This week saw the publishing of a very poignant piece on EB from LinkedIn.
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The world’s largest professional network chose to reveal the extent to which a poor or non-existent Employer Brand adversely affects the ability to hire talent. It’s proof, if it were needed, that we’re back to a candidate-driven market where organisations compete for credibility and credence with a candidate – rather than assume that throwing increased salaries at the problem will solve the central issue (namely, that talented professionals have choices and those are rarely made solely on remuneration).
There’s nothing new in this, of course. Anyone of a certain vintage involved in resourcing remembers 1995- 2008 as a nightmare. Attracting, securing and retaining people with the right experience, qualifications and team-fit became ever more challenging. Dot coms threw stratospheric bonuses and seemingly-lucrative stock options at candidates (particularly the impressionable fresh graduate population). In the private sector, candidates would regularly renege on offers when counter offers came from their current employers. In the public sector, progressively transferable skills led to an increased migration into the commercial/charity/not-for-profit worlds, leading to an increased reliance on contractors.
Here in 2015, with European economies largely recovering, many dot coms dot gone and unemployment still relatively high, the pendulum should have swung back in favour of the employer, right? But it hasn’t.
Though there are more qualified applicants for many positions, there are also a significant number of positions – and employers – still going begging.
If even the conservative estimates prove right, we are heading towards another recruiting war that will make the battle of the late 90’s and early 2000’s look like a brief skirmish. The underlying cause of this War for Talent (as McKinsey’s famous study of 1997 dubbed it) is neither technology nor the economy so much as a shift in demographics. And, like a shift in ecology such as global warming, this demographic change is gradual, inexorable and – once manifest – probably too far gone to solve in the near future.
Studies by the United Nations assert that the supply of workers aged 25-44 years will decline by 15% over the current decade. That means there will be far fewer prospects to recruit for mid-level roles – the core of the workforce.
The problem isn’t just a UK one, either. Executive Talent magazine reported that “The 2014 Accenture survey of more than 500 CEOs around the world shows that the competition for talent is the number one management challenge in Europe, and number two in North America.”
The attitude of workers, or what marketers call psychographics, is aggravating this demographic crisis. Whereas Baby Boomers and their parents grew up believing that jobs were scarce and, once obtained, should be tightly held on to, younger workers have a different view. Over 60% of workers surveyed in 2013 by Towers Perrin said there is no appropriate amount of time to stay in any one job; only 10% surveyed felt one should stay “3 to 5 years”. The same study found that 12% were actively looking or had already found another job, and 44% were open to discussing other opportunities. In other words, over half – 56% – of workers are either seeking or passively considering different employment.
This GenX point of view has seeped into the psychographics of not only their successors, but also that of the Baby Boomers. Since the mindset is transgenerational, those who subscribe to it are known collectively as “The Emerging Worker” (which includes the notoriously networked and influential “GenY” and what many see as an even more hardcore “GenZ”).
The Emerging Worker is heavily influenced by brands. This is in part due to their upbringing – from the Boomers on to today, people are marketed to from infancy through every phase of their lives up to and including the end of it. Boomers grew up on Radio and TV; GenX on TV and perhaps MTV; Gen Y on multi-platforms as well as multi-channels. And the sheer weight of media bombarding consumers in the developed countries forces them to seek the security of reference points to make sense of all the clutter. Those reference points are brands, i.e. names and symbols that stand out because they are known and trusted.
Despite predictions that the Web would destroy brands (the argument was that the transparency of prices on the Net would make brands irrelevant), the opposite occurred. Brands became more important because people need help in deciphering all of the offers available to them. And now there is evidence that brands influence people’s choice of employers (and even vice-versa).
According to a recent study, a company’s brand has a direct influence on people’s perceptions of that company as an employer. Millward Brown runs a global brand equity study that has examined more than 15,000 brands across the world – the BRANDZ study. This study measures the equity of these brands versus competitors and validates the results against sales performance.
In 2014, an employment question was added to the BRANDZ study. The question was:
“Think of what the companies on your list would be like to work for. It doesn’t matter whether you work in the industry or not, or don’t work at the moment, it’s just your impressions we are interested in. So do you think (Brand in question) would be a very good , good, poor or very poor place to work?”
Millward Brown selected 1,317 brands that had common brand and company names – companies like McDonald’s and Nokia. Over 35,600 people were personally interviewed across 16 countries and 18 product and service categories. Each respondent looked at a list of the key brands in the category and answered for every one with which they were familiar.
The results showed that the better-known a company was, the better it was perceived to be as a place to work. When the results were adjusted for cultural differences and companies were compared to their competitors, better known brands were perceived as a “Very Good Place to Work” (+9.5) by a wide margin over lesser-known brands (-6.6) 4. An interesting facet of this finding was that the brands/companies known for low prices were less likely to be perceived as good places to work (-4.1) than brands/companies known as being “expensive” (+2.7).
“Companies with attractive brands are surely attractive companies,” the report concludes. The ‘first date’ with the company is not so blind if there is already a relationship via the brand. Conversely, if the initial encounter is via a poor brand, there may be more courtship necessary.
What about companies that do not share their corporate name with one of their brands? This suggests they might be well advised to play on the strengths of their brands and make some connection with the corporation by ensuring that there is clear reference to them in recruitment communications.”
The Millward Brown BRANDZ results correlate with a study that the 52N team was involved with recently, conducted on behalf of a high tech client. We asked 120 software engineers working in a prime geographical location how they would go about looking for a new job. Their top choice was networking with their friends and acquaintances. Second, however, was “a company’s Website”. This ranked far above “Online job boards” (fourth).
The implication is that faced with finding a job, these highly prized professionals would go to a short list of companies they already had in mind and shop their opportunities online.
Conversely, if your organisation is not on their short list, the only hope you have of attracting them is if there is nothing available for them at one of their short list employers.
Organisations in this second tier are, in effect, living off the “crumbs” that fall from the first tier organisations’ “tables”.
The LinkedIn report simply reinforces the fact that a strong and compelling EVP differentiates you from your competitors and gives you the best opportunity to sustainably recruit the talent you need. It’s tough on those organisations who have not addressed this. And it’s going to get tougher still.
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