Charlotte Housden Bernard Hodes Group Strategic Human Resources Conference 7th February 2007 Geneva

Or… have I stumbled into a Marketing presentation? Using Employer Brand to attract talent Or… have I stumbled into a Marketing presentation?

So, as we’re talking about brands….. Do you know which are top 10 Best Global Brands in the world (Interbrand 2006)? Or which are the 10 most Respected companies in the world (PWC 2004)? Or which are the top 10 MBA Employers in the world (Universum 2006)?

Best Global Brands 1 – Coca Cola 2 – Microsoft 3 – IBM 4 – GE 5 – Intel 6 – Nokia 7 – Toyota 8 – Disney 9 – McDonalds 10 – Mercedes World’s most respected Co’s 1 – GE 2 – Microsoft 3 – Toyota 4 – IBM 5 – Coca-Cola 6 – Dell 7 – Wall-Mart 8 – Citigroup 9 – Procter & Gamble 10 – Hewlett-Packard

Top 10 MBA Employers in the world

The talent squeeze

Working age populations Working age taken as 15-64 years

Working age populations

Reduced talent pool Aging populations Decreasing birth-rates Increased life expectancy Reduced talent pool There will be “a significant exodus of talent and experience in the next two decades and a dearth of new employees to step into roles that require specialized skills” Accenture (2005)

Global employee engagement levels Towers Perrin global workforce study (2005)

Declining employee tenure in the USA 1/3 in jobs less than 2 years 2/3 in jobs less than 5 years 1/2 employed on Interim/Contract basis 3.5 years average Years of Service Depression Survivors Pension Seekers Victims “Free Agent Nation” 2000 US Department of Labor, Employee Tenure Surveys, (1995-2000)

Baby Boomers: 1946–1961 Generation X: 1961–1981 Generation Y: 1981–1997/2000

Maslow’s hierarchy of needs

Bigger Meaning: The Australian Leadership Foundation When looking for a job Gen Y’ers want (in this order): Training Management Style Work flexibility Staff activities Non financial rewards Salary

A less interested talent pool Aging populations Decreasing birth-rates Increased life expectancy Reduced talent pool Declining tenure Self-actualisation Drop in engagement A less interested talent pool

Together… an attraction and retention issue CIPD 2006 recruitment, retention and turnover survey: 82% of organisations reported difficulties in recruiting 69% reporting difficulties in retaining RightCoutts 2006, in Management Issues 2006 41% of Senior HR professionals thought retention of key staff was their most critical HR issue Accenture on-line survey 2006 67% of senior directors in N. America, Europe and Asia think the inability to attract and retain the best talent is one of their top 3 threats to success

Some HR Levers Employer Brand “what do people think of us?” Performance Management “where is our talent in the organisation?” Individual and Team Competence Leadership Performance Review Talent Management “how do we manage our talent?” Values and Culture Core Work Processes HR Processes Recruitment Processes “how we do attract talented people to us?” Organisation, Team and Job Design Reward & Recognition “what keeps our talent with us?” Communication “how do we talk to our talented people?”

Employer Brand: a short summary for the uninitiated…..

What is it? “The package of functional, economic, and psychological benefits provided by employment, and identified with the employing company”, Ambler & Barrow 1996 A long term strategy that establishes an organisation’s identity as an employer Which differentiates them from competitors in the employment market

Where do you start? The development of an employee value proposition (EVP) Capturing in one statement, the sum of “everything that people experience and receive while they are part of the company” It must be aligned to the overall brand and reputation

Who is it for? Potential employees – to persuade more and better applicants to apply and accept offers Current employees – to reduce turnover, increase employee motivation, a sense of belonging and align behaviour to the organisation’s needs Consistency of messages across both groups is vital as the organisation has to deliver what it promises Projecting an unrealistic image may improve recruitment but can increase attrition

Brand Strength Brand strength Attraction of the right candidates Employee engagement and retention Differentiation from competitors Customer engagement and retention Employer Brand The unique and differentiating promise a business makes to its employees and potential candidates Employee experience Actual delivery of the promise throughout the employee lifecycle + Attraction of high quality employees is a competitive necessity Engagement of high quality employees is a bottom line issue

