The extended version of this article will be published in the Journal of Corporate Recruiting Leadership.
Culture is more often a source of conflict than of synergy. Cultural differences are a nuisance at best and often a disaster. —Professor Geert Hofstede, Dutch social psychologist
One of the greatest challenges facing global companies right now is their ability to exploit synergies and efficiencies in their global talent acquisition and retention programs. When considered with the fact we are about to enter an era of unparalleled talent scarcity around the world, the role of the global employer brand manager is set to become one of the most critical roles inside global companies.
Global talent acquisition has become increasingly complex. The need for systems integration, understanding of culture diversity, social and technological changes, jobless, uneven economic recoveries in many countries, the threat of declining fertility rates, inequality in global education standards, and the impact of aging populations in many developed economies has created multiple challenges for global companies which show no signs of easing soon!
Leaders I speak with around the world are saying they are running hard to stand still and where previously they could take 1-2 years to research, develop, and implement talent acquisition and retention strategies, the competitiveness for talent is demanding leaders react quicker and more decisively to stay ahead of the competition.
Even top employer-branding companies like Google, Adidas, and Deloitte are constantly seeking innovative ways to source, develop, and retain talent. If that’s what is happening with the market leaders, consider the millions of other companies around the world who have similar challenges. At a global level the problem is magnified to unthinkable proportions and the solutions are going to need a mix of short- and long-term initiatives including collaboration between companies, industries, universities, and governments. There is no benefit to global corporations if leadership talent is in high supply in Scandinavia when manufacturing operations are in India and there is a dearth of leaders with the right skills.
The Reality of Globalization and its Impact on Employer Branding
The social and culture integration brought about through globalization can foster broader understanding and co-operation between employees around the world, and potentially economies of scale in the allocation of human resources, but is it really that simple?
Following the debilitating global financial crisis (GFC) in 2008, companies based in North America and in Western Europe took the most drastic action, with 69 percent of U.S. companies and 63 percent of UK companies reducing headcount. We trusted our global financial systems would be kept under control by economists and that markets would move freely and trade would become increasingly borderless. The GFC taught us just how vulnerable we are in a globalized, connected world. What often goes unreported is the impact on the poorest countries which were hit hardest, with 90 percent exposed to the impact of the crisis. As a result, 50 million people were sent into extreme poverty and 100 million into chronic hunger.
Since the GFC, there has been an uneven recovery in labor markets, with a continued rise in joblessness in the developed economies and European Union region and a steady to slightly improving unemployment picture in most developing regions. This downward “stickiness” of unemployment — that unemployment rates tend to remain high despite a recovery in economic growth — is also reflected in the country-level data, raising concerns that many countries are experiencing a jobless recovery.
In 2011 the global employment landscape looks a little different to what we learned in textbooks at school! The ability of organizations to attract and retain talent that contributes to growth and profitability is no longer limited to drawing upon the local or national workforce. Companies now have tools at their disposal to tap into the global talent pool and what I call “pockets of talent excellence” — small clusters of highly talented individuals or small groups who are on top of global issues and trends, adaptable and agile enough to move in and out of companies on a project-by-project basis providing expertise to companies at a speed far more superior to hiring of full-time employees.
The Mobile Workforce
Mastering the management of today’s traditional worker is no simple task. As global priorities continue to shift and change, organizations are looking to make strategic financial and human capital decisions. One of the most prevalent changes is an increased use of contingent labor to fill short-term gaps and specific labor segments. This group of workers is growing at more than twice the rate of the full-time workforce, and the trend looks set to continue.
The challenge for organizations is how to strike the right balance between producing the work themselves or outsourcing parts of it to locally or overseas workers. The winners will be those organisations that move early to tap into the global pool of misplaced talent who are ready, willing, and able to do the work others in the local country may be unwilling or incapable of doing.
Citizens in poorer countries with access to the Internet are now homeschooling their children by accessing the vast amount of educational resources available on the Internet. The trend of self education is likely to accelerate as parents are no longer prepared to wait for governments to reinvent their education systems. All that is missing for these parents is an Internet connection. Wikipedia alones contains enough information in the right hands to educate the world’s poorest children with the potential to unlock “pockets of talent excellence.”
Today, foreign-born workers with university degrees or equivalent qualifications make up just 2 percent of the European labor market, compared with 4.5 percent in the United States and nearly 10 percent in Canada. Improved education and training must go hand in hand with increased labour migration. Employability will continue to be a huge problem worldwide. Because of the uneven quality of education systems, only 25 percent of Indian and 20 percent of Russian professionals are currently considered employable by multinationals.
