Ipsos Corporate Reputation

Employer branding – corporate reputation and the war for talent

Having a strong employer brand is crucial to corporate reputation, giving companies not only a recruitment edge in the growing talent war but also the highest-quality long-term ambassadors to deliver on their brand promises.
Employees are more demanding than ever when it comes to what they expect from their employer but this is not purely down to Millennials; employees at all life stages want a career with a deeper purpose.
Getting it wrong and failing to deliver on the employee brand expectation can have consequences that extend well beyond employees; consumers too are demanding more from corporates.

For Council members, there’s little doubt that high-quality employees are a crucial ingredient in any strong reputation. However, the relationship plays out as somewhat of a chicken and egg scenario; organisations with the strongest reputations attract and retain the best talent, and organisations with high-quality and engaged workforces have the strongest reputations.

As one Council member put it, “a brand is what a brand does” and it is employees who bring a brand to life.

So, in building and maintaining strong reputations, it is essential that companies both attract the very best talent to represent their brand, and genuinely engage that talent so as to retain the benefit to the company over the long-term.

The importance of employer branding to reputation.

An increasing focus on the importance of employer branding means that it is no longer the sole domain of HR, and, instead, corporate communicators are increasingly applying an employee – both current and potential – lens to everything they say and do.

Further, in the age of radical transparency, social media means that employees themselves are more visible to consumers, and therefore to potential employees, than ever before. Employees’ voices can be transmitted directly to the public, bypassing any opportunity for corporate censorship and, as a result, these voices are often considered more authentic and believable than the carefully crafted messages that come from communications professionals.

It is in this context that employer branding has increased significantly in strategic importance, now often having high levels of CEO involvement. Indeed, 84% of Council members have seen employer branding become more important over the last five years.

Changing employee expectations

Council members contend that in today’s corporate environment, employees have the ability to drive a company’s strategic direction with their expectations. A very practical example is the way many organisations have responded to employee demands for changing workplaces by relaxing previously strictly formal dress requirements to allow staff to, within reason, dress how they’re most comfortable.

At a more fundamental level, there are increasing demands from employees for transparent and honest conversations about what the company is doing, why it’s doing it and what the social and political implications of the behaviour are. Further, Council members report that the glossy and well-packaged internal comms that corporate communications teams have become so adept at creating are now failing to satisfy this employee appetite, because of what is seen as a crucial lack of authenticity.

The warning is that failing to meet these demands, whether they be centred on dress-codes or authentic communication and engagement, can leave employees disillusioned by the behaviour of big corporates and open to exploring their increasing options to live out the careers they want.

"WE ARE FIGHTING IN THE WORKPLACE FOR GOOD EMPLOYEES WHO HAVE GOT GOOD SKILLS AND WE ARE FIGHTING FOR EMPLOYEES IN THE WORKSPACE WHO ARE LESS COMMITTED TO A CORPORATE. PEOPLE ARE NO LONGER COMMITTED TO WORKING FOR ONE CORPORATE, THEY ARE MUCH MUCH MORE MOBILE, MUCH HAPPIER TO HAVE THEIR OWN BUSINESSES, TAKE A PAY CUT IN ORDER TO DO SOMETHING THAT MORE REFLECTS THEIR OWN VALUES AND TO WORK WHERE THEY WANT TO."

 

Indeed, while remuneration in exchange for effort is still a key expectation of employees, it is arguably in danger of falling into the hygiene bucket as expectations shift towards more holistic fulfilment.

"PEOPLE ARE NOW MOTIVATED BY MISSION AS MUCH AS MONEY. THIS IS SOMETHING MILLENNIALS HAVE BROUGHT TO THE PARTY BUT IT ALSO GOES BEYOND THEM."
The role of Millennials

Some Council members feel that it is the changing expectations of Millennials that are putting employers under increasing pressure to adapt and evolve to ensure their brands are appealing to employees of all generations. There is a belief that employees today, especially those in their 20s, are no longer looking for a job for life or a career with one employer, and, as such, employers must work harder and continually prove themselves to be an organisation of choice.

"THEIR EXPECTATIONS OF LIFE AND COMPANIES ARE SIGNIFICANTLY DIFFERENT FROM THOSE GENERATIONS BEFORE… AND, IN THIS TALENT WAR, IT WILL BECOME INCREASINGLY IMPORTANT."

