The phrase ‘The Employer Brand’ gets over 400,000 Google searches per year and is known to management teams globally. What’s special for me is that I had the chance to sit-down with the creator of the idea – Simon Barrow.
Have a listen to the conversation below or continue reading for a full summary of this important session, and don’t forget to subscribe to the Employer Branding Podcast.
What prompted your thinking in the first place?
Well, it started with product brand management. The employer brand idea grew out of that. I was a brand manager for 8 years – three years at Knorr; soups, sauces and stock cubes, now Unilever’s top food brand, and then 5 years at Colgate-Palmolive. The essence of brand management is the basis for my thinking.
There are 6 key elements, and this is important because those 6 elements apply to the employer brand as well:
- The first step is research and planning across consumer, trade, competition and the regulatory environment.
- Step two is the formulation of a strategy approved and supported by involved senior management who know brand management. I could not have done my job without them, they were demanding, had high expectations and knew my job backwards.
- The third step is the creation of a proposition which is distinctive, compelling and rooted in reality.
- Step four is coherent execution across R&D, plant, distribution, sales, advertising and promotion.
- Step five, this may surprise you, constant liaison with a dedicated management accountant advising on the financial implications of every step I took. Being my financial adviser on every aspect of the brand.
- The sixth and last step is rigorous measurement sales, margin, market share, distribution, users attitudes and behaviours, competitive performance and earnings vs. budget vs. previous year.
It might be worth noting what I think makes a good product brand manager. Here are a few points:
One, they have to have the trust and respect of powerful line management and functions across the company. That trust is based on you knowing more about the brand than anyone on earth. Second, you need to have the ability to influence and inspire without line authority, and at all levels including European and global management. You’ll know them because they’ll have reviewed your budget proposals in the first place. Third, you must have a reputation for innovation, Colgate’s line “you build a business through change, and you change through innovation” stays with me. Finally you should have an intense focus on the commercial aspects -. the hard issues of the market, your product, sales and margin. Of course promotional action is important but it’s not where you make your name as a potential general manager.
Here’s a little story, which I will never forget. I’m about 28. We’d done a trade event in Manchester and I’m on the train back with Ralph Champlin, the late 40’s CEO of Colgate in the UK. We talk about the event and then he says he has to read a report., So I open my bag. I take out a copy of Campaign Magazine, the advertising journal, and Ralph notices it immediately. He asks me, “Do you read ‘The Grocer’?” Quite an aggressive question because ‘The Grocer’ is, of course, about distribution and the market, in his view, infinitely more important than media gossip and who is winning what.
Despite that, Colgate later asked me to join the International Management Group, but I thought that one day I’d like to be on my own and therefore should work in a category where that is feasible. After a few years I found myself face to face with the responsibility of managing quite a large team serving the HR community. It seemed to me that the world of employment was dominated by the need to react. It wasn’t much of a strategic focus. It was, “What do we do? Somebody’s resigned. How do we fill the gap?” You Jorgen would know that, given your recruitment processes, how reactive a trade it can be. I also found it handicapped by the absence of strategy. Senior management involvement seemed to be lacking, lack of research, and lack of measurement. I asked myself, ‘Where were the six elements of brand management?’ which I went through earlier. I thought how great it would be if the best of all that could be brought into this sprawling, yet vital, new area for me. It needed its own disciplines. So I called it the ‘Employer Brand’, and that was 27 years ago. It’s a vastly different challenge. Believe me, I’ve done both and Employer brand management is tougher than product management for two reasons; a consumer brand is often a lifestyle choice. The employer brand is about life itself, it’s about your future, your self-esteem, your self-worth and those around you. It’s deadly serious because your identity today is very largely a function of, a), your skill, and b), your organization, whether or not it’s your own. The second is that while customers will know a bit about the brands they , an employee knows almost everything about their working experience. So you cannot fool them because they’re already surrounded by reality.
What issues did the idea have to surmount in the early years?
