Managing the internal employer brand - why bother?

Proponents of employer branding often suggest that organisations should manage the brand within the organisation, as a means of getting feedback from employees on their view of the employment experience. Some will go as far to suggest that by managing the internal employer brand, it is possible to change the company culture.  ( For example See Brett Minchington’s article http://www.brettminchington.com/free-resources/strategy/135-transforming-culture-with-employer-branding.html  ) So I am going to be a little heretical; brand management of the internal employer brand is a distraction from what HR should be doing.

A brand can be an identification or a mark that differentiates one business from another (through a name or a logo, for example).  The brand also symbolises how people think about your product. The concept of branding was developed initially in the sale of fast-moving consumer goods. Your brand identified your soap powder from all the others on the shelf, and reminded consumers of the associated advertising. The advertising had conveyed overt messages and subconscious associations. The brand was a communication from the producer to nameless millions of potential consumers stood in front of the supermarket shelf.  

Communication from those consumers back to the producer is limited. Sales figures provide the most direct feedback, but trying to obtain any other information is difficult. The producer needs to commission market research to obtain qualitative feedback from samples of consumers.

Outside the world of f.m.c.g. , other kinds of customer relationships exist, which are shaped by the complexity of the purchasing decision. These are described in my blog from January 2012 “What role does branding play in Employment Marketing?”  For example, consider a business-to-business transaction like the sale of an IT system. The seller will be dealing with the customer at length in many meetings. The purchaser will not be making an impulsive decision, but will follow a detailed purchasing procedure of RTT’s, short-listing and product evaluation.  The seller will have a brand, but the contribution of the brand to the purchasing decision is minor, compared to the detailed evaluation of the product.

Which purchasing scenario is the best analogy for an employee ( a consumer of employment) evaluating their current employment experience? Are they individuals unknown to us, unconsciously selecting an employment experience off the shelf? Or are they individuals we can talk to at length about their particular employment experience, and how they feel about it?

For most organisations, we surely have a close, direct relationship with the people who have currently chosen our employment product. Compared to the distant consumers of f.m.c.g. products, we know a lot about our employees; their profession, qualifications, family circumstances, how much they earn. A product manager of a shampoo or drinks brand would kill for that quantity and quality of information about his or her consumers.  And our consumers are easy to find – they are on the premises five days a week – just go out of the HR office and there they are!

 You can get direct feedback on how they feel about the employment experience. Here is a real example. A couple of months ago, my company moved offices. We moved from a tatty, poorly decorated building where the employees were spread over six small floors to a new, bright open plan office with the whole workforce on one floor. The new office is kitted out with new furniture and improved IT, and looks “seriously funky”.

Which would be the best question to ask my colleagues?   “What do you think of the new office?” or “Has the new office enhanced or diminished your perception of the employer brand?” 

We intended the new office to improve communication, and present a better image to clients. Shall I ask my colleagues “How has the office changed the company culture?” or shall I commission a survey to ask them “Has the change of office shifted your perception of the employer brand in respect of communication and general brand image?”

There may be situations in which direct conversation is not the best option. Employee surveys in which responses are anonymous can reveal insights that would not emerge otherwise. In general, direct communication with employees is preferred. I might incorporate our new building into our employer brand, by replacing the careers page catalogue photo of some posed models in an unknown office with a shot of some of our employees in our office. That will communicate something about our company to prospective candidates who I have no direct communication line with.  That is where the employer brand is useful.

I suppose some organisations are so big that the distance between the corporate HR function and the front-line staff is so great that an internal brand is necessary. The majority of the working population are employed in organisations of less than 500 people however, so direct communication should not be a problem.

If an HR function is considering trying to change the corporate culture by changing the internal employer brand, they must be devoid of ideas. It is basically trying to improve the product by changing the wrapping. There must surely be scope to change the culture by changing the employment product; organisational development, job re-design, changing the way managers manage, changing performance management systems, reviewing communications channels?  Or perhaps the pursuit of “best practice” has made the jobs in your company indistinguishable from jobs in your competitors. If you have a “me too” employment product, perhaps changing the wrapping is all you can do.  

 I am not saying “abandon the application of marketing to HR”.  I have long advocated using marketing as a model for HR. I am saying “apply all of marketing to HR, and you will find that branding is a small part of it.”   

The Eternal Internship and Youth Unemployment

Recently a colleague and I were talking to a postgraduate student at a university careers event, and the topic of internships arose. I mentioned that I had met a graduate in fashion design who wanted to get into fashion journalism. She had already done an unpaid internship with a publisher, and had recently been turned down for another internship with different publisher. She had been given the reason that the unpaid internship had been given to someone with greater experience.

