The pandemic-hit world economy didn’t create the war for talent. It intensified it further. The ongoing global talent shortage was post-pandemic described as the era of Great Resignation. 92% of employers reported having too few or no qualified applicants for jobs they were looking to fill.1 Many SMEs took the biggest hit. As a result, there is even a harder competition for talent than ever before. Today there are three main questions employers need to address urgently: Why are some companies experiencing workforce shortage while others are not? What is the best way of winning the war for talent?
“The pandemic-hit world economy
didn’t create the war for talent.
It intensified it further.”
A pandemic-stricken society caused millions of people to reassess their lives fundamentally. They began rethinking on what, why and who is important to them in life. Some of the questions that were accelerated in the minds of many run along in the lines of: Is this the kind of work that I want to keep doing for the rest of my life? Should I quit and open my own business instead of working for others and making the rich even richer? The ease of finding alternative sources of income through the internet and working independently from home makes more sense than ever, right?
Research conducted by the American Management Association revealed that in organizations with more than 1000 employees, 61% of respondents considered staff to be less loyal now, compared to ten years ago.2 Low morale was the most commonly identified consequence of decreasing loyalty (84%), followed by high turnover and disengagement, (80%), growing distrust amongst colleagues (76%), and lack of team spirit (73%).3 These are disturbing figures. Yet, when we ask directors, managers and executives, “What is your company’s most valuable resource, the near unanimous reply we hear is a cliché: “Our people.”
Employer Branding Formula (EBF)
Everything has been figured out except how to work. Is it not strange that we have simplified almost every business process, accelerated the speed of every communication tool, brought all apps in one mobile phone, got access to unprecedented amounts of information etc. and yet we are still left with the need of extending our work hours, feeling more stressed, experiencing pressure and burnouts? Employees are going through their work hours by applying a series of insignificant little Know-Hows. What is being overlooked is that the Know-How needs to be complemented (not separated) with the Know-Why.
“Everything has been figured out
except how to work.”
There needs to be a durable formula for the workforce’s fulfillment. As Dr Ernest Dichter found in his research, “the ‘why’ and the ‘how to’ of human motivations are interrelated.” So, this formula needs to be based on not only on the ‘how’ but also on the ‘why.’ When the Know-How and the Know-Why are together instead of replacing each other, we could work smarter instead of just harder. Working hard is a culture of devotion. Working right is a culture of excellence.
Today’s young people are not just younger versions of you – they have different expectations of life and work, and they’re shaking things up to induce change. Studies have shown that meaning is so important to people that they actively go about re-crafting their jobs to enhance their sense of meaningfulness.4 A new generation of talent has the potential to add energy, innovation and freshness to your organization. But at the same time, they can be disruptive, challenging and energy-sapping. M. Pinkhasov and R. J. Nair describe the difference between generations in the following way: “To these generations, work looks more like a productive form of play rather than toil. If the baby boomers are thinking about work-life balance, the younger generations are focused on work-life blending where both form a single, pleasurable existence.”5
Companies can avoid the impact of the ongoing global talent shortage. Companies can win the intensified war for talent. Companies can prevent similar HR-related crises in the future. How? By focusing on Employer Branding. But Employer Branding cannot be achieved without the right workplace culture. And the right internal culture cannot be built and lived daily without long-term brand strategy because, as Prof. Peter Drucker put it, “Culture eats strategy for breakfast”. And, finally, long-term brand strategy cannot be developed without an overarching Purpose. In other words, Employer Branding is the one solution to all problems related to this issue and the simple formula to reach it is:
Employer Branding Formula (EBF)
Purpose => Strategy => Culture => Employer Brand
Employer Branding by Employees
Doing Employer Branding justice is not a tick-box exercise on the C-Suite or HR-Departments action list. Successful Employer Branding only becomes possible only when staff is fully involved. In many ways, Employer Branding depends more on the employees than on the C-Suite. According to Edelman Trust Barometer 2021 report, amid talent shortage and the era if Great Resignation, employers rank employees as most important stakeholder.6
In times of decreasing relevancy at both individual and organizational levels, disruptive forces are challenging organizations to reassess how value is created and how people (especially younger generations) fit into an evolved worldview. This is the moment in history when the concept of a unique selling proposition is increasingly a model of the past and when employees look for more than money in what they do at work. There is a stronger need for a powerful Employer Value Proposition (EVP). Putting Purpose at the core of business strategy will connect employees, suppliers and customers in unprecedented ways. This is because, as mentioned before, putting Purpose at the core of a corporation’s thinking guides strategy, which feeds the culture and that culture brings the employer brand to life. A study by PwC found that millennials who have a strong connection to the Purpose of their organization are 5.3 times more likely to stay.7 Even without the strong connection to it, employees are three times more likely to stay at Purpose-driven companies. In addition, the workforce is 1.4 times more engaged and 1.7 times more satisfied at Purpose-led companies.8
No Purpose = No culture = No Future. The financial community has become aware of this simple fact as well. For example, the UK Corporate Governance Code, published by the Financial Reporting Council, states that: “The board should establish the company’s Purpose, values and strategy, and satisfy itself that these and its culture are aligned.”
