With the growing importance of risk management capital, HR has a vital role
to play in protecting the profile of its firm as an employer of choice
This is the first year listed companies have to report risk in accordance
with the Turnbull recommendations that became part of the Stock Exchange’s
combined code in 1999.
Few have noticed this piece of corporate red tape and yet it could lead to a
change in HR managers’ responsibilities. Plcs that rely on their relative
market position to drive sales and attract recruits and investors now have to
evaluate and consider their brand, its value and the risks to it.
Private companies, charities and government organisations must take notice
of the risks to their brand, especially as they often do not have the same
resources as their public counterparts to invest in brand development.
HR will have to take on a more defined brand manager’s role: developing and
promoting a brand leader’s position as an employer of choice. Risk to the brand
as an employer is rapidly becoming the big management challenge of the decade.
This is especially so as businesses are increasingly reliant on the people
they employ and the brand image they build as the primary ways of increasing
the value of their business. Reputation, perception and employee motivation are
cited as some of the most significant risks in a survey linked to Turnbull.
The need for HR managers to perform as brand champions for employers has led
to increased demand for perception audits that can help organisations
understand their people’s motivation and levels of satisfaction. These audits
support a strategic and long-term approach to the recruitment and retention
issues surrounding the high talent that organisations need to impress.
Many HR managers and directors are, for the first time, talking with their
PR and marketing personnel about branding as an employer. This is leading to a
refocus of recruitment methods, advertising and web strategies, with human
capital at their heart.
There will be challenges ahead, especially for companies confident of their
market strength. It no longer follows that the brand leader for products or
services is an employer of choice in a sector. If complacency sets in and brand
leaders assume they will have the pick of the best candidates, they may miss
the very people they need to help maintain their market-leading position.
A medium-size company, or one struggling at the bottom of a particular
market, can build a strong brand as an employer and attract better people to
allow it to punch above its weight.
The top brands have the most to lose. The impact of a brand leader not
having the best staff can be devastating. In a world where perception is
reality, a brand leader modestly under-delivering is likely to attract far more
attention than a brand wannabe vastly over-performing.
When Plcs report risk to their business in accordance with the Turnbull
recommendations, or when such reporting becomes normal – as inevitably best
practice dictates – those that have made a start in brand building will be
ahead of the game.
Turnbull means that HR needs to understand the risks inherent in recruitment
and retention and their potential impact on brand. But it is also an
opportunity – it could give HR a bigger role to play at board level, where
championing the brand as an employer of choice is set to become a key function.
By Sherilyn Shackell, managing
director of Highfield Human Solutions