more about more about becoming managers of reputations - for being simultaneously different (the branding agenda) and legitimate (the governance, ethics and CSR agenda). Any thoughts?