Enter the Googleplex, headquarters of the world’s largest search engine in Mountain View, Calif., and one is transported to a utopia that appears more Willy Wonka than Wall Street. The 500,000-square-foot complex features employee lounges outfitted with pool tables and snack bars. Outside, employees can take a break at the beach volleyball courts or take a dip in one of the two swim-in-place pools. Hungry employees enjoy up to three free gourmet meals a day, and they can take advantage of subsidized haircuts and massages.
Every part of the Googleplex, from its interiors to policies that let employees bring their dogs to work, exemplifies Google’s well-established work-hard, play-hard mentality. This has become a cornerstone of the company’s employer brand, and likely helps Google perennially garner a top spot on Fortune magazine’s list of the World’s Most Admired Companies. Last year, Google finished second.
Fifteen years after it first collaborated with Fortune to put together the most admired list, the Hay Group, a global management consulting firm, commissioned the study “Lighting the Path to Success” to look at the driving factors in the continued prominence of companies such as Apple and Starbucks that regularly land at the top of the list.
“Most Admired Company respondents were considerably more likely to indicate that their companies had developed an explicit employer brand,” said Mark Royal, senior principal at Hay Group. “It’s something that Most Admired Companies are focusing on from a branding standpoint.”
Eighty-eight percent of the companies on the Fortune list developed an explicit employer brand, compared with 67 percent of their peers.
A Cultural Shift
Employer branding refers to a company’s reputation as an employer, and it isn’t new to the workplace. Simon Barrow, chairman of People in Business, the employer brand consulting subsidiary of recruitment agency TMP Worldwide LLC, first introduced the term at the Chartered Institute of Personnel and Development’s annual HR conference in 1990.
But the concept of employer branding remains important today in the war for top talent, said Kortney Kutsop, an employer brand specialist at employee branding company Universum. The company surveys some 500,000 people annually, including 65,000 college-age students, to find out what traits they find most attractive in an employer. Like Fortune, Universum comes out with its own list, the Top 100 Ideal Employers.
“We’ve really seen a shift over the last few years where students are no longer saying, ‘I’m going to work for a company because I want to go into this industry,’” Kutsop said. “They think, ‘I’m computer science and I can actually work anywhere I want,’ whether it’s a consulting company or an accounting firm or someone like McKinsey or Google.”
With a perceived wider range of options, potential employees are more easily swayed by employer brands that align closely with their ideal work environment, Kutsop said. As a result, talent leaders are becoming more involved in this branding.
“A lot of it is going to rely on marketing and communications,” Kutsop said. “But the role of HR is absolutely crucial in developing programs and measuring return on investment.”
Steve Canale, manager of global recruiting and staffing services for General Electric, understands the importance of employer branding firsthand. During its 135-year history, GE has established a strong company and employer brand that aids its recruitment process. It finished 15th on last year’s Fortune list of most admired companies and third on Universum’s Ideal Employer rankings.
“We have a strong competitive advantage on the engineering and technology manufacturing side,” Canale said. “When we mention GE on campus, we’re typically able to get people’s attention. They know who we are.”
Canale stressed the importance of developing an employer brand that is truthful and an accurate representation of an employee’s experience.
“We’re trying to portray it in reality,” he said. “That is important to us because we don’t want to paint it as something that it’s not just to attract people in the door. We’re trying to position it so we attract the best, who we feel are going to be successful in the company.”
That’s exactly where companies with top employer brands succeed, said Angela Hills, executive vice president at Pinstripe Inc., a recruitment process outsourcing company.
“Organizations that consistently stay on lists like this have a consistency between who they are and who everyone thinks they are,” Hills said. “The cool factor isn’t just the marketing hype. They have a way of aligning their employer brand — their internal employee experience of how it is to work at the organization — and their outward brand.”
Rankings such as Fortune’s Most Admired Companies and Universum’s Ideal Employer list tend to favor large, global companies. According to Royal of the Hay Group, which collaborates on the Fortune list, the primary criterion for inclusion is revenue.
“These are essentially the largest players in the different industry segments that we examine as part of the rankings,” he said.
Regional and local companies also work to build employer brands, even if they fail to be recognized at a national level. Consider, Clark Nuber, a certified public accounting and consulting firm. The midsize company based in Bellevue, Wash., won the Better Workplace Award this year from the Association of Washington Business and was named one of the 50 Best Small and Medium Workplaces by the Great Place to Work Institute and the Society for Human Resource Management for three consecutive years starting in 2007.
Tracy White, senior director of human resources at Clark Nuber, said employer branding played a large role in winning the workplace accolades. Further, people in the Pacific Northwest are starting to notice.
“Last week I was out doing errands and I had on a jacket that says Clark Nuber,” White said. “And a person came up to me and said, ‘Oh, Clark Nuber,’ and told me a story about a friend who worked at the company. It’s not uncommon, if you’re around here, for people to actually recognize our brand and know someone who works here.”
White attributes the success of Clark Nuber’s employer brand to a focus on employees and a willingness to allow workplace flexibility, something you don’t often find at a midsize CPA firm.
“If they have something in their life that has come up, they can take advantage of it,” White said. “It’s not a situation where people have to work 70 or 80 hours a week. They can participate in their children’s activities.”
Foot in the Door
For Canale at General Electric, the importance of a strong employer brand to get a talented set of potential employees in the door cannot be underestimated. But in the same breath, he said that a focus solely on employer branding oversimplifies the situation.
Human resource departments at companies such as GE emphasize early identification programs. GE brings in 3,000 rising college sophomores, juniors and seniors as interns and co-op students for 90-day summer programs.
“If we provide good assignments and treat our early identification interns well, they go back to campus and can hopefully become net promoters of GE,” Canale said. “They become brand ambassadors of GE, and that is the most important thing we can do in terms of a recruiting perspective because students believe other students more than they believe their parents or teachers or advertisements or the recruiters.”
Following graduation, GE hires roughly 1,000 students in the U.S. each year. More than 70 percent of those students have already had contact with GE through an internship or co-op.
The enrichment doesn’t stop when employees are hired. GE and Clark Nuber have leadership development programs to help ensure continued success in the workplace.
“We always say it’s the employees’ responsibility to manage their career,” White said. “But it’s the firm’s responsibility to provide them with the tools and resources to be able to manage it.”
GE has seven separate corporate leadership programs that hire students into two-year rotations, which involve six-month assignments in a new recruit’s field of concentration.
“Students are very attracted to the fact that they can come into a company that’s going to continue to invest in their development and their education,” Canale said.
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Employer Brand Keeps Southwest Flying High
During the past four decades, Southwest Airlines has branded itself as more than just a low-cost carrier. In recent years, while other airlines have reported record losses and even filed for bankruptcy, Southwest continued to post profits. Its success comes back to the airline’s workplace culture and employer brand, said Sharmon Walters, manager of Southwest’s People Department.
The company is well known for an employer brand that emphasizes fun at work, whether it’s customer service representatives dressing up in costumes for Halloween or flight attendants rapping the FAA safety regulations.
Walters breaks down Southwest’s success as a brand into three branches:
• The people: “They are empowered to make decisions that provide outrageous customer
service, even if it’s coloring outside the lines of what is normally done.”
• The brand: “People want to work for Southwest. Our candidates are our customers. They fly SWA; they see how we treat our customers.”
• The recruitment process: “Our brand goes hand in hand with recruiting. We do have a very established intern program and we have great relationships with many different colleges.”