American firms generated $1.68 trillion in profit in the last quarter of 2010 alone and have little incentive to invest it back into R&D in their home country when they could put it in countries such as Brazil, India, or China. These profits won’t stay on balance sheets for long; companies will be merged or acquired likely with the mission to keep labor costs as low as possible in order to maximize shareholder returns. With the richest 2 percent in the world owning more than half of all global assets, this figure may come as no surprise. Welcome to the new normal! There is so much corporations can do to build a pathway to corporate success than traditional ways of value creation.
There are real societal problems waiting for corporations or industries to solve, yet there seems to be a reluctance to engage in issues which seem unsolvable. This is where employer branding without borders can have a significant impact, resolving societal issues using a coordinated approach between corporations, industries, and governments. If the continents of Africa, East Asia, South Asia, and Latin America were able to each increase their share of world exports by just 1 percent, 128 million people would be lifted out of poverty, five times what it receives in aid. Or consider that nearly 1 million people are trafficked across borders, most of these for sexual exploitation with around half of them minors. Here lies an opportunity for some of the world’s leading brands to really make their employer brand distinctive.
Skills Mismatch
To “manufacture” talent for the long term, national governments, academia, and industry need to work together to better align education and workforce training with the needs of industry. Companies need to implement a robust workforce strategy that takes into account not only the skills needed to execute business strategy, but external factors that impact talent sources such as demographic shifts, technological revolutions, and the rise of emerging markets.
Demographic Changes
As many world populations age, birth rates in most mature economies are trending downward. Many Western economies cite declining birth rates as a major problem in attracting talent. Yet China, India, Eastern Europe, and parts of South America are also grappling with critical talent shortages. Russia alone faces an estimated reduction of approximately 20 million working-age people by 2030. The UN anticipates that China’s working-age population (those aged 15-59) will fall behind Vietnam’s in 2020 and lag behind India and Brazil in 2025.7 China is already facing skills shortages at the senior management and executive level, and expects workforce growth of less than 5 percent by 2015, at which time one-third of the country’s billion-plus population will be over 50 years old.
In reality, 90 percent of the world’s people will never leave the country where they were born. People get 95 percent of their news from domestic sources, and those sources focus most of their coverage on domestic news. Only 21 percent of U.S. news coverage is international, and, of that, half deals with U.S. foreign affairs. In European countries about 38 percent of news is International, but almost half relates to stories involving other countries in Europe. No wonder a better understanding of culture diversity needs to find its way into your employer brand strategy.
It’s not surprising that we are yet to see many companies achieve success as a Tier 1 global employer branding company (see the graphic). The ability to manage a global employer brand strategy is becoming more complex even though leaders are supported in their efforts by rapidly improving technology that allows them to connect with employees faster and cheaper than ever before. Global companies need to act now to put the systems in place to ensure they can tap into the rising entrepreneurial workforce that will emerge from countries where the Internet has been inaccessible until now. Mobile technology and low-cost laptops, netbooks, and tablets are flooding in these areas. This approach must be part of a coordinated approach with local leaders empowered to unlock this potential.
Social and Technological Changes
Since its birth in 1991 the World Wide Web has transformed our access to information and to each other. The focus for companies over the past 10 years has been how to sell more products using the Internet. Many commentators talked about the end of the face-to-face sale, an attitude that led to the technology bubble that crashed in 2000, sending many investors and companies into bankruptcy when all they had invested in was a domain name and grand idea! The Internet has now penetrated more than 30 percent of the world’s population and is set to continue to accelerate its growth as more citizens in India and China connect to the web using low-cost mobile and PC technology.
What was missing in the early stages of employer brand strategy by early adopters of the concept and still is today in many countries is an understanding and acceptance of culture diversity. Whilst many commentators talk about “one world” or “statelessness” where global corporations can exploit low costs of labor in emerging economies while selling to the masses in their home country, the reality of a global employer brand strategy is still many years away for many global companies.
The Rise of the Global Employer Brand Manager
The number of employer branding positions has been on the rise. There has been more than a 250 percent growth in job vacancies since 2006. This will continue to increase in line with economic growth (albeit at different rates) across the world as employer branding is still closely viewed by many companies as aligned with recruitment practices, though this is changing.
Less than 20 percent of firms around the world have a clear employer brand strategy, and as expected developed markets are leading the way with U.S./Canada rates the highest (19.7 percent), followed by Asia (19.4 percent), Europe/UK (18.4%), Australia (15%), Turkey (12.3%), and Russia (7.6%). Clearly there is still alot of work to do!