“No Purpose = No culture = No Future”
There is an increasing number of companies global in nature and of considerable size that do run on Purpose: Apple, Google, Ernst&Young, HBR, to name a few. And the network is expanding. At Google, for instance, it is said that they encourage their employees to spend the 20% of their time on something most beneficial for Google although it may not pay immediate dividends. IBM, for example, uses social Purpose to attract top employees motivated to engage and boost overall performance. A great proxy to look for input in this area is the luxury industry. Take Brunello Cucinelli’s Purpose of ‘Humane Capitalism,’ for instance. His genuinely ‘made in Italy’ luxury fashion label not only pays employees up to 20% more than the industry average, but staff members do not have to punch time clocks, nor are they expected to answer after-hours emails – in fact, it is not allowed. The company also donates 20% of its profits to a charitable cause.9
There are no great employer brands whose employees dislike what they do at work every day. According to a Deloitte survey, 73% of employees who say they work in a Purpose-oriented company are engaged, compared to 23% of those who don’t.10 Shared and aligned Purpose is a must-have to build strong cultures. It provides employees with a sense of belonging and helps them understand their role within the bigger picture. Research conducted by McKinsey confirms that meaning drives higher workplace productivity and in turn growth and profit.11 Employees of Purpose-driven organizations go the extra mile because it is motivating to be able contribute to meaning beyond their paycheck. The workforce of a meaningful organization goes the extra mile not because they are told to but because they want to.
External Effects of Employer Branding
Sir Richard Branson, co-founder of Virgin Group, was right when he said: “Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.” Similarly, if you take care of your employees, they will take care of your employer brand. There is a strong link between customer relations and employer branding.
“Clients do not come first. Employees come first.
If you take care of your employees,
they will take care of the clients.”
Sir Richard Branson
As employees become the ambassadors of the brand’s culture the relationships both within and without begin to be handled in a more humanized manner. This way brand ambassadorship spills over outside the company, attracting the best minds for the brand. After all, the potential talent a brand is looking for now could have been the brand’s customer before. As D. Darnell and R. Markey wrote: “One of the most important lessons that Net Promoter® companies taught us was that the system’s success in unlocking customer loyalty relied on its ability to inspire deep commitment from employees — harnessing their energy, enthusiasm and creativity.”12
Prof. Chris Roebuck, a British economist who advises top organizations on maximizing employee performance through effective leadership, asked me, when I was Aston Martin’s CMO, about the company’s Customer Relationship Management system. The answer was as unexpected as it was candid, “We don’t have one – yet it works.” In other words, successful relationship management is not only about the system, the infrastructure or technology, it is first and foremost about the internal mindset that lies at the heart of an organization’s culture. The catalyst of the mindset, the guiding compass and the path to an interconnected culture is rooted in the brand’s inner Purpose. Technology certainly adds value in terms of empowering people with tools and information, but it can’t replace a deeply ingrained Purpose that radiates from within. If shared and aligned internally and externally, Purpose has the power to unleash the type of passion, cohesion and consistency no CRM system has yet managed to replicate.
