Why should an experienced, well-educated person with the right mindset join your company? How do you keep them motivated for many years? With money?
A high salary will not be enough to win the fierce «war for talents». In future, employers will need to convince with other arguments: you need to set up strong and individual key elements to attract and keep employees in the long run - and the most effective instrument is a brand.
«A strong Employer Brand attracts great people like flowers attract bees!» (Prof. Dr. Armin Trost, «Authentische Arbeitgebermarken» (Authentic Employer Brands), HR Today Special, 2008)
Demographic trends as challenges for employers
Many companies cannot grow further because of a lack of experts. They therefore need to fight for new employees as well as for new customers. Despite a slight increase in employment and a decrease in vacancies in Switzerland, the number of open positions at the end of 2012 amounted to 46,000. A survey by the Federal Statistics Office showed that 32% of all companies are struggling with recruitment problems.
The demographic development in our country will exacerbate this problem. Up to now, only the first years of the baby boom generation (1946-1964) have reached retirement age. By 2030, those from the other 18 most prolific birth years will also reach retirement age. Employers are faced with the challenge of being able to replace these executives. However, because of a socio-demographic kink in the labour market, there is a shortage of qualified management juniors between the ages of 30 and 45.
This staff shortage is intensified by global cut-throat competition and pressure to innovate. To keep up with the rapid pace of innovation, the requirements in quality and performance of new employees have risen. Under these circumstances, it is important to find employees who not only can, but also want to, put in a high performance – and ideally as a loyal employee for many years.
Companies need to rethink how to attract such employees and motivate them long-term. Employee values are changing and a new generation of workers is at the ready: Generation Y. The rising juniors, born in the late 70s to late 90s, make different demands on their work and their employers. The «millennials» are highly educated, self-confident and optimistic - they believe that they can achieve anything they want. Constantly looking for new challenges in their interconnected world, they have a different form of loyalty compared to their parents: disloyal to the employer, but loyal to their duties and the team. They are performance-oriented and demonstrate a high commitment to their projects; but only as long as they can identify with their work and enjoy it, and as long as their private life is not adversely affected by the workload.
Leading companies have already recognized that it is no longer sufficient to convince with a high salary. They deliberately focus on the power of Employer Branding when recruiting and motivating their employees.
Become an attractive employer with Employer Branding
Employer Branding should not be confused with HR marketing or employer image advertising. As with classic brand development, it first needs a fundamental strategy and clear brand positioning.
Employer Branding is the development of an identity-based positioning of a company as an employer and the creation of a consistent internal and external employer world. Core of the positioning is a clear employer brand promise, which is not to be perceived by everyone as attractive and credible, but by the targeted employees.
For years, the management consulting firm McKinsey & Company has been one of the most popular employers in the economic sector. One might think that such a company would attract enough employees without employer branding. But, even for McKinsey, finding the right people is a challenge. This is why they have relied on clear employer positioning for quite some time: «Building Global Leaders». McKinsey offers its employees a unique learning curve, work with leading clients and issues in a global environment, and on top of all that: an ideal springboard for their career. It is well known that one has to work hard for it. But anyone who has spent some years working hard as a management consultant knows that he is now one of the most sought-after managers. That McKinsey delivers on its brand promise is demonstrated by the alumni network, which consists of executives in a wide variety of sectors and more than 200 CEOs of multi-billion companies worldwide.
Very clear, but almost contrary, employer positioning is pursued by German Telekom. The employer image campaign in 2011 «Become boss of your life» clearly demonstrated the underlying Employer Brand Strategy. The Bonn-based company promises its employees an individualized work-life-balance by offering flexible working hours, dual career development, mobile working, and parental leave.
Google, one of the most popular employers in the world, might give the impression that the work-life-balance is a main focus: Billiard tables and a slide in the office, free breakfast, lunch and dinner, free shuttle buses, free scooters and bicycles, and free work time for creative projects. However, the idea behind these numerous incentives is not the balance of work and life, but the equality of work = life. The search giant promises a friendly, innovative and stimulating work environment, which will contribute significantly to the motivation and performance of employees.