Well, I’ve got here ‘The Employer Brand“, by Tim Amber and Simon Barrow from the London Business School, July 1996. I picked out some key findings, which I think may be of interest. Number one, the introduction of marketing terms was a terrible problem for HR and internal communications, A, for the meaning, and B, for what they meant deep down. Somebody said, ‘Don’t bring that marketing flimflam here.’ There was no recognized language available in management speak for covering the combination of culture, brand and reputation. Indeed, when we introduced corporate culture and employer brand as a concept, people were, ‘Well, it’s the same, isn’t it? What’s new? It’s just corporate culture.’ Well, clearly, they didn’t know much about brand management.
Heres a choice verbatim. ‘We’re doing nothing to promote a employer brand, it’s something we need to work on but we have more pressing issues’. I’m afraid to say some people would say that today. Although not as many. ‘We have so much to do with the merger that we just want to get the basics right’ and ‘An employer brand concept is nice but it is not essential.’ I’ve done 40 M&As, and when they fail, they fail because of this stuff. So to think employer brand in M&A is irrelevant…believe me, it’s life and death.
Is employer brand a nice-to-have?
It would be lovely if everybody said, ‘This is a basic way in which we run a business,’ but we’re not always as perfect as that. So often, people are pitched into doing this stuff right, when something bad happens. You know, we’re losing people. We cannot recruit X and Y. Why did we fail to get so, and so, and so? Some sort of failure, in my experience as a consultant, is what often drives the first call. It’s not the best way, but it’s more often the usual way, compared to saying, ‘How do we run this business in an outstanding way?’ One client once said, “Simon, how do we make this ship move faster through the water?” Well, that’s a very big, broad question. I think the employer brand might be a way. That’s why we want to talk.
Some argue there is no employer brand. Instead, there is only one brand.
Well, take McDonald’s. McDonald’s have that approachable, accessible, good value, formulaic, reliable, and friendly external reputation. Inside, I think it’s different. I salute anyone who works at McDonald’s. Not everybody can do that job. You have to show up. You have to be clean and reasonably well-groomed. You have to have an easy manner with customers. You have to get on with the rest of the crew. You have to follow a standard process. As that wonderful response to the ‘McJob’ slur, I think David Fairhurst, who was running McDonald’s UK HR then, was one of the great entrepreneurs and thinkers in employer brand history to say, ‘Enough. This process of who we hire and who they are is a very critical separate stance.’ And so it proved, I think McDonald’s were getting more press mentions about their work and their people than they were about their product. So, of course, you can’t have something that is totally different, but there is, alongside a big customer brand, a pumping heart of an employer brand, and you need to salute that. Of course much of it is in common, but EB thinking would not have taken off in the way it has if people thought one brand was enough on its own. It needs a subset driven by different management skills to create, manage and measure the employment experience..
Did you expect the employer brand to take off the way it has?
I always had a belief in it because it was logically so strong, but it was a slow start for the reasons we unearthed with the LBS study I was quoting just now. It is good to see the growth in the number of employer brand managers within organizations. It’s good to see the continuing conferences around the world, the books and articles and the number of Google searches on this subject is a good indication. I think there is a great deal more to do but I’m sure we’ll get on to that.
What makes employer brand management so important today?
Well in 1985, tangible assets, that’s plant, machinery, buildings, and cash, formed 56% of corporate assets. Today, that is just 20% of value. So 80% of value is in intangibles, what used to be called ‘good will’ in brands, in your ability to attract, engage, retain, and motivate great people. That’s critical. That’s what’s driving the importance of EB thinking. It used to be the case in client services businesses, that the key success factor was the ability to win clients. Doing the work was not the difficult bit. Winning it was difficult. I fundamentally disagree with that. In my view, if you run a service business today, it’s the ability to win and engage great people. Start with them.
My golden rule, I ran an advertising agency for 10 years, is to do something great every six weeks because that should ensure the firm remains lively and attractive to the team. A big win is great but you can’t guarantee that, so two, make a great hire, three, write or say something which gets the sector talking. Additionally, an improvement to the organisation and if nothing else have a party!