Satisfied Purpose-oriented employees are nearly 50% more likely to promote their employer externally.13 Like consumer loyalty, employee loyalty needs to be built over time. As branding and social media specialist Simon Mainwaring says: “Ensure your employees understand what your brand stands for so they can be your first line of word-of-mouth advertising.”
Becoming a Purpose-led brand is not a mathematical issue – it’s a geometrical one. Euclid, often referred to as the ‘Father of Geometry,’ was an ancient Greek intellectual who created an axiomatic system worth remembering. Euclid stated that if two things are equal to the same thing, they are equal to each other. If all the individuals within a company (including the leadership) can be equal to the brand rather than the leader or the CEO, they would all be equal to each other. A strong set of arguments can’t unite people, but a strong philosophy can. A mathematical model may be able to connect individuals, but a geometrical model can unify them. In other words, a successful company can’t do what a successful brand can, namely bond teams together. It represents a uniting canvas for shared and aligned Purpose.
“Ensure your employees understand what your brand stands for so they can be your first line of word-of-mouth advertising.”
In order to help the team to fully embody an overarching Purpose, it is necessary to create unquestionable awareness around exactly what the company stands for. When the Purpose and long-term strategy of a brand is understood well, all future decisions suddenly become clear. It’s almost as if the internal culture of the day-to-day business life runs itself. As Harvey Golub, ex-CEO of American Express, explains: “If everyone understands [what the brand stands for], we won’t need thick employee manuals, management training programs, or pricing schedules for the services we sell. Everyone will instinctively do the right thing.”
Leonid Matsih, philosopher and theologian, stated in one of his lectures that rituals help us sense the meaning of life. Through relevant rituals the team can sense the meaning of the brand better. Activities with ritualistic value include fireside storytelling, drawing, meditating, expeditions, roundtable conversations, dancing, ceremonial-theatrical performance, creative writing, playing a musical instrument, singing etc. But it’s not about doing a banal Walmart-style ‘morning chant’ with your staff to kick off your daily business routine. For example, if you are Price Waterhouse Coopers and your Purpose is ‘To build trust in society and solve important problems’,14 then creating a trustworthy working environment is key. Therefore subtle, institutionalized rituals such as five-minute insight-exchange sessions every other morning can help create an environment of stimulation and shared understanding. Such rituals can raise awareness among employees about what the brand stands for and, consequently, strengthen the employer brand.
Measuring Employer Branding
When was the last time you asked the team members or the C-Suite what your company stands for? What are its values or philosophy? What is the vision of the founder or the CEO? Long-term objectives? Why does this organization exist in this world? In order to glean a much better understanding on the evolving repsones to such questions across an entire organization, companies can use an internal measurement tool called Purpose Review Metric (PRM) that uses a single simple question for evaluation.
Implementing Purpose reviews are just as important as performance reviews. Measuring Purpose helps to understand if people are fully engaged and feel part of the bigger picture, inside and outside of the organization. The Purpose Review Metric (PRM) question can be helpful with this. This simple question works because it uniquely measures internal culture components that are directly related to an employee’s experience and journey within the organization. The PRM question is measured on a simple ten-point scale and is constructed as follows:
Purpose Review Metric (PRM)
“How inclined are you to recommend your employer
to those closest to you, i.e., family, best friends, relatives, etc.?”
For smaller organizations, aiming for at least 80% in the upper quartile is good enough. For larger organizations as well as to measure variability across geographies, departments or divisions, the Net Promoter Score methodology can be applied: adding up your responses and subtracting the percentage of detractors (1-5) from the percentage of promoters (9 and 10). The score is a whole number that ranges from -100 to 100 and us a very good proxy for how effective your Employer Brand works for you (or not).