Employer brand – a three step process 1.Brand insight 2. Brand development 3. Implementation Competitor analysis Brand positioning vs competition Understanding vision for the business and employees Understanding best of the current employee experience and improvements Alignment of the consumer brand/ employer brand Concept development Concept testing Refinement and development Recruitment guidelines and roll out for recruitment advertising Design of internal launch process Production of comms materials, internally and externally Employee Value Proposition Brand book Communication strategy Communication tools Employee vision Personality Key messages Strengths/areas to improve

Employer brand benefits Significant decreases in cost per hire Reduced cost of recruitment - efficiencies maximised throughout the recruitment process Reduction in recruitment marketing costs over time Greater numbers of higher quality applicants Higher performing employees Increased retention rates Stronger reputation in the marketplace Increased ability to attract specialist talent in a difficult market

Employer brand benefits at our clients Diageo - Began with an attrition rate of 18%, costing £4 million. In 14 months they reduced attrition rates to 7%, recouping the costs of the initial research 30 times over. GSK - applied the proposition and guiding principles to their recruitment process, increasing the number of offers accepted from 83% to 96% Philips - are now receiving 10 times as many quality applications from graduates and MBAs

Philips Case study

Philips: The background 2002 global recruitment redesign programme found quality of service could be improved and needed to focus on proactive talent recruitment Identified inconsistent positioning of messages to prospective employees – not addressing them as “One Philips” They weren’t reaching targets they’d set to attract/ retain the best talent They also wanted to find out how potential employees regarded the company as an employer

Philips: their vision “To be certain that we are able to attract, recruit and retain the sort of talent that will give our business competitive edge.” “To be sure that our employer experience will enable and motivate our talent to work in a way that is ‘one Philips.’ Providing maximum satisfaction for both the organisation and the individual.”

The research 29 internal focus groups 18 external focus groups 3500 internal survey respondents 1000 external survey respondents Both Sales/Mktg and R&D people, different ages, length of service Netherlands, Germany, France, UK, Poland, USA, India, China

Some of the outputs Employees didn’t not know the full range of products/services Everything Philips makes impacts every aspect of consumers’ lives, something to be proud of and make more of Philips could be too formal – there needed to be more personality in the way the brand was communicated They wanted Philips to be One company – all working together, united in one purpose Proud and confident about what it does, passionate People and products could have equal and united prominence Offer great reasons for coming to work everyday An “icon of innovation” Global and diverse

“Touch lives every day” – The Trial

“Touch Lives every day” “ Is not only a description of how Philips should approach prospective and existing employees, but also a call for managers to ensure the company delivers on its promises “ Jo Pieters, Global Vice President Recruitment, Philips, The Netherlands

Philips Touchpoint Wheel Exit interviews Campus recruitment Retention Career development Internship Awareness Performance review Post- Application Experience Pre- Application Experience Career site Employer Brand Commitment Management behavior Company brand Consideration Informing / Involving people Invitation letter Engagement Application Experience Introduction Interview Preference Rejection letter Assessment Contract handling

Ensuring Global Consistency – The Toolkit

Ensuring Global Consistency – Deployment

Guide for Hiring Managers

Building brands from the inside out “ Winning the war for talent means primarily focusing on the retention of your current talent and [then], building a strong position in your key labour markets… …a brand that is only visible in external communications is less valuable than a brand that is truly lived inside. Each and every employee should act as an ambassador of your brand and that requires a strong recognized internal and external employee value proposition ” Jo Pieters, Global Vice President Recruitment, Philips, The Netherlands

Philips Labor Market Ranking – China Employer brand launch Dec 2003

Philips Labor Market Ranking – Europe Employer brand launch Dec 2003

Lessons learned Don’t underestimate the size of such an initiative Even if you have clearly defined the scope, focus and approach, you have to make tough choices along the way about what to keep in or leave out Getting the whole organization behind the Employer Brand is critical to making it a success You must get commitment and involvement of people beyond HR, particularly in marketing, and get it early on!

So what does this mean for you… …and your Employer Brand?

Some final questions for you Do you know what your organisation represents? Have you tested out your values, your culture? Have you looked at your brand values? What does this say about your organisation? Who is the real competition in the employment market (not just the ones you know or think it should be?) Is your brand attractive to new recruits? Does it help you present a strong employer brand in the marketplace? Who manages your Employer Brand – HR or Marketing? What are you going to do with this information when you get home?