However, others contend that increasing demands on employers pre-date the rise of Millennials and are in fact more associated with general social trends demanding that companies do the right thing and demonstrate good corporate citizenship in many ways.

"IT GOES BACK LONGER THAN THE LAST 5 YEARS, I THINK PEOPLE HAVE BECOME MORE DEMANDING OF THEIR EMPLOYERS IN A LOT OF DIFFERENT WAYS… PEOPLE EXPECT TO BE MORE FULFILLED BUT ALSO TO WORK FOR A COMPANY THAT IS WORTHWHILE… [THAT] THEY ARE PROUD TO WORK FOR OR HAPPY TO ADMIT TO WORKING FOR."

Supporting this latter view, Ipsos’ research on Millennials reveals that despite claims from the likes of the Daily Mail that the cohort is “spoilt, full of themselves [and] averse to hard work”, Millennials are actually not that different from the rest of society when it comes to what they expect from an employer.

Indeed, rather than being a revolutionary generation set to change everything that comes before them, they are actually behaving in the same way generations before them did when they were the same age.

And, at the end of the day, Millennials and older generations have the same expectations of their employer: to be rewarded for the work they do, to have the opportunity to grow and to work for someone who cares.

The importance of delivering on the employer brand

Council members warned of the danger of being too focused on projecting the perfect employer brand and failing to deliver on those expectations.

"IT IS GETTING THESE PEOPLE IN BUT THEN YOU NEED TO RETAIN THEM AS WELL. IF YOU ARE NOT ACTUALLY GOING TO DELIVER IT, ALL IT WILL DO IS CREATE FRUSTRATION. THEY WILL SAY, ‘THE BROCHURE YOU GAVE ME ISN’T QUITE THE SAME HERE’."

While there are several high-profile examples of employer branding going wrong, when brands get it right, the benefits can be considerable and far-reaching. Google has famously been able to position itself as an employer of choice across the globe and it, along with other tech companies, has been able to disrupt the hold financial services companies previously had on attracting the best talent.

Outdoor apparel company Patagonia is another example of how to develop a successful employer brand. By building its environmental mission into its employer branding and recruitment, Patagonia has carefully constructed a consumer-facing workforce that truly “lives the brand” and reinforces this at each customer interaction. The result is an authentic customer experience that is aligned with the brand’s positioning, affirming for staff and good for the bottom line.

"YEAR AFTER YEAR THERE IS A GREATER EXPECTATION THAT COMPANIES WILL PARTICIPATE IN SOLVING THE MOST IMPORTANT SOCIAL ISSUES.

THOSE COMPANIES THAT ARE NOT JUST GENERATING THE BEST PRODUCTS AND SERVICES ARE THOSE WITH THE BEST REPUTATION, WITH THE BEST ABILITY TO CONNECT WITH CLIENTS AND CONSUMERS. THEY ARE THE COMPANIES THAT GENERATE EMOTIONAL LINKS AND MORE LOYALTY, AND AT THE SAME TIME, THEY ARE THE FIRST IN LINE WHEN CHOOSING THE BEST TALENT."

Final thoughts

The 2017 Reputation Council confirms that the importance of employer branding is continuing to rise and it is those organisations that have recognised this and applied an employee lens across their business that are reaping the reputational rewards.

And, if any more evidence is needed of the importance of having a strong employer brand and engaging employees with a deeper purpose, consumers are demanding this too. Ipsos’ Global Trends research shows that 68% of citizens from 23 countries believe that the most successful brands of the future will be those that make the most positive contribution to society beyond just providing good services and products.

Methodology: 127 interviews conducted with Reputation Council members between April and August 2017.

Read more from the Reputation Council...

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Reputation on the rise: Safeguarding your brand reputation through investment in cyber security

There is a difference, it seems, between knowing something and really knowing something. As a professional of 15 years’ experience in the brand reputation space there are a number of issues that I have to talk to clients about again and again, where it is clear that the people I am speaking to know, and largely agree with, what I am saying… but then either fail to take the appropriate action or come back and ask the same question a year or so later. There are a number of these issues; whether general public marketing affects the opinions of politicians is one, as are questions about how to improve trust.

One that is perhaps less obvious a question is the importance of cyber security to reputation. However, it is a topic that has come up frequently over the years, both from clients asking about it through to Ipsos writing articles and thought pieces on the subject. Myself and colleagues wrote about the cybercrime threat to reputation back in 2016 and 2017, and warned that businesses were perhaps overconfident and underprepared for the risks posed by cybercrime in both 2018 and 2019.

