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.

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It’s the environment, stupid!

ENVIRONMENTAL CONCERNS ARE NO LONGER JUST PRESSING ETHICAL ISSUES, BUT QUESTIONS OF FINANCIAL PRUDENCE. OVER HALF OF BRITISH CONSUMERS FEEL WE ARE EXPERIENCING A CLIMATE CRISIS, AND OVER ONE THIRD SAY THEY WOULD SWITCH OR BOYCOTT A FINANCIAL ORGANISATION IF ITS INVESTMENTS HAVE A DETRIMENTAL ENVIRONMENTAL IMPACT. DESPITE BIG CONCERNS AROUND COVID-19, THE ENVIRONMENT REMAINS A PRIORITY FOR THE PUBLIC, AND BUSINESSES WILL BE EXPECTED TO CONTINUE THE TRANSITION TO A SUSTAINABLE ECONOMY IN THE POST-CRISIS PERIOD.

Whilst it doesn’t roll off the tongue with as much zest, James Carville’s ‘the economy, stupid’ slogan is aptly modified for Larry Fink’s announcement earlier this year that BlackRock would base future investments with environmental sustainability as a central goal… ‘It’s the environment, stupid!’. If anyone could ‘wake up’ the market to the tipping point which has now been reached around the environment, it is the Chief Executive of the world’s largest asset management firm. “Awareness is rapidly changing” wrote Mr Fink in the company’s annual letter, “and I believe we are on the edge of a fundamental reshaping of finance”. This has been compounded more recently, with the announcement that the UK’s biggest pension fund, the government-backed National Employment Savings Trust (Nest), will begin divesting from fossil fuels, and BlackRock “launching a selection of ESG multi-asset ETFs, to provide investors with a cost-efficient, transparent and sustainable way to invest”.

Data from Ipsos’s 2020 Sustainable Business Monitor survey amongst the British public echoes these sentiments. With a majority of the public now feeling we are dealing with a climate crisis, it appears that cash may no longer be king in investments. Only 21% now claim to care more about financial returns on investments than on whether the financial provider is ethical in how it invests money. This is compared to 28% of the public who prioritise ethics over financial returns and 26% who feel they should be given equal footing. Even allowing for the possibility that consumers may not be quite so ethical when faced with this trade-off in reality, it is clear that there has been a change in the drivers of investment decision making.

Returns on investment or ethical considerations?
Views on Climate Change

The growing imperative for investors to prioritise companies with a good sustainability track record is brought into sharper focus when looking more closely at the attitudes of millennials. Findings from the Ipsos Sustainable Business Monitor show that 54% of 18-34 year olds would be concerned about investments in Oil and Gas, compared to 47% for the UK public overall. This isn’t limited to the UK either; sustainable investing interest among US millennial investors jumped from 84% in 2015 to 95% in 2019, according to Morgan Stanley’s Institute for Sustainable Investing.

Which sectors concern the public regarding investments?

So, what does this all mean? Unsurprisingly, that Fink is right.

Over one third of those asked said that investment in projects or companies that have a detrimental environmental impact would lead them to ‘switch from’, ‘stop using’, or ‘boycott’ a financial organisation. Indeed, sustainable investing is ranked alongside executive remuneration – an issue that has a long track record of being a strong driver of negative opinion for the finance sector.

Switching / Boycotting financial organisations

This sentiment is further reflected at a global level when looking at Ipsos data from the recent Earth Day 2020 report, highlighting that even when set against the crisis situation that COVID-19 has presented, concerns around the environment remain steadfast. Over 7 in 10 people around the world agree that climate change is as serious as the pandemic, whilst 65% agree that in the economic recovery from COVID-19, it’s important that government actions prioritise climate change.

Seriousness of climate change in comparison to COVID-19
Support for a 'green' economic recorvery from COVID-19

Recognising the growing commercial opportunity facing the sector, and the long-term risk of investing in environmentally unfriendly industries, Fink notes that “as a fiduciary, our responsibility is to help clients navigate this transition [the reallocation of capital]. Our investment conviction is that sustainability and climate-integrated portfolios can provide better risk-adjusted returns to investors”.

But where does this leave industries which have been traditionally harmful to the environment, such as the oil and gas industry, for a long time the bedrock of investment portfolios and still an essential service despite growing environmental concern?

In light of BlackRock’s position, The Economist wrote: “[t]o cynics, all the climate-friendly noises amount to little in practice, since few people are ready to make carbon-cutting sacrifices that would force oil firms’ hands. But noises are sometimes followed by action. Should they be this time, the 2020s may be do-or-die for the oil industry”.

It isn’t a case of ‘adapt tomorrow or die’ for fossil fuel companies however, and Fink makes this clear, forecasting “the energy transition will still take decades”. Citing fairness and justice, “we cannot leave behind parts of society, or entire countries in developing markets, as we pursue the path to a low-carbon world”. The demand for energy will continue whilst technology works to bring cost-effective replacements to conventional fuel sources, but it is incumbent on the sector to aggressively pursue cleaner energy; not only from an ethical perspective, but also in order to remain an attractive investment. The same is also true for a number of other sectors which have for a long time been harmful to the environment, and must adapt with the new way of sustainable investing.

Companies from within the fossil fuel and investment sectors which are leading the transition to a more sustainable future are on the right path, reinforced by public support. This should not be derailed. Communicators in these sectors therefore have the opportunity to maintain messaging around this transition, but with fairness in mind, should also remain sensitive to the societies whose energy programs are not as developed as some of the leading world economies. The transition to sustainable investing will need a collective effort – innovation from industry, reallocation of risk, government support and sustained societal scrutiny, but in adopting Fink’s position, it should be worthwhile effort for investors, producers, and consumers, from both an environmental and a financial perspective.

Contact: Alex Russell - Email | LinkedIn

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