Today, given the pressure behind employer brand thinking, this is not something for overtly people businesses it’s for every employer. It’s needed everywhere today because good people today are loyal to their skill and their development. It’s not just you, and thanks to social media, they’re in a big pool anyway.
What are your top 3 tips to effective employer brand management?
- First, focus on the employment experience itself. How do you rate every key touch point which impacts your people? Whether it’s their view of the worthwhileness of the work they do, the commercial success,( who wants to work for a company that might giving them a p45?), the trust and respect for colleagues round them, the opportunity to feedback their views, the leadership’s willingness to listen and act, the values of the organisation and the behaviours they, the opportunities to develop, respect for alumni, recognition and rewards.
- Second, get a board-level sponsor and through them, get senior management actively involved. Functions like HR, marketing, corporate affairs, and internal communications, none of them can actually do this on their own. As I said re brand management earlier, these functions can highlight the need. They cannot really lead the action. My power as a product manager was because my plan became the corporate plan. Don’t mess with that. Not because of me, but because it came from the top. So the connection with senior management is absolutely vital to this area.
- Third, don’t kid yourself that employer branding is the same as brand management. It isn’t. Great employer brands are built on the basics, which create the distinctive and compelling point of difference. You can’t spin your way to an employer brand. People try, and they fail. So employer branding is a problem for me. It has its role, of course, just like advertising has its role. But in this world where everybody knows the truth anyway, it’s the reality at work that matters. So those are my top three tips.
What challenges face employer brand thinking right now?
I’m afraid there’s quite a number of them. The first challenge is the perceived, highly sensitive nature of so much employee and HR work. Going back to product management, most of the elements are outside the company. They’re not political. They’re commercial. Changes can be difficult, but they’re not that sensitive. Closing a brand, pulling out of a test market – that’s just business.
In my brand management, I made two quite serious mistakes. I’ll tell you one of them. At Colgate, I’m under great pressure for a major customer order for Tesco. We need a major order for imminent delivery. I shouldn’t have done this; I called the supervisor of the line producing my brand at the plant in Manchester and I said, “You are doing a night shift tonight. What’s the maximum you could run the line out because we’ve got this big order for Tesco?” He says, “Okay, I’ll do it for you. So he runs lines at the maximum speed. This is sods law but early the following morning, the trade union representative comes in and says, “How come the line is working at this speed? That’s not what we agreed”. The line supervisor says “ The brand manager in London asked me given a major order!”. I am in trouble as a result and should, of course, have gone to the plant director. I should not have taken that kind of decision. I was forgiven due to the commercial pressure that the company was under. It was incorrect but sometimes in marketing, you do have to behave in an entrepreneurial manner. BUT, in employer brand management territory, you’re in the heart of the body corporate. You’ve got to face issues of territory, ego, ambition, personal competition, personal reputation, and all in the context of zero risk. You’re not supposed to make mistakes in the world of HR and anything to do with personal management of other people. That’s why I say much corporate speak is so deadly dull. We may get onto that. I think that’s the first part.
The second part is in many organizations, the senior management group are not involved and focused on this area. They have other fish to fry. Early on in a project, I am interviewing an experienced middle manager. Early on he says, “You do realize that this project is a complete waste of time.” I said, “I’m very sorry to hear it. Why is that?” The individual says, “Because until you’ve changed the behaviours at the top of this business, nothing will change.”. That’s the reason employer branding type research aiming to find something good to say is so dangerous. You can’t interview people and just ask them to say what they love about this business, unless you also ask the reverse. So of course, you’re going to get feedback and that needs probing and reviewing with senior management..
The third point is that the employer brand concept is often seen as just an aid to effective recruitment. Establishing what can be said, undertaking some research with relevant targets (conducting the interviews on the lines I just described), creating the communications and messaging required. Nothing wrong with that, but it’s what good recruitment advertising’s been doing for years. As I said earlier, advertising and communications is only part of good product management. It only works when customers like the product anyway. Furthermore, recruitment, tucked into HR, and may not have Now, of course, there’s an employer brand aspect, but unless that individual has the ability to influence through fully fledged employer brand management, you won’t get anywhere.
