Tuesday, December 06, 2005

Employer branding, talent and engagement Part 2

Note: This blog has moved to systematicHR.com. Please update your links. Posts will be maintained on both sites through the end of 2005.

So last time we talked about communicating brand and an overview of a chain of effect beginning with the manager communication and ending with the shareholder returns via the Microsoft model.

Andrew posted a link to David Kippen. I found this post about branding, talent acquisition and retention equally interesting. The following text is from David's blog:

Let’s assume key employees are leaving, that we’ve developed consensus that there’s a problem, done our due diligence by conducting exit interviews and qualitative and quantitative research among current employees. If our research indicates employees are being lured away by more generous time policies, better retirement plans—or even better pay, if there’s money and will to address it—HR may be able to do something about it. Now, I don’t want to suggest that HR has no operational impact: if research shows managers lack management skills, for example, HR can create training programs to address issues like this, too. But if the root problem is a misalignment between what the organization says about itself and what’s true about it, HR will need help to effectively address the operational issues that define “your work.”

This is where the need for a resonant, robust internal brand comes into play. Because it messages to what we do and why we do it, the internal brand serves to unify “my work” and “my organization.” Think of the internal brand as a clear light on a dark night: by aligning what we tell the marketplace with what we ourselves believe, a strongly-articulated internal brand helps managers and employees voluntarily align their work with their organization’s mission and values. And that voluntary alignment is a much stronger key to retention success than anything leadership can put in place if the recruitment promise doesn’t receive a payoff in the real day-to-day work experience.

David's idea of "voluntary alignment" is what I would call engagement. Employees who are engaged feel a stronger tie to their work and their employer. Repeating myself from a previous post, we find that cash outlays for direct employee benefit are very important for recruiting, but not as important for retention. They key factor here, is if you can move employees into the satsified and engaged range, you are not as at risk for employee attrition because employees now want to work for the company for reasons other than compensation.
  • Employee Acquisition: Cash Compensation, Benefits

  • Employee Retention: Total Compensation, Work-life balance

  • Employee Satisfaction: Work culture, stress, ability to impact work

  • Employee Engagement: Culture, job design, ability to impact customer, management.

  • So when David talks about why employees are leaving (better pay, time off, benefits...) the effective communication of the positive employer brand to engage employees would have minimized the entire issue of high attrition.

    At the same time, Wyatt's Communication ROI study is suggesting a direct tie between communications to employees and ROI.

    The study also found that a significant improvement in communication effectiveness is associated with a nearly 20 percent increase in a company’s market value. Specifically, the study identified nine communication practices that are directly linked to an increase in market value. The three practices associated with the largest increase in shareholder value are driving managers’ behavior to communicate effectively, connecting employees to the company’s business strategy, and following a formal communication process.

    I'm taking the "connecting employees to the company’s business strategy" as more branding. In addition to the impact to the shareholder value, "Companies with high levels of communication effectiveness were 20 percent more likely to report lower turnover rates than their competitors."