Fundamental competitive advantages through employer branding
A key effect of employer branding is a self-selection process in recruiting. Clear positioning maximizes employer attractiveness and leads to self-selection by the candidates: all the right people are attracted by the employer brand promise. This is why extremely career-oriented people will apply to McKinsey and not to German Telekom, because work-life-balance is not their first priority.
A strong employer branding also has a positive influence on the existing employees. If the employer brand promise is practised within the company, the managers and employees develop a strong feeling of identification and employer brand loyalty. Studies show that a strong employer brand reduces recruitment costs by up to 40%, increases the time an employee stays with the company and thus the «return on development» by up to 50%.
Employee motivation and performance is raised through the power of establishing identity by employer branding, thereby improving customer satisfaction and the overall company image. Several long-term studies have shown that higher employee commitment leads to improved business results and greater brand value. A strong employer brand thus ensures the sustainability of a company, not only by rectifying the shortage of skilled workers but also by the positive impact of motivated employees on the company's success.
Developing a strong employer brand
To build a strong employer brand and to benefit from its positive effect, it is necessary to develop a clear strategy: specific positioning as an employer with a clear employer value proposition which satisfies these three specific requirements:
Characteristic — Employer Branding is part of the corporate branding. An employer brand is not a new brand, but part of the corporate brand. The employer brand therefore has to evolve from the existing, practised corporate brand and identity.
Relevant — A company does not need to be attractive to all workers, but only to the relevant ones; therefore, the positioning of an employer must be tailored to the target group - the «right potentials».
Differentiating — An employer must differ from its competitors in the «war for talents». Therefore the employer value proposition needs to be different from that of competitors in the labour market, rather than reflect their positioning.
In order to develop such an employer value proposition, one has to evaluate what distinguishes the company as an employer from the others and what makes it unique. Two things need to be considered that go together like a lock and key: first, who is the target audience and what is it like - what characterizes an ideal type of employee and what are his needs? Second, with which individual characteristics does the company offer the best opportunities to develop these qualities? To answer these key questions, an in-depth analysis of the brand has to be made, in which the corporate identity, work culture, specific benefits, needs and values of the target group, the labour market and the competition are carefully examined.
This analysis reveals what makes the employer unique for its target group. The essence then has to be summarized into an overarching idea, a concise positioning statement with a clear employer brand promise. For maximum effect this idea should not be too constructed, but should ideally reveal the specific cultural image of the company.
The U.S. food giant Mars, for example, uses a clear mental image of freedom to convey its uniqueness as an employer with its promise «Freedom takes courage. We take the courageous». Every employer takes personal responsibility for Mars and in return has the freedom to question the status quo, to think outside the box and to initiate the unconventional. Moreover, open and honest communication should ensure there are no constraints amongst the employees.
In a next step, the positioning idea is transformed into communicative messages, visual appearance, and internal and external measures. All internal measures and external recruitment touch points, such as job listings, website, job fair presence or employer image campaigns, must be developed and implemented consistently. Positioning with a clear mental image creates a unique orientation in the development of consistent measures. At Mars, for example, the free and unconstrained ambience was also resolutely adopted in the working environment. Private offices were decommissioned to promote open communication through open spaces right up to upper management level. Even the CEOs no longer have private offices.
To achieve long-term success of the new employer brand, it is essential to anchor it internally. The employer value proposition has to be lived within the company every day so that employees become ambassadors of the employer brand and carry the employer brand promise to the outside world. This requires the employer brand to be experienced from inside, not only by internal corporate communication, such as an employee newsletter or intranet, but also the entire HR offering as well as the work and management culture will need to be adapted to the new employer brand strategy. The multinational consumer products company Procter & Gamble, for example, not only writes its employer brand promise «built from within» in its job listings, but also implements it internally. The promise to be hired by P&G not only for a job but for a whole career is lived within the company by actively developing young in-house talents and only recruiting management staff from within.
In order to build up a strong employer image and strengthen the employer brand, consistent brand management is required. A consistent internal and external employer world has to be implemented in the long-term where the employer brand promise is attractive and credible at all touch points - for relevant, motivated employees and a successful, sustainable business.