CEOs Need to Pay Attention to Employer Branding

As the global economy picks up, there is growing concern among CEOs about finding and keeping the best talent to achieve their growth ambitions. Different surveys show that in 2014, 36% of global employers reported talent shortages, the highest percentage since 2007, and in a more recent 2015 survey, 73% of CEOs reported being concerned about the availability of key skills. So how can companies compete effectively in this new war for talent? First and foremost, it’s time for leaders to focus on strengthening their organizations’ employer brands.

The approach to building a strong employer brand has changed over the last few years—as has its impact on hiring and who’s responsible for overseeing it. The term “employer brand” was first defined in the mid-1990s: it denoted an organization’s reputation as an employer, as opposed to its more general corporate brand reputation. And building a strong employer brand first became a major focus of activity between 2004 and 2008, when in response to the growing competition for talent, leading companies like Unilever, Shell and P&G began to apply the same focus and consistency to their employer branding as they applied to their corporate and consumer branding. This led to the development of an Employee Value Proposition, which defined the key benefits offered by the company as an employer, and the production of employer brand guidelines, which aimed to bring greater consistency to the company’s recruitment advertising. Employer branding was predominantly outward facing and advertising driven, and fell under Resourcing and HR.

Times have changed. The rise of social media has made companies a great deal more transparent. People are far more likely to trust a company based on what its employees have to say than on its recruitment advertising. This means that talent attraction relies far more heavily on employee engagement and advocacy.

To understand how this shift is playing out in organizations, we recently surveyed more than 2000 senior executives about their employer branding activities. Our sample included CEOs and heads of HR and recruiting, employer branding, and marketing, in 18 countries. The data was collected from October to December in 2014, and the results are presented in Universum’s “2020 Outlook, the Future of Employer Branding.”

One of our main findings was that many leaders now place primary responsibility for the employer brand with the CEO or marketing, rather than with recruiters and HR. In fact, 60% of the CEOs we surveyed said this responsibility lies with the CEO (40% of marketing leaders agreed) — which is a strong indication that employer branding is expected to gain greater strategic importance.

When we asked respondents about the future goals for employer branding, 40% said they wanted it to secure long-term hiring needs, and 31% said it would become more important for building a global reputation. And a lack of confidence in HR’s ability to oversee these objectives might also be a factor for the shift of responsibilities. In the same PWC survey that highlighted growing CEO concerns over the skills gap, only a third reported confidence in HR’s preparedness to capitalize on these transformational trends in talent management. Especially in small to medium-sized companies where HR is still regarded as administrative, many more CEOs appear to be taking a more active role when it comes to their employer brand.

Marketing is also seen as playing a more important role in shaping the employer brand. Because social media has intertwined company reputation with the customer experience, consumer-facing communications are increasingly important in shaping the employer brand. Many firms now highlight the quality and dedication of their employees in their consumer marketing, and this naturally affects how others judge them as potential employers. Likewise, the strength of the employer brand can have a significant effect on the quality, pride, and engagement levels of those employees involved in delivering a positive customer brand experience. And with other studies linking happy employees to happy customers, it’s not surprising that most companies want to align their employer and consumer brand strategies over the next few years.

So what are employers doing to build a stronger brand? Among those we surveyed, 61% said they had developed an Employee Value Proposition to underpin their employer branding activities. And social media has come to the fore in terms of communication. Yet, while 74% of our respondents claimed to have at least a moderate employer brand presence on social media, only a third said they had dedicated employees posting content and responding to users on a regular basis. Even more surprising was that only about half of respondents said they measure their social media activities. So it’s clear that companies still have some way to go when it comes to strengthening their employer brands online. But the majority of leaders said they would be increasing this presence by spending more on social media content and advertising over the next five years. And 69% also said they would do more to measure the impact of their social media activities.

With clear signs that the competition for talent is becoming more challenging, many organizations are duly turning their attention to strengthening their employer brands. Based on the insights Universum has gained, from measuring the effectiveness of employer brand strategies across hundreds of organizations every year, we believe these steps will help leaders attract and retain the talent they need:

• Evaluate your current employer brand awareness and reputation, through survey research among your key external target audiences
• Define how you’d like to be seen as an employer based on a realistic assessment of your distinctive strengths, and translate this into a clear and compelling Employee Value Proposition
• Be more proactive in using social media to share inside stories that highlight your strengths and build a more authentic and engaging employer brand reputation.
• Ensure that every function within the organization understands the value of a strong employer brand to the success of the business and the role they need to play in sustaining a consistent brand experience and reputation.

Given our new world of social transparency, organizations can no longer afford to rely on recruitment advertising to build a positive employer brand image. With employee advocacy growing more important, employer reputations will ultimately depend on the consistent values and vitality of their organizational cultures. And whether HR or marketing takes the lead in communicating the employer brand, a growing number of firms are beginning to realize that accountability for the employer brand experience must ultimately fall on the CEO.

This blog first appeared on Harvard Business Review on 05/11/2015.

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