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Our Company Needs You: The Rise of Employer Branding

With limited growth prospects on the horizon the industry’s battle for talent is intensifying — and companies are investing in employer brands in a bid to attract the best of the best.
Source: Shutterstock
By
  • Robin Mellery-Pratt

LONDON, United Kingdom — "Stop leading through fear and stop being jealous of newer employees," reads a comment posted this year on the recruitment platform Glassdoor, a kind of Trip Advisor for companies, which has more than 8 million company reviews, chief executive approval ratings, salary reports and interview questions provided by current or past employees. The anonymous post, entitled "Beware…" was left by a (supposed) current employee of Christian Dior. The maison is not the only fashion brand on the receiving end of negative comments on the site.

Comments on Burberry and Prada read, respectively: "Exciting at first, then you realise how little they care," and "rapid decline/poor management and corporate clowns". Glassdoor has put fashion companies and conglomerates at the mercy of arbitrary and indignant opinions. As with most online forums where people like to vent, comments should be read with a pinch of salt, but brands shouldn't underestimate their power to put off potential employees.

And the timing couldn’t be worse. With limited growth prospects on the horizon, the fashion industry’s battle for talent is intensifying. Not only do companies need to stand out from the competition, brands and conglomerates are investing in building employer brands to become the employers of choice across all industries; from Silicon Valley to the financial sector, everyone is after new kinds of talent — especially digital.

“In the context of a market growing at very low single digits, the channel scenario changing dramatically from off-line to online distribution, and also shifting consumer behaviours and patterns, the quest for talent is really, really key to succeed,” says Federica Levato, one of the authors of Bain’s 2015 Global Luxury Goods Report.

Multiple skills shortage

In 2014, Price Waterhouse Coopers, one of the world’s largest firms of accountants and financial services professionals, published its 18th Global CEO Survey. Of a panel of over 2000 chief executives, 73 percent named skills shortages as a threat to their business, compared with 46 percent six years ago.

“In a survey we conducted in the US, the majority of CEOs said that they were not prepared to attract the talent they needed. They need to brand themselves as the employer of choice — that is happening more and more in a globalising industry. Especially with European companies that are going into the US, or the reverse, or to Asia — when they go to a new market nobody knows them,” says Ricardo Alver, managing director of 24seven, a leading employer branding consultancy firm in the fashion industry.

“Talent is clearly that one intangible aspect that’s growing and impacting the bottom line, and there’s less and less of it. We’re dealing with a shrinking talent pool of people we need, no matter what company,” says Claudia Tattanelli of employer branding specialist Universum.

Nearly 70 percent of the respondents to a BCG and BoF survey published in April 2014 said creative professionals are “impossible” or “very difficult” to find, and over half of luxury and fashion firms struggle to attract brand directors.

Digital talent is one of the main drivers fuelling competition for talent between companies. “The hiring hurdles aren’t much lower for database managers, web developers and technical managers — roles that have generally been “back office” in the luxury and fashion business but which, in a digital era, have the potential to make a big difference to a company’s market positioning,” say authors of BCG and BoF’s joint report, Jean-Marc Bellaiche, Thomas Gaissmaier and Sarah Willersdorf.

Time for a new brand?

Employer brands range in complexity and focus, but some prevailing trends have emerged. Career development, transparency, social and environmental responsibilities feature in many of the most prominent fashion-employer’s messaging, including Kering and LVMH. Distinct from these companies’ consumer brands, employer brands seek to cast businesses — not products — in the best light. “It’s you deciding what you want to be known for as an employer, instead of your company or your brand,” continues Tattanelli.

The idea of selling a job was first explored by careers such as the military, which needed significant numbers of recruits, professional services, which needed to educate talent on the nature of the career, and industries like tobacco, where disassociation from controversial products and an alternative narrative were beneficial. In less cynical times, prospective employees trusted what companies told them. In today’s connected world, they expect companies to show them.