Winning the War for Talent
The war for talent isn’t showing any signs of slowing – to the contrary. It’s an employee’s market now. Brian Kropp, chief of human resources research at Gartner, says: Employers “can’t keep people from quitting and can’t hire people fast enough.”15 Spotting talent ahead of others, attracting talent and talent retention are among the main goals for a growing number of firms today. Employer Branding is important in all processes related to the competition for talent. It is important because it ensured substantial competitive advantage in particularly the sequence of six key processes:
Before anything else, being able to distinguish between the processes of talent acquisition and talent recruitment is important because, according to a report from Randstad, it can pay big dividends for an organization’s HR function.16 Talent recruitment calls for a long-term view, while talent acquisition is more immediate.
“Employers can’t keep people from quitting
and can’t hire people fast enough.”
Creating the right Employer Value Proposition (EVP) will help you win the war for talent. At Brand Affairs, we collaborated with Mercuri Urval, a leading global executive search, professional recruitment and talent advisory firm, and published a study in 2020 focusing on EVP.17 Our key findings outline six areas that pay high dividends for Employer Value Propositions. The first four out relate to: transparent communication, work-life balance (flexibility), meaningful work and perspectives for professional growth. The top two have the most impact on EVP: the brand’s reputation/prestige and the direct relationship/communication skills of executive leadership. Another important finding of our study was that the monetary factors are less important than people think. Pay and benefits are important, but less to than leadership and other soft skills required to leading people.
It is critical to find ways on how to raise job satisfaction levels. Job satisfaction levels can be raised by, for example, offering uniquely customized work styles (WFH, hybrid, shorter workweek etc.), promotion and rewards/bonuses. Rewardin good performance for instance is more effective when recognized in the moment, rather than ‘kept for the year-end’ review. It adds focus and creates immediate relevancy, rather than delayed gratification that risks being diminished over time. In a world where uncertainty is widespread, empowering your workforce and providing them with certainty, fulfillment, stability and a vision of a bright future is very effective. In a communications age when it is ever harder to distinguish genuine information from subjective or indeed outright wrong information, there is a pressing need for objectivity and clarity. Consequently, there is a stronger need for firmness and reliability. Employer Brands can jump into this gap and help employees find, regain and retain direction, values and orientation.
According to a survey by Pew Research Center, most workers who quit a job in 2021 cite ‘low pay’ and ‘no opportunities for advancement’ as major factors.18 Staying ‘tuned in’ is a good idea, rather than wait for the a good employee to quit and at best invest time and resources to retain them, or at worst see them go (and invest twice as much to find and hire someone else.)
Niche brands such as Swiss based Ricola and Rivella are good examples in this context. The lessons to learn from them include joint exercises between marketing and HR on making value systems continuously visible and tangible within the company. So, it’s not just about a one-time PowerPoint presentation by the CEO on who you are and what you stand for. But how to make the intangible tangible? Examples abound: imagery, videos on public screens at the workplace, relevant quotes on the walls, social events that deliver the message on values. Or how about a social activity such as an expedition to an archeological site if your values are about exploration, curiosity, creativity, discovery etc. Tangible objects could be customized game cards, Rubik-cubes, accessories or equipment gear. All serve one objective: framing and adaptation of language as means of a conduit to shape culture. The first lesson here for SMEs is to make their EVP tangible, visible, physical or tactile. The second lesson is to keep it continuously alive in day-to-day culture. And the third lesson is to periodically measure internal culture.
Companies can stay ahead in the war for talent by recruiting from within. More and more companies are investing time and money in training their existing workforce. C-Suite, HR and Brand Managers must join forces to build the necessary internal culture for it. For example, the luxury industry is famous for its talent factories with mentorship, apprenticeship and mobility programs. Luxury brands continuously raise and groom their designers and managers. In their research, INSEAD’s Shipilov and Godart found that the real source of value of luxury conglomerates such as LVMH, Kering and Richemont is in “the way they exploit their diverse business portfolios to offer rich learning opportunities to both managers and creative talent. This is why their brands excel at design and business innovation.” Moreover, they pro-actively attract and spot potential talent ahead of others as “they prime the entry-level pipeline by sponsoring educational programs and offering apprenticeships to promising students.”19
Here are a few quick wins on where to get started:
Employer Branding is not a catch-all solution to winning the war for talent. But by doing a few things right, any company of any size can favour the chances of finding, attracting, and retaining the best people for them. A great starting point is to re-think how business strategy relates to Purpose and values, and how these in turn shape stronger culture. Or in the words of Aristotle: “Where your talents and the world's needs cross, there lies your purpose.”