My colleague then quoted the experience of an Italian friend who had been in London getting work experience in a travel agency. Her friend was on a paid scheme funded by the Italian government, but was surprised to find that she was working alongside four British employees who were on unpaid internships. The Italian graduate and the manager were the only team members being paid anything.

The postgraduate student then topped that story with the experience of a friend of his younger sister. This music technology graduate had secured an unpaid placement with a computer games company, in their music and sound effects department. The department of 20 consisted of a paid manager and 19 unpaid interns.

These anecdotes illustrate how inadequate is the UK government’s response to record levels of youth unemployment. Training in job search skills and unpaid work experience do help individuals become more employable; in effect they help the individual move closer to the front of the unemployment queue. But what use is that if the front of the queue is not moving into paid employment?  The graduates mentioned in the situations above had succeeded in the recruitment process to get a placement, against completion from many others. They had gained real work experience in the career of their choice. Some of these unpaid work placements could go on for months, but there is no paid job to go to.

From an individual’s point of view, it is advisable to get work experience to improve your employability. My son is an unemployed school-leaver and my daughter is soon to graduate in an arts subject. I will be encouraging both to find internships, unpaid if necessary, to be better placed in the one- million-long queue of unemployed 18-24 year olds. We are aware that the youth unemployment line is not moving forward fast enough, and there will be another year of school leavers and graduates joining it in the summer.

We need to identify the jobs where there are real skill shortages and provide training courses for those trades and professions. The costs per head will be more than the Government’s current cheap but ineffective programmes, but will result in people taking up paid positions which will actually reduce unemployment. Many of the shortage disciplines are various kinds of engineering, because the UK has failed to produce enough of its own.  

A more fundamental change to our education system is also required. The British education system needs to develop high quality vocational courses, as the German system has provided for decades. And -  this is the step that most British educationalists and teachers will struggle to comprehend – encourage bright pupils to take vocational courses. For most British teachers that sentence will be an oxymoron. In their minds, bright pupils do academic subjects, pupils who are no good at exams do vocational subjects.   I think the suggestion is too radical to explain – it just needs to be said at this stage, in the hope that it might sow a seed.

Easy Ways to Make HR Strategic

A long-running debate within Human Resources has been “how can we make HR strategic?”. Often this is linked with another navel-gazing debate within the function, “how can HR get represented at Board level?”.

Many HR practitioners claim they have succeeded on the strategy issue. They claim they have an HR strategy, and it has been approved by the Board, so they are now “strategic HR”.  Casting my jaded cynical eye of some of the approaches used, it seems there are several easy ways to get strategic.

Motherhood and Apple Pie.

Undoubtedly the most popular approach is to put out a document describing your HR philosophy and policies, and call it your People Strategy or Human Resource Strategy. A quick internet search will give you examples; universities seem particularly keen on this approach. This is a good way to reassure current and potential employees that you are nice guys, recruiting the best people for your organisation, allowing them to achieve their potential by providing career development and training, promoting equality and fairness.  

This approach does no harm, and is very useful promotion for the work of the HR Department. Unfortunately, even if it has been approved at Board level and has a nice introduction from the CEO, it isn’t strategic.

Provide enablers.

 At one level, this route to strategic HR status does appear to link HR initiatives to the business strategy. You get senior management to agree that they can’t achieve their business strategy without this vital latest thing from HR. For example, they cannot achieve their business strategy if employees are not performing, so our new performance management system must be strategic. After all, it’s now Part Of The Strategy.

You might be satisfied with that, but I am not. The enabler you have provided is a bolt-on extra to any business strategy of any organisation. It is as useful as your Facilities Department’s contribution to the IT strategy; computers need electricity, so we will ensure the supply of electricity. The IT strategy would be rendered useless without electricity, but consider an IT Director wrestling with the intellectual challenge of what systems to choose to support the business plan. He or she is not greatly helped by hearing that the electricity bill is paid, and there’s a back-up generator in the car park.   

Everything is strategic now. 

Particularly if you have a motherhood- and- apple- pie HR strategy and you have attached it to whatever business strategy they have gone with, there’s still one more easy thing to do; call everything strategic. Label things strategic and people will be impressed, just like in the Marks and Spencer adverts.  “This isn’t just a Management Development Course; it’s a Strategic Management Development Course.” ( for non-UK readers who haven’t seen these adverts http://www.tellyads.com/show_movie.php?filename=TA3444 )

Most strategies can be summarised in a few points. Some can even be summed up in a phrase, such as “pile them high and sell them cheap”, “shoot and scoot”, etc. A mass of HR people referring to their 110-point, 27-page strategy document is not strategic: it is an exercise in mis-naming the tactical, operational and possibly trivial. 

So, what is Strategic HR?

