The reputation, brand and emotional capital of organisations is becoming increasingly important as employees begin to demand a similar level of service as they have come to expect as consumers, says employer brand specialist, Nicola Hunt.
Whether they like it or not, businesses are now answerable to far greater expectations than bottom line delivery. Driving this revolution in accountability is reputation, while recent corporate scandals have only added to the sense that the most precious asset an organisation has is its standing in the eyes of the public.
A matter of reputation
Reputations are painstakingly built and quickly destroyed, but their importance can never be understated. The value of companies in both Britain and the US is more than three times the value quoted on balance sheets, and this discrepancy is all to do with intangible assets – it is the reputation, brand and emotional capital of an organisation.
Reputation is a matter of steady, determined, intelligent living out of certain fundamental values and having the governance structures to support them There are no quick fixes. Reputation is a matter of steady, determined, intelligent "living out" of certain fundamental values and having the governance structures to support them. Yet how those values are communicated to key markets is a vital part of creating effective employer brands. Reputation involves presence; it involves carrying values to certain key stakeholder constituencies.
It is clear from things like the "Sunday Times 100 Best Companies to Work For" that being a generous employer is not just good public relations, it's also good for business, especially when times are hard. In a down-turn, a strong employer brand can improve employee motivation as well as help to keep top people on board.
The employee: the customer
In fact, recent research from the Work Foundation and Future Foundation highlights that employees are increasingly behaving like consumers when choosing to join or stay with an employer. The analysis states that a positive employer brand can be a way of differentiating one organisation from another and a way of creating a strong, distinctive and attractive identity with which current or potential employees can identify.
Today's leading employers recognise that it is essential to develop good people policies and to communicate these externally as well as internally. A number of top organisations now take a proactive role in ensuring that their brands as a good employer are widely recognised from the large retail recruiters such as ASDA and Tesco to global brands such as IBM and American Express.
PR is a matter of good HR
Crucially, no amount of good PR can "window-dress" the reputation of an organisation that is not investing effectively in its human resources policies or really listening to its people. Nor is it likely that a company would claim to have perfected its people policies. However, there is an important and positive employer brand message in the journey an organisation takes as it seeks to engage its stakeholders, encourage debate and develop new HR initiatives.
Nuggets of best practice, communicated effectively and illustrated through case studies and expert comment are key tools in helping to shape the reputation of an organisation as a good employer. The most effective approach is to provoke interest by creating debate through an issues-led approach in order to gradually build credibility layer upon layer.
This is usually achieved through strategically placed articles and comment and interactive opportunities such as select comment in forums and chat rooms. In this way, public relations can be used to underpin the launch of a new employee initiative, promote the annual graduate recruitment drive or emphasise an organisation's credentials as an ethical employer.
Recruitment advertising campaigns can also be used to incorporate below-the-line marketing activity through PR as a lever to help drive quality applications.
The board is muscling in on reputation
"Until recently, efforts to build and promote an organisation's brand as an employer of first choice was pioneered primarily by champions in the human resources and recruitment functions or by corporate communications and marketing professionals. Their passion and actions created a catalyst that drove the communication of the employer brand up the agenda and across the business. For the HR function, this has provided an opportunity to become involved in a key issue of strategic relevance for the Board – the management of its reputation as a leading employer.
However, a shift is starting to emerge in this status-quo as people issues rise up the Boardroom agenda. Increasingly, ownership for the reputation management of an organisation - whether through its brand as a good employer or in its investment in socially, ethically and environmentally sound policies - is driven by the Board.
This change was illustrated in the latest World's Most Respected Companies survey published by the Financial Times. It is clear that leading companies are succeeding in convincing a wide range of stakeholders including the media, that their commitment to their people and to environmental sustainability is real.
Companies that can succeed in building this type of trust understand the importance of strong governance, integrity and transparency and are able to effectively communicate their values.
From a practical point of view, driving such initiatives at Board level makes it easier to manage different stakeholder departments across a business, facilitating communication and defining clear boundaries in terms of ownership and goals.
A recent Deloitte and Touche survey questioning the CEOs and HR directors of 77 organisations about the role of HR emphasises the importance now placed on managing human capital. According to the findings, CEOs consider maximising the investment in people or Return On Investment (ROI) to be as important as having an effective overall strategy and more important than developing new or improved products or services.
Lining up the top priorities
Whilst CEOs and HR directors broadly agreed on their organisational priorities, choosing the same top 10 issues, they ranked them differently. Effective internal communication topped the CEO's list, but HR viewed this as their fifth most important priority.
As a result, only 22% of CEOs believed that HR was very effective at delivering strong internal communications. This provides HR directors with a real impetus to develop and improve the use of this vital tool and to better engage debate within the organisation.
Also, there is often a direct correlation between the investment an organisation makes in the internal communication of its people policies and the strategic investment it makes in actively promoting - or not as the case may be - these values to a wider external audience through planned communication campaigns.
There can be disagreement or confusion over who has responsibility for the operation of internal communications within an organisation. Although both the CEOs and HR directors in Deloitte's research agreed that this was a key priority for the business, at least half did not agree on who was primarily responsible for the area. This finding again mirrors the lack of clarity that often exists in relation to who is responsible for driving the external communication of an employer brand. Should the initiative be driven by corporate communications and the budget sourced from HR or vice-versa ?
My own experience and specialisation in this area leads me to believe that there are certain fundamental ingredients in successfully communicating the brand of an organisation as a good employer. All draw on the experience, skills, and processes that are demonstrated by HR on a daily basis.
The first is about listening. One of the challenges organisations face is to ensure that the investment they make in people policies is perceived to be of value by the people themselves. Organisations hoping to position their employer brand need to listen to and engage with what their people tell them. The messages may not be palatable, but they are the first step towards positive change in a rapidly evolving work environment.
From listening, comes dialogue. Dialogue is about encouraging stakeholder groups to define the employer brand issues – not merely comment on a company's norms and values. To be serious, organisations have to be willing to modify their stance based on what their stakeholders tell them. They are, after all, the ones in the best position to know.
Cosy assumptions and "greenwashing" are the enemy of honest reputations. Journalists want to know the whole story, warts and all. They are interested in the challenges an organisation has faced in reaching where it is now, as much as the success that it has achieved.
This leads to the third vital ingredient in brand building: honesty. The process can backfire if it is no more than window dressing and the employer's heart is not in it. The engagement of internal and external stakeholders is too important to squander on half-baked spinning operations.
Sir John Egan and Des Wilson, in their book on the rise of stakeholder companies, Private Business, Public Battleground said that it is about the values of a company, the kind of people in it, and the kind of ethical and other beliefs at its core. A company that loves its work, and loves the people it works with, will prosper.
The key to effective employer brand communication both internally and externally is in the honest communication of honest values. Over the long term and with the right advice, good companies will succeed while the ones that lack integrity will inevitably fail.