1 Publisher Guest Contributors. “How a Tech Stack Can Help Small Businesses through the Talent Shortage.” Nasdaq, https://www.nasdaq.com/articles/how-a-tech-stack-can-help-small-businesses-through-the-talent-shortage.
2 “Survey Finds Employees Less Loyal Than Five Years Ago.” 01 June 2015. <http://www.amanet.org/news/10606.aspx>.
3 “Employee Loyalty Is a Rare Commodity.” CGMA. 13 Feb. 2015. <http://www.cgma.org/magazine/news/pages/201511807.aspx?TestCookiesEnabled=redirect>
4 “What Makes Work Meaningful – Or Meaningless.” MIT Sloan Management Review. <http://sloanreview.mit.edu/article/what-makes-work-meaningful-or-meaningless/?utm_medium=social&utm_source=twitter&utm_campaign=featjune16>.
5 Pinkhasov, Misha, and Nair, Rachna Joshi. Real Luxury: How Luxury Brands Can Create Value for the Long Term. Basingstoke: Palgrave Macmillan, 2014.
6 Companies Retaining Talent during the Great Resignation ... https://thefifthskill.com/companies-retaining-talent-during-the-great-resignation.
7 PwC Study, https://www.forbes.com/sites/caterinabulgarella/2018/09/21/purpose-driven-companies-evolve-faster-than-others/#1f5c4bc755bc.
8 The Energy Project and Harvard Business Review study https://theenergyproject.com/why-you-hate-work-2.
10 Vaccaro, Adam. “How a Sense of Purpose Boosts Engagement.” Inc.com. 18 Apr. 2014. <http://www.inc.com/adam-vaccaro/purpose-employee-engagement.html>.
11 Keller, Susie Cranston and Scott. “Increasing the ‘meaning Quotient’ of Work.” McKinsey & Company. <http://www.mckinsey.com/business-functions/organization/our-insights/increasing-the-meaning-quotient-of-work>.
12 Darnell, Darci, and Rob Markey. “Net Promoter for People: Give Employees a Voice, Get Their Best.” Bain, 29 Apr. 2020, https://www.bain.com/insights/net-promoter-for-people.
13 Imperative and LinkedIn Study of on the role of Purpose in the workforce <https://cdn.imperative.com/media/public/Global_Purpose_Index_2016.pdf>.
14 PwC Purpose Statement, <https://www.pwc.co.uk/who-we-are/corporate-sustainability/our-Purpose.html>.
15 Jacobs, Emma. “What Makes Staff Want to Leave Their Jobs? Ask Them.” Financial Times, 21 Mar. 2022, https://www.ft.com/content/57556b65-f8c8-41f1-9f07-c6c470777229.
16 “The Difference between Talent Acquisition and Recruitment.” Hunt Scanlon Media, 8 Jan. 2020, https://huntscanlon.com/the-difference-between-talent-acquisition-and-recruitment.
17 2020 – Mercuri Urval & Brand Affairs Study Employer Value Proposition. https://www.mercuriurval.com/globalassets/pdf/ch/employervaluepropositionstudie2020.pdf.
18 Parker, Kim, and Juliana Menasce Horowitz. “Majority of Workers Who Quit a Job in 2021 Cite Low Pay, No Opportunities for Advancement, Feeling Disrespected.” Pew Research Center, Pew Research Center, 10 Mar. 2022, https://www.pewresearch.org/fact-tank/2022/03/09/majority-of-workers-who-quit-a-job-in-2021-cite-low-pay-no-opportunities-for-advancement-feeling-disrespected.
19 “Luxury's Talent Factories.” Harvard Business Review, 18 May 2015, https://hbr.org/2015/06/luxurys-talent-factories.