Recession-proofing Employer Branding

What future for employer branding seems to be all the rage just now in the current recessionary context. The CIPD are developing a conference on this topic in May, which I've been invited to speak at (thanks Anita and Rebecca and hello from down under). As luck would have it, I was doing a presentation yesterday with two colleagues in Sydney - Paul Gollan and Kerry Grigg - for a mixed audience of practitioners and academics, where we outlined some thoughts on this issue plus a future for employer branding that we're currently working on. I'm not the best judge, but I think it went down reasonably well, so the drift of the presentation may be worth sharing with some of the readers of this blog.

The core of my argument and of a new paper we're writing is that employer branding is recession-proof in the sense that it was never only or mainly about talent wars/ talent shortages caused by bouyant economies, though recruiting talented people was and will remain an important driver. Part of the presentation yesterday was that the four drivers of employer branding and its impact on corporate reputations are still relevant in todays recessionary economic circumstances - the need for talent in knowledge economies and knowledge intensive organizations, the long terms demographic problems faced by most economies, the long term decline in employee identification with employers and decreasing levels of trust, and the rise of idiosyncratic careers built around individuals rather than organizations. What has probably changed over the past decade is that employee expectations of good employers have been slowly ratcheted up by organizations engaging in practices such as employer branding/employer of choice schemes from which they will find it difficult to disentangle. Yes, organizations may not be recruiting so much, particularly in financial services, construction, retailing and manufacturing, but the impact of how they cut costs by laying people off and how they continue to create positive internal images for existing employees (particularly those currently being blamed for the mess we're in) will continue to have a major impact on their corporate reputations.

By corporate reputations, I'm referring to some really big ticket issues - corporate branding, corporate governance and corporate social responsibility - which require deft handling to manage the inevitable tensions between the needs of organizations to be simultaneously different through corporate branding and legitimate ( or the same) through the exercise of good governance and social responsibility. In many respects, these are, or should be, the key drivers of strategy and the endgame of good people management. Having just finished reading Robert Peston's excellent book on 'Who Runs Britain', which is an insightful guide to the complex financial engineering 'rocket science and crude incentivization that has been at the heart of the current problems, I'm more convinced than ever of the need for HR and employer branding to address these issues.

However, there is another agenda that places techniques like employer branding centre stage and that is the innovation agenda. We've been writing quite a bit about this recently, but to cut a long story short, good evidence suggests that innovation relies less on investment in human capital (talented individuals) and more on social capital (creating bonding and bridges or social networks) and organizational capital (what's left when people walk out the door at night, e.g. structures, systems, processes and technology etc). If advocates of employer branding and the HR function wants to make an impact, addressing the innovation agenda (wealth creation) in knowledge economies by ensuring that such innovation is socially responsible and well governed (ie. risk managed) is the place to be. Our argument is that employer branding has much to offer in this direction - by helping create the necessary diversity of talent, social capital and social networks needed for innovation. But such branding will only do so if it is authentic and is rid of much of the brandwashing and marketing/communications spin with which it has become associated. And this is where Web 2.0 comes in - these tools have enormous potential for surfacing authentic and challenging employee voices in organizations as well as facilitating collaboration and networking beyond conventional organizations boundaries, both of which are drivers of organizational learning and innovation.

Not everyone agreed with these arguments, so it may be worth a discussion either on this blog or at the events such as the ones that the CIPD and ourselves are running with the IES.

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.