Case studies: Shell, Barclays, IBM
In summary
A generous benefits scheme can help to reshape public perception of an organisation and entice new recruits. Some firms with a staid, or even murky, reputation, have successfully used benefits to reinvent themselves. Benchmarking against competitors and building benefits into the brand are a good way of going about this. Case studies: IBM, Barclays, Shell.
Article in full
Remember the Ratner gaff, the Hoover travel giveaway or Coca-Cola’s Dasani tap water incident? These events caused trouble for established well known brands, so it is hardly surprising that reputation has topped the list of concerns for businesses for the past three years, according to the Association of Insurance and Risk Managers’ annual survey. So, what happens when disaster strikes and your organisation gets caught up in a child labour scandal or a public health scare? You could be forgiven for assuming that the job of repairing your reputation lies in the hands of the communications, rather than the HR, department.
But, to successfully come out of the other side of a crisis unscathed, it’s all hands on deck, says Ralf Ardill, marketing and strategic planning director at branding consultancy Imagination. “Often rebranding can be misconstrued as an exercise in communication. A lot of rebranding programmes fail because they focus often too much on packaging and not enough on people. So your stationary looks different and your advertising’s fantastic, but, it’s no good if people are still coming to work under Draconian working practices.” Rebranding is often the subject of derision. Recall the Post Office, which rebranded as Consignia only to dump its fancy new name two years later - proof that you need more than a new name and logo to tart up a tired and sullied brand. In the age of spin, people are wary of organisations projecting an image with no substance to back it up. But reviewing benefits is a chance to bring in real change at the heart of the company.
First, let’s look at why reputation is so crucial. Paul Goldsmith, associate director of Cass Business School’s Reputation Institute, says: “People’s perception of the company influences whether people want to take a stake in it, which applies to investing or working. There’s a negative side as well, which is that rather than investing in a company, people will sell their shares or advise people not to work there.” Indeed, PR cock-ups are becoming increasingly costly. According to Co-operative Bank’s Ethical Purchasing Index, consumer boycotts cost big brands £3.2bn in 2004. Co-op said that boycotts of certain US brands, particularly those associated with poor environmental performance or labour practices, accounted for the bulk of this figure. Looking at your reputation only when your credibility is called into question is too late, argues Goldsmith. “Reputation is the love in the bank; it’s like a cushion. If you don’t have love in the bank then, if you have a crisis, it becomes a real crisis. But if you have a lot of love in the bank then firstly, it’s more difficult to get a crisis, and secondly, you’ll recover quicker because you’ll bounce back.”
Certain employee benefits help to build up a store of positive-reputation capital to protect employers long term. Paul Sanchez, communication practice leader at Mercer HR Consulting UK, says: “Some of the companies which have been in the Fortune 100 most admired companies list have consistently had forward-looking, enlightened benefits such as daycare and flexible working. All of these create a positive impression. “But when companies take a restrictive view of benefits - I mean almost stingy - it tends to create the image that, if they are mean spirited to their employees, they will be mean spirited to their customers.” Certain employers have successfully built benefits into their brand. Mark Winter, director of branding consultants Interbrand Inside, says: “One place that’s well known for having a good package on offer is the civil service. It is widely believed, whether this perception is reality or not, to have a fairly flexible approach to working, a fantastic pension, plus good holidays, maternity pay and part-time working.”
He gives the example of Asda, which has used its staff in its external marketing. “In terms of its external message to customers, Asda makes a very deliberate point in its ad campaign of saying ‘we’d like to thank all of our people who have played a part in keeping prices low’. You always see lots of staff in their adverts. “Perhaps there’s an implicit message there; the fact that they are thanking their people must mean they look after their people and give them good benefits.” Nevertheless, he remains sceptical about whether perks can redeem a brand that’s become tainted. “I think that’s quite a long shot. I don’t think [benefits] would have a huge impact. I’m not sure that when people apply for jobs and look at future employers how high up the agenda they will put comp and bens.” Volunteer schemes for employees are a classic way of improving a firm’s credibility. Although few companies say they do it for this reason alone, they admit that it’s a happy side effect.