The only real HR strategy is the plan to manage the employment aspects of the business strategy, and some of those are not for public, or wide internal, consumption.  What changes to the workforce are integral to this organisation’s specific business strategy? For example, if the business is going to change its core technology, will it be better to retrain the existing workforce, or replace them with recruits who already have the new skills?   Or perhaps the business strategy calls for significant cost reductions, and one of the “people” options is significant off-shoring to cheaper labour markets.   

Many HR leaders would shy away from options that will be seen as a threat to the current workforce. HR people try to position themselves as the moderates who soften the blow, by providing retraining, or a caring redundancy / re-employment / outplacement service. The negative impact on the current workforce was caused by the decision made by “the Board” or “Senior management” or “line management” – but not us.

For HR to be strategic, (and to get a seat on the Board, if that’s important to you) HR people have to join in with the rough stuff, if necessary. That does not mean just understanding other business functions such as finance and marketing. Senior management don’t want you to be an amateur accountant or marketer, they need you to generate the options on the people side of the business. The effective options might include the tough ones.  Do most HR practitioners really want to play with the big boys?   

(If your sensibilities can cope with more of this stuff, read the companion article "Another way to make Human Resources strategic".) 

Employment marketing in the recession

It is over four years since the Lehman Brother’s collapse kicked off the global financial crisis, with its variants including credit crunch, double-dip recession, fiscal cliff and Eurozone crisis.   HR’s strategic response to the changed labour market has parallels to how a marketing director might react to a slump in the market for the company’s products.

Faced with declining consumer spend,  a major marketing decision is whether to keep the selling price high, and accept a lower volume of sales, or to reduce the price to defend volume of sales and market share. The most urgent task at the beginning of the recession was to reduce costs, including labour costs. Some organisations took the option chosen in previous recessions of making some employees redundant. That is the equivalent of the “defend the margin, but lose market share” option.  A distinct trend in this recession is that many companies have opted for spreading the agony wide and thin, and tried to find ways of retaining skills. That might have been by requiring full-time staff to accept part-time contracts to avoid redundancy and freezing the pay of all staff.

Bearing in mind how the power in the recruitment market has swung from jobseekers to employers in this recession, many organisations are finding ways of hiring lower cost labour. The growth of internships, either low-paid or unpaid, is an effect of the continuing recession. “Modern apprenticeships” offer 18 year old entrants an hourly rate that is half of the National Minimum Wage. A distinct “prospects cliff” has emerged between those who entered the labour market before September 2008 and their younger brothers and sisters. With almost a million 16-24 year olds unemployed in the UK, advertising an unpaid internship attracts a big response of over-qualified candidates desperate for work experience.

It is not a straightforward choice to exploit market conditions to obtain cheaper labour. As with a marketing director being mindful of the company’s reputation in the long term, the HR director needs to consider the impact on other stakeholders.  The introduction of internships and apprenticeships into a workforce might be seen as a positive contribution in tackling youth unemployment or as exploitation of the young as cheap labour. What decides the issue is how the permanent workforce is being treated. If they feel relatively secure, they are more likely to see it as a positive move. If they are not secure, they will see it as a threat of being replaced by someone cheaper.  There are limits to what internal PR can achieve here – you employ intelligent people, and they know when they are being shafted.

In the UK, whilst recorded unemployment is high employment numbers are also high. The headline figure showing high employment levels hide a large element of underemployment. Individuals are employed, but often working fewer hours than they would like to.

John Philpott, director of thejobseconomist consultancy and an expert on unemployment, said that of the 212,000 jobs created in the latest quarter, one in three were mini-jobs of fewer than 15 hours work a week and more than half (54%) provided fewer than 30 hours (The Guardian, 18/10/2012)

In a similar vein, let me give you some good news, and some bad news.

“Britain is heading for a fifth year of falling living standards, with official figures showing a decline in average earnings growth last year from 1.7% to 1.4%.

Unemployment fell and the number of people in work reached a record level in the three months to last November, but employers kept a lid on pay rises.”

They were adjacent paragraphs in the same article -  www.guardian.co.uk/business/2013/jan/23/unemployment-rate-fell

This phenomenon is a combination of organisations opting to spread the agony wide and thin, and individuals desperately trying to keep employed, even if underemployed.  Ironically, the villain of the story, the finance sector, is taking the other approach – dump some, but still pay big money to the survivors! 

Inevitably, coping with the continuing recession has forced many employers to take tough decisions with painful consequences.  Using marketing as a model for HR can generate strategies for changing the workforce to meet new and difficult market circumstances. For many HR practitioners, they do not want to initiate changes that might adversely affect the current workforce. It is easier to say that the bad news was caused by “a line management decision” or “a senior management decision” rather than an idea generated in HR. Despite all the talk of HR being strategic and deserving a seat on the Board, that cannot be achieved by shrinking away from the business decision. If you want to be strategic, take the lead in the hard stuff, not just the easy stuff.