Nevertheless, we still got the sense that despite our clients knowing that cybersecurity is a potential threat to their hard-worn corporate reputation, they somehow didn’t really take it seriously. I get that IT is less sexy than marketing and events when it comes to reputation management, but it is certainly as important. Losing data on a large scale strikes a blow against any company’s ability to portray themselves as competent, well managed or trustworthy.

Nearly 9 in 10 senior industry leaders invest in cyber security to protect the reputation of the companies they work for. It’s high time you joined them.

Bearing all this in mind, I was enthused to see data in Ipsos’s 2020 Captains of Industry survey that seems to indicate senior business leaders are not only cognizant that cybersecurity is important from an operational perspective but also from the point of view of reputation management.

When asked directly to give the main reasons for investing in cybersecurity, nearly nine in ten Captains of Industry said that it was “to protect our reputation”, with 30% saying that it was the most important reason. Only business continuity was more important. This is a huge endorsement of cybersecurity as a reputational shield, and one that is being embraced by business leaders themselves rather than being forced upon them by shareholders or customer demand (the more traditional triggers for investment in cybersecurity).

Given the importance of reputation – it is now the third ranked factor that Captains of Industry look for when judging an organisation – the way cybersecurity is being directly linked to reputation is huge positive and suggests that business leaders (and my clients) are beginning to understand its importance. I would even go further and suggest that cybersecurity not only protects a firm’s reputation, but it also safeguards its financial performance and perceptions of the quality of its management, the top two factors listed by Captains of Industry when judging a company or organisation.

While I am under no illusion that questions about the importance of cybersecurity to reputation are going to go away, hopefully these results indicate that we have reached a tipping point and that soon cybersecurity will take its place alongside the other recognised and respected tools of reputation and brand managers.

For more information please contact:

Carl Phillips
Director & Global Stakeholder Research Lead
Corporate Reputation,
Technology Sector

Carl.Phillips@ipsos.com

Fashion Victims: The Losers in the Fast Fashion Race

What can comms. leaders learn from the challenges facing companies in the fashion Industry?

The fashion industry has been under the spotlight recently for all the wrong reasons. The industry is going through a period of rapid change, brands and retailers are increasingly exposed to Environmental, Social and Governance (ESG) issues in their supply chains, resulting in an intensified threat to reputation. Just last summer Boohoo was caught up in allegations around poor working conditions and allegations of paying employees in their supply chain below the minimum wage.

The restrictions imposed on consumer life throughout the COVID pandemic have acted as a rare speed bump on an industry that has otherwise been evolving unabated at a frightening pace. Ipsos Sustainability Monitor (SBM) 2020 data reveals that over half of consumers (55%) are buying less clothing than they were pre-pandemic. With the world on pause we ask what’s next for the fashion industry? How do brands best navigate these issues? How engaged are consumers in these issues? And what can comms leaders, across all industries, learn from the challenges being faced by the fashion industry?

Fast Fashion: a quick overview

Fast Fashion: “Inexpensive clothing produced rapidly by mass-market retailers in response to the latest trends.”

Since the late 90s, globalisation has opened-up Western markets to cheaper labour in the East. Cheaper clothing and ever shortening fashion cycles (including the development of the weekly ‘micro season’) means that clothing production doubled between 2000 and 2014, while the average number of garments purchased by the average Western consumer increased by 60% (McKinsey).[1]

Fast fashion is fuelled by celebrity culture, fads and the 24/7 nature of social media. SBM 2020 data shows that three-quarters of consumers agree that clothing and fashion are becoming cheaper and more throw-away in nature. And while just 14% of consumers say they feel under increased pressure to keep up with the latest trends and fashion, this rises to 24% among the youngest group (18-34 year olds). The fashion industry (and fast fashion in particular) are associated with serious ESG issues, outlined below.