Employer brands are most prominent across social media, such as Twitter, Facebook, LinkedIn, and the recruiter press and job portals. Analysts estimate that about 60 percent of companies have a presence on Facebook for recruiting purposes alone. “Now it’s not an option for a company to have an external promise and then not continue with that, because your own employees social media presence will become your voice externally,” says Tattanelli.

How to be a millennial magnet

Brands are also evolving their messaging to speak to applicants from Generation Y. Where as Gen X’s priorities focused on social needs and prestige (salaries, bonuses, perks and packages), Gen Y expect transparency, flexibility, creativity, autonomy, and — crucially — development. “They want to develop in a creative and dynamic working environment. They understand innovation is the key of all companies, working in a creative and dynamic environment that fosters collaboration and innovation,” says Tattanelli.

“They value the culture of the company aligning with their own goals and attitudes,” says 24seven’s Alver, who points to investment bank Goldman Sachs’ recent announcement of flexible working in the US. “Unthinkable a decade ago, but that is the only way they can compete with all the talent that is going to Silicon Valley: Linkdin, Twitter, Facebook — they are brilliant at it.”

At the moment, LVMH is one of the companies doing employer branding best, according to Alver. "Because of its cross pollination of talent, which gives employees a whole perspective on the company, by moving from brand to brand every three years or so. This has created real employee engagement. Most traditional companies like Ralph Lauren are struggling to compete with things like that," he says.

L’Oréal encourages managers take pictures with recent hires for social media, and asks its social media following questions like: “What inspires you today?’ “It’s about creating a relationship and conversation with the external audience. There are a lot of ways to control it, but the whole point is you need to be out there showing your culture,” explains Tattanelli, who gives as an example Kering’s recent programme inviting graduates to get to know the company. “Having something like that tells the audience: ‘We care about training you.’”

Employees breed success

"To be really successful, you don't only need consumers to be promoters of your brand. You need your employees to be promoters of your company — to generate what we call the 'promoter flowering,'" says Bain's Levato. "If you have people that work in the company that are creative and enthusiastic, then your employees will be promoters of your brand, which will start a virtuous circle. This is how in our opinion there is a very, very important link between consumer branding and employer branding," she continues.

That virtuous circle can also drive sales, by engaging target markets via employees. Kit and Ace — a Canadian apparel brand founded by former Lululemon lead designer Shannon Wilson and her stepson, J.J. Wilson, son of Lululemon's founder Chip Wilson — recruits artists and painters to work in their stores and encourages them to invite friends and social circles, which are the brand’s target market. “It is like what Lululemon did in the past with yoga,” explains Alver. “In a perfect world, your own employees could become your best ambassadors and you don’t need to do a lot of external branding,” adds Tattanelli.

The power of brand association

In possession of some of the strongest consumer brands on the planet, fashion companies understand the power of brand association. They are now applying this knowledge to their employer brands. “Companies in this sector are investing more and more in collateral marketing initiatives, related to fashion, but also related to cultural initiatives, or environmental initiatives — to enlarge the brand’s platform into other territories and to give consumers more occasions to come across the brand in those conversations,” says Levato.

Take Fendi's restoration of Rome's fountains, Kering's focus on sustainability or Tory Burch's culture of female empowerment; fashion brands regularly commission and communicate projects ancillary to their product lines — creating a more holistic perception in the media and increasing their appeal to prospective talent. "More and more you see companies trying to find a point of differentiation."

In addition to attracting and retaining key talent, in unsettled times such as these, a strong employer brand can act as a form of protection against the tumultuous stock and consumer markets, and negative stories in the media. Abercrombie & Fitch, American Apparel, Prada and any other companies facing significant hurdles in their future would benefit from strong employer brands. “Challenging times are when you need better talent to come in to turn it around. If you’re only known for what you produce, it’s going to fluctuate depending on the economy, bad news and good news. Employer brands protect you from that and give you something else to attract talent with beyond sales, ” says Tattanelli.

“You need another message: ‘If you come here we’ll develop you and you’ll have a career.’ If talent is the key in actually weathering the bad moments, you need to control it and the way to control it is by having an employee brand."

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Inside the $7 Billion Dior Phenomenon