What is the role of human resources?
This is a delicate area. HR is key. Its historic role is to ensure the provision of personnel needs and to deliver service without risk, but building a great employer brand, like any form of transformation, needs bounding confidence, as well as commercial calculation and creative thinking. It takes courage to say, this is wrong and press for change. And putting what’s wrong on the table takes courage too. This is why we’re not recruiting or holding, or making productive so many of our people. This is what we need to be. This is what we do and why we’re different, and why were not for everyone. Employer brand management needs a broader providence. Now, don’t get me wrong here. If marketing took over employer brand management, they would fail. HR’s sensitivity, reflection, knowledge, understanding, and humanity is vital to this, but my message to the HR community is hold that base, but become stronger in the world of brand management. We’ve go some way to go before we see this..
What’s the career path for employer brand managers?
Employer brand work is not yet seen as a springboard to top management in a way that product brand management is. Yet, employer brand management deserves to be a springboard because if you can get this stuff right, bearing in mind what I said about intangibles, and you have the ability to manage people and money, you should be well-set. I never worried about a cash flow until I ran my own business. Many product managers have gone onto great things eg, John Allan, Chairman of Tesco, he was a brand manager at Bristol-Myers, and there are countless guys who have done that on both sides of the Atlantic. Now, indeed, the U.K. Marketing Society two years ago did some work with a leading headhunter, Spencer Stuart, on this subject. How many marketing people get to the top? They looked at the FTSE 100 and the Fortune 500. They took consumer-facing businesses, which obviously improved the figures a bit, in my view. And the answer was 18% of FTSE Chief Executives have had significant marketing experience and 21% of the Fortune 500. Finance would be higher than that. Legal, operations and sales would feature, but not HR.
Another challenge to top flight EB good practice is achieving compelling and distinctive communications. Just look through the career websites of any employment category you know and read them all. You will get tired of looking at the same words and images being used. It’s terrible. Mostly, it’s second rate stuff. It’s not the creator’s fault. They could do better, but the aversion to risk is so severe that although you can be yourself and take risks with the customer, back on the ranch, it’s very tough.
Let me read you some from the best six marketing companies in the world:
- “To be the best, we need the best, the best brands, the best processes, and most importantly, the best people.”
- “We celebrate risk-takers, the doers, the believers, the makers.”
- “Thinking globally, acting locally.”
- “One crucial ingredient, you.”
- “Collaboration and mutual respect, commitment to internal mobility, perfect environment to create success for yourself.”
- “A people company.”
- “It’s our responsibility to care for the world.”
- “You’ll be inspired and see the difference.”
- “We hire the person, not the position.”
- “A job here is a career made by you, with development opportunities, benefits and a working culture that embraces diversity’
Take the brands way and there’s nothing compelling or distinctive about any of that. Just think what it costs to put a really fancy career website together. Now, I’m not saying you shouldn’t have a career website, but if you’re going have it, try and reflect the truth of how people actually express themselves. Now, there’s one. You mentioned L’Oreal. To L’Oreal’s credit, the CEO of L’Oreal, way back, a man called Francois Dalle, said ‘Comme L’Oreal, je suis poete et paysan a la fois’. I first heard that in a slightly different way – work like a peasant, think like a poet. L’Oreal is renowned for being very hard work, and being creative. So have the courage to tell it like it is. You will stand out and be respected.
How should we measure ROI on employer brand?
There are numerous metrics, and I would suggest:
- What are you spending on recruitment ?
- What is your voluntary and involuntary turnover, and what’s happened – particularly voluntary turnover if it was under your watch that these guys were hired? What did you do wrong that they should choose of their own volition to go? You can ask the same for, “If it’s involuntary and you fired somebody, how come you recruited them? How come the appraisal systems over the months were probably pretty average? And all of a sudden, they’re gone.” So it makes a nonsense of the appraisal system, if you can’t tell the truth.