Figure A) ESG issues typically associated with fast fashion (and the wider clothing industry)

  • Environmental issues: The fashion industry is considered by the UN Conference on Trade and Development (UNCTAD) to be the second largest polluter in the world, after the oil industry (UN)[2]
  • Social issues: Forced/ slave labour, child labour, dangerous working condition… The Clean Clothes campaign reports wages in Eastern markets are typically a fifth of average living wage there.[3] Average working days are 14-16 hours, 7 days per week (Clean Clothes Campaign)[4]
  • Governance issues: Overproduction is a massive issue. More than half of fast fashion produced is disposed of in under a year, (McKinsey)[5] with consumers keeping clothing on average half as long as they did 15 years ago

1) Ethical considerations and the impact on purchasing behaviour

ESG issues around fast fashion and the clothing industry have been widely reported. As consumer awareness grows, we might speculate that ethical considerations will come to take on more importance in the minds of consumers. But how much impact do ethical considerations have over clothes purchasing decisions?

When it comes to what actually drives clothes purchase decisions, the more conventional levers such as price style and quality hold the most sway. None-the-less almost a third of consumers say that ethical issues are one of the top 3 factors that influence their decisions over clothes purchases (and 8% say that it is their primary consideration).

In the era of fast fashion it is perhaps surprising that ‘trends’ (keeping up with friends, celebrities, social media and advertising) is the least selected factor influencing clothes purchases. Caveats should be applied (the results are self-reported and people might underplay the amount of influence trends hold on them, the sample is 18+, missing a key demographic target for fast fashion, teenagers). But the result does suggest that fast fashion is concentrated not only in small proportion of the worlds markets (Western markets) but also within a small proportion of the population within those markets. A small number of people are likely to be responsible for a lot of clothes purchases. While 30% of consumers say they buy more clothes than they need, this rises to 42% among those that say ‘trends’ are a top 3 influencing factor, and 55% among those that say that ‘trends’ are the primary influence on their clothes purchases (SBM data 2020).

#1. Know your customer: For 3-in-10 consumers ethical issues are a key decision-making criterion in what clothes they buy. Whether your business is in fashion or elsewhere, there is clear reputational risk in not being aware of, or not fully understanding what motivates and what matters to your customers.  

Chart B: Ipsos SBM data 2020: Clothing and fashion purchase decisions

2) Consumer disconnects over ethical issues

What consumers want they don’t necessarily get

Ethical issues play an important secondary role in clothing purchase decision making but what action do consumers think should be taken? Four-in-five consumers agree that brands and retailers should do more to help protect the environment and safeguard workers’ rights within their supply chains, and 77% of consumers say that clothing brands and retailers should provide more information. However, there is a large disconnect between what consumers want and what they get. Just 17% of consumers agree that the fashion industry provides enough information about the environmental and social impacts of the manufacturing of clothes.

Consumer good intentions not necessarily reflected by their actions

When it comes to taking personal action, although 56% of consumers say that if a clothing brand was associated with environmental pollution in its manufacturing process, they would be putting off from buying clothing from that brand, just 28% of consumers have researched brands that provide ethical clothing.

#2. Be transparent: As globalisation has increased the complexity of supply chains in the fashion industry, it’s becoming harder for many brands and retailers to maintain transparency. Whether your business is in fashion or elsewhere, consumers want to be able to make informed decisions, they want to be provided with clear and complete information (and they probably expect you to do at least some (if not all) of the legwork).

Chart C: Ipsos SMB data 2020 & Ipsos Sustainable Fashion Survey 2018 data: The disconnect between consumer good intentions and their actions

3) What's to be done?

Consumers clearly want more ethical accountability from brands and retailers. But by what means do they want this delivered? In 2019 the Environmental Audit Committee (EAC) published its “Fixing Fashion Report”[6] making 18 recommendations to the government to help clean up the industry, including;

  • Mandatory environmental targets for fashion retailers with a turnover above £36 million
  • More proactive approach to enforcement of the National Minimum Wage with greater resourcing for HMRC’s National Minimum Wage team to increase inspection and detection work
  • The Government should publish a publicly accessible list of retailers required to release a modern slavery statement. This should be supported by an appropriate penalty for those companies who fail to report and comply with the Modern Slavery Act

The Ipsos SBM 2020 survey tested what level of consumer support there would be for clothing and fashion brands and retailers that adopted similar commitments through their own volition. Across the 8 statements tested by the SBM survey (see chart D) between 67% and 78% of consumers said that the measures would make them feel more positively about a clothing brand or retailer. Commitments to national minimum wage (43%) and proof of compliance with the Modern Slavery Act (40%) had the most ‘much more’ positive impact. There are notable differences by demographics.