Fiona Rawes is director of Heart of the City, an organisation that matches city firms with community projects. “Something like a volunteering programme goes right to the core of business because it’s involving staff - an organisation’s lifeblood. In terms of corporate reputation, there is no doubt that having a volunteering programme has immense benefits to a range of key target audiences. A well-managed, well-communicated programme sends out a very clear message to investors that this is one of the ways that a company is looking at its social responsibility.” However, Cass Business School’s Goldsmith warns employers to tread carefully. “If a managing director gives employees 40 hours off a year to do community work that probably gives him some pride in terms of the reputation of the company. “The only problem with that is that if the firm missed its quarterly earnings forecast the City would question ‘why don’t staff work five days more a year [to help make up the deficit]?’ If you don’t own the company you don’t have a choice - you’ve got to think about the short-term earnings which is what the City [looks to].” Nevertheless, volunteer schemes remain an attractive hook for new employees. Today’s students are becoming more selective: the Graduate ethics survey by software firm Axiom found that 75% of graduates would not work for a firm with a poor ethical record.
Interbrand’s Winter says: “Certainly since 9/11 there has been a turnaround in [the way staff] think about their life - what they are doing and [whether they] are working for people that are doing any good.” Graduates are becoming more ethically aware, says Nick Wright, global head of community affairs at financial services firm UBS. “The corporate responsibility and social affairs section of our website is the most visited among graduates who are looking at joining the company. There is a generational change that has been going on for a number of years now. These are questions that people care about very deeply.”
UBS staff can join in a range of community projects, from sharing their business expertise with charities to painting community centres. But, Wright warns that paying lip service to corporate social responsibility with a trophy scheme can backfire: “To be perfectly frank, if people thought the only reason we had a corporate responsibility or community affairs programme was for PR purposes they would be sceptical. You have got to be serious about it and manage it in a professional fashion. But if that’s the case then I think it does make a difference at the margins as to how people feel about the organisation [both] joining it and staying with it.”
Case study: IBM
In 2001, Edwin Black accused IBM of dealing directly with the Nazis in his book IBM and the Holocaust. PR disasters don’t come much worse than this. According to Black’s book, the computer firm supplied the Nazis with technology that helped them to administer Jewish affairs, claiming that punch card machines were even used to organise information on concentration camp inmates. While some legal proceedings have fizzled away, allegations like this can still be very damaging and need deft handling. But according to the company, a firm needs to put love in the bank long before bad publicity strikes. Mark Wakefield, corporate community relations manager, says: “If you have a positive reputation already then it’s easier to defend it.” IBM staff are involved in a number of community projects, including an employee mentoring programme, in which over 1,000 staff have taken part. Other workers advise charities or are governors of local schools. “There is some evidence that when companies with positive track records have experienced a threat to their credibility their reputation will drop very dramatically for a short period of time, but if they manage it well then they will bounce back very quickly. “It’s clearly very good for us in terms of branding of professional services. There are other technology companies which deliver and offer a similar range of products and services, so customers have to ask themselves what is it aside from the immediate proposition that helps to distinguish us from other companies,” explains Wakefield. Graduate interest in CSR is also an increasing pressure. “There’s a trend for younger recruits to be not just interested in profit margins, but to feel they are joining a company with a good reputation.”
Case study: Barclays
Barclays relies on its relationship with local communities, so its volunteer schemes are firmly rooted in the towns where it works. The bank runs several volunteer schemes for staff and all workers are entitled to two days off each year to do community work. Projects range from garden makeovers to mentoring and CV writing. Debbie Phillips, community affairs manager, says: “It helps customers and potential customers to see the stuff that we are doing on a regular basis. If they see Barclays staff in their local community doing something to make a difference, it actually makes customers feel better about us as an organisation and potentially might make them think about using our products and services in the future.” She adds that ethical shoppers are starting to pack a punch. “People are also becoming more savvy about what [firms] are doing in the areas where they are operating. It’s important to demonstrate that you are putting something back.” The schemes also make the firm more attractive to new recruits. “More and more graduates are asking us what our corporate social responsibility policies are about,” says Phillips.
Case study: Shell
Shell has seen its fair share of reputation challenges, so the company works hard on its image. Flexible working and community work form a key part of Shell’s brand. Alison Broomfield, employment policy adviser, says: “We have lots of examples of flexible working patterns such as part-time, job sharing and working from home.” Other work-life benefits include career breaks and community schemes. The oil firm is also working in partnership with the Equal Opportunities Commission to research flexible working take-up rates. But, Shell’s flexible working policies are not a PR stunt. Bernadette Cunnane, Shell’s media relations officer, says: “What we do, we do because it’s the right thing to do. It’s more that we are doing it because we want to be seen to be a good corporate neighbour and benefiting the community in which we work. People find that attractive.” Any boost to reputation is incidental to Shell’s goal of being a family-friendly and equal opportunities employer. “We have a lot of principles, regardless of how it might appear to stakeholders in the ways that we do business, it is [merely] a byproduct [if it is] also attractive to stakeholders,” says Cunnane.