- The net promoter score.
- The measurement of internal promotion versus hiring in. If you have to hire in for too many senior and middle management roles, what’s the matter with your ability to bring on great talent inside?
- Your productivity, however that’s measured
- Alumni performance. If you cannot celebrate great alumni, why should good people join you? Are they going to be there forever? Well, most certainly not. One of the things I’m proudest of, I think, in my time as an employer is that six people who have worked with me have later made serious money doing big jobs on their own.
What companies do you rate as outstanding employer brand managers today?
With one exception, none of these have appeared yet in the employment brand management awards:
- Goldman Sachs: An outstanding employer brand. It’s tough. It’s truly diverse. It’s unforgiving. It offers potentially life-changing earnings. And it has fantastic alumni. Will you find any of that in whatever they say online? Maybe not, not in the way I’ve just said it.
- Hiscox: The insurance business, they have transformed a dull industry. The senior management involvement in the employer brand, the as-good-as-our-word, which applies absolutely internally as well as externally, their creativity and their teamwork.
- COOK: A frozen food brand. 850 people making outstanding frozen food in Sittingbourne, Kent. Employer brand leadership ticks all the boxes, including one special mention, which is that the Managing Director was the Human Resource Director.
- Unilever. A great world group with its heart in the right place. Note the reaction inside and out to the Kraft approach earlier this year. Note its commitment to sustainability. Decency maybe an odd word in a commercial context but they have it. I respect them.
- McKinsey: It’s tough to get into, but it’s a personal brand for life. It’s a true academy company. Just look at their alumni.
- John Lewis: The U.K. retailer with 80,000 or so partners, measures itself on their happiness. One of the founding beliefs, the happiness of our people. And the boss who gets a bonus, exactly the same percentage of his or her salary, as everybody else. It’s distinctive. It’s compelling.
What’s next employer brand thinking and what’s your own role in that, as its original creator?
Well, there are four things that are keeping me busy, whether I’m writing about them or doing something about them:
- First, I believe the employer brand is a great concept, but it remains too daunting a challenge for many of those presently responsible. The typical employer brand manager gets this, but they are trapped within the business of doing stuff right, which will engage, communicate, and recruit – points we made earlier. Getting into the heart of what’s going to transform the place is not really their bag. And what are their career ambitions? Maybe Head of Corporate Affairs, maybe Head of HR? Well, the point I made earlier, I believe employer brand management when it’s up and running and as I described, must be a springboard for the top. Now, I want to write something about that, suitably researched.
- Secondly, raise the profile of the employer brand amongst City fund managers and analysts. I want to harness their brain power and their need to really get under the skin of the companies they consider investing in. Get them probing this whole area. Get them seeing the human resource director, not just the finance director, the chairman or the CEO. Surely, it’s essential in forecasting future earnings. Otherwise, they’re just looking at the numbers. Somebody said, it’s like driving using the rear view mirror. The tougher the questions from fund managers, the higher the chances of seeing people emerging who can answer them.
- Third, changing the way M&A is managed. I’ve helped on numerous deals, I’ve done deals myself, and I know the pressure for completion of a deal, how powerful that is. It’s a mixture of greed and fear. Look at M&A league tables, they show deals done. They don’t show post-completion success. BUT, when the merger or acquisition fail and people fret about why, up come employer brand area reasons. Cultural differences, leadership disagreements, failure to integrate, too much pressure to deliver synergies promised during the deal-making period. It needs to change.
- Fourth, I think employer brand thinking has a potential beyond that of employers. Think about political parties, governments, nations, and groups of nations. What, for example, is the employer brand of England, post-Brexit, it’s an interesting subject. It’s going to change quite radically, some good, some bad. What’s the employer brand of Europe? Is it a place you want to work, compared to the Far East, compared to the United States? The theory of employer brand management is not that difficult, it’s the application that makes it so testing.
I’m keen to compare notes with people for whom the above strikes a nerve.
Connect Simon via email email@example.com and check out his website SBAemployerbrand.com.