18-34 year olds are much more likely to say that they would be ‘much more’ positive about brands across all of these measures:

  • 44% of 18-34 year olds said they would be much more positive about brands that set themselves environmental targets compared to 24% of 55+ year olds
  • 44% of 18-34 year olds said they would be much more positive about brands that made commitments to using sustainable materials compared to 28% of 55+ year olds

Women are also much more positive across all of the measures:

  • 46% of women felt much more positive about stores that set-up in-store schemes to help customers recycle their old clothes compared to 30% of men
  • 40% of women felt much more positive about brands that helped to reduce textile waste compared to 25% of men

Women and millennials with disposable income form a key target audience for the fashion industry. As ethical and ESG considerations climb up the agenda they are likely to hold more influence over brand reputation and consumer purchase behaviours. If your clothing range is targeted at younger consumers and women in particular, then commitments to the environment and the wellbeing of employees in your supply chain is quickly transitioning from a nice-to-have to a necessity.

#3. Collaborate with your customers: There is clear support for measures that help clean up the fashion industry and reputational rewards are available for brands that adopt similar commitments. Whether your business lies in fashion or elsewhere it pays reputationally to align your business’s commitments to those of your customer. Take pride in your commitments and collaborate with your customers.

Chart D: Ipsos SBM data 2020: Impact of brand and retailer ethical commitments

4) Conclusion & Recommendations: An opportunity to build brand reputation

Fashion at its heart is an outlet for self-expression, choice, freedom, communication, it’s a vehicle to bolster confidence, for consumers to feel good about themselves. Exploitation and corporate greed aren’t a great look for brands trying to make their customers feel good about themselves. And there’s evidence that fashion brands are starting to take a long hard look in the mirror.

Model examples   

  • Sustainable materials & Slow fashion - H&M offers a new ‘Conscious’ range. To qualify the product must contain at least 50% sustainable materials e.g. organic cotton or recycled polyester. Levi’s ‘Water<Less’ collection uses up to 96% less water in its denim production. Patagonia only uses sustainable materials in their outwear. They champion “slow fashion” by helping customers repair garments and encouraging customers to recycle and buy second hand
  • Circular economy – TK Maxx ‘Give Up Clothes for Good’ campaign has recycled 1.6m bags of clothing since 2004. They also have a zero waste to landfill target. M&S ‘Shwopping’ partnership with Oxfam 30million garments swapped and £21million raised for people living in extreme poverty. The circular economy is based on reusing and recycling materials rather than throwing them away
  • Codes of conduct – TK Maxx operates a ‘vendor code of conduct,’ committing vendors to use no child or forced labour, protect employee rights on wages, working hours and adhering to health & safety regulations in the workplace

Whether or not we see a return to business as usual on the high street as COVID-19 subsides, consumers are expecting more from businesses and brands, challenging them to perform a social purpose beyond simply turning a profit. This increased scrutiny presents a risk certainly, but with it also a growing opportunity. Ipsos Corporate Reputation Centre has 40 years’ experience in helping global businesses navigate reputational challenges.

Ipsos Recommendations

1) Know your customer – understand what issues concern them and to what extent it concerns them. How does this impact how they perceive your brand?

2) Transparency & third-party endorsements – good brand reputation is built on trust. Third party endorsements such as the Fair-Trade Foundation and the Impact Report are a means to showing your customers that you care and take their concerns seriously. Avoid shortcuts and greenwashing and practise what you preach.

3) Collaborate & take pride – show consumers that you are on their side, that you want to make life easier and more straight forward for them and that you can help bring clarity, speed and convenience to the purchasing decisions that they care about. Collaborate and work in partnership with customers towards shared goals.

Article links

[1] https://www.mckinsey.com/business-functions/sustainability/our-insights/style-thats-sustainable-a-new-fast-fashion-formula

[2] https://news.un.org/en/story/2019/03/1035161

[3] https://www.sustainyourstyle.org/en/whats-wrong-with-the-fashion-industry#anchor-environmental-impact

[4] https://www.sustainyourstyle.org/en/whats-wrong-with-the-fashion-industry#anchor-environmental-impact

[5] https://www.ellenmacarthurfoundation.org/assets/downloads/publications/A-New-Textiles-Economy_Full-Report.pdf

[6] https://publications.parliament.uk/pa/cm201719/cmselect/cmenvaud/2311/2311.pdf

For more information about how Ipsos can help you, get in touch:

Tom Cox
Research Manager
Corporate Reputation, Consumer Sector

Tom.Cox@ipsos.com