With the rise in employer brand dedicated functions appearing in organizational charts, over the coming years there are three key focus areas organisations should focus on to build capabilities of leaders who will be responsible for the global employer brand strategy.
Cultivating the Global Employer Brand Leader
My own perspective on developing the capability of the global employer brand leader is greatly influenced by the places, people, and learnings from my two global tours which has allowed me to experience the cultures of employees from more than 38 cities in 24 countries since 2007. In many ways we are all very similar (the global citizen!) yet in many ways we are very different (our cultures help shape our values and beliefs which have prepared us to survive in our local regions).
This all supports the need for employer brand leaders with 1) a good understanding of global issues and culture diversity, 2) an ability to localize the global employer brand strategy, and 3) manage the employer brand for the long term.
Understanding Global Issues and Culture Diversity
Leaders need to understand how the world really works (not just from what the media feeds them!) and the impact on employment. Source information on current issues and trends relevant to employer branding which has already been aggregated by thought leaders, experts, and reputable journalists.
Encourage leaders to develop a network of employer brand managers, thoughts leaders, and academics from around the world and follow them on the most popular social media networks including Facebook, LinkedIn, and Twitter. You’re likely to gain insights into their thinking well in advance of it appearing in articles like this!
Send managers on international assignments to connect the theory to reality. The Internet can only provide a one-dimensional view of the world. It’s important to experience local culture on the ground. Spending time with managers in their home country will also foster a culture of trust, engagement, and support of global employer branding initiatives.
Conduct training in culture diversity for managers to enhance knowledge, understanding, and empathy in differences in culture and how they impact the employer brand.
Localize the Employer Brand Strategy
Establish a framework for your global employer brand strategy and ensure internal and external stakeholders are on the same page.
In my new book Employer Brand Leadership — A Global Perspective I detail the “Employer Brand Excellence Framework” which defines the employment experience from a stakeholder perspective (see the graphic). The Framework considers the role of stakeholders including employees, prospective candidates, customers, investors, and society in employer branding.
Adapting the global employer brand strategy to local environments should begin with a focus on the employee experience. Not all employees are the same and while companies like to use a “one-size-fits-all” engagement strategy, the reality is that most employees want to have their own needs met before they consider those of their team members or the organization as a whole. The employer brand strategy has to be build from the ground up.
Manage the Employer Brand for the Long Term
If there is one variable that causes more employer brand strategies to fail or to not even get started, it is the lack of relevant measures to determine the return on investment of the employer brand strategy over the long term. Most metrics used are short-term measures such as recruitment advertising costs or job-board spend. Metrics need to be more strategic and should include measures such as quality of hire, retention rate, and employee engagement which will provide deeper insights into the level of value creation from your employer brand strategy.
At the onset of your employer brand strategy, metrics based on desired outcomes should be established. There is no one-size-fits-all measurement tool for your employer brand program. The key is developing a set of metrics that is based on your own unique challenges and business objectives. Senior managers should develop a dashboard of metrics that is relevant to their organization’s strategy rather than implementing a “me-too” ROI measurement tool.
The key differentiator of companies that successfully adopt the employer brand concept in the future will be those that appoint dedicated employer brand resources and staffing, develop a clear strategy to work toward, achieving a Tier 1 status, and whose outcomes consider the objectives of candidates, employees, customers, investors, and society.
Some Final Thoughts
While most global brands have evolved to at least a Tier 3 employer brand status, there is so much more potential for these corporations to continuing making profits while contributing to sustainable impacts on communities or contributing to solving some of the global issues which have the potential to change the world as we know it today. This includes issues such as climate change, poverty, child slavery, people-trafficking, and environmental damage. A successful global employer brand strategy which drives value creation will require a collaborative approach between business, industry, and governments and an ability to connect a company’s employees across borders through effective management of cultural diversity.
The appointment of a global employer brand manager may just be the answer to get things moving!
References
- International Labor Office, Global Employment Trends 2011
- An Oracle White Paper, April 2010, “Successfully Executing and Managing a Contingent Workforce Strategy”
- “MEPs Support the European Blue Card Proposal for Highly Skilled Immigrants, November 20, 2008,
- World Economic Forum Global in collaboration with The Boston Consulting Group, Talent Risk – Seven Responses
- Hewlett, S., and Rashid, R., “The Battle for Female Talent in Emerging Markets,” Harvard Business Review (May 2010)
- Time magazine, June 20, 2011
- The Journal of International Security Affairs, Fall 2009
- PWC, Talent Mobility 2020 – The Next Generation of International Assignments
- Business Economics, October 2005
- Shanghai Academy of Social Sciences, Adecco Institute, and University of Warwick