Selling your business? How marketing builds value. Part 2: Employer brand
“Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.”
Anyone who’s ever caught a Virgin train might baulk at the suggestion, but there’s a lot of truth in Branson’s statement. Employees’ determine the success of a business day to day. They also contribute hugely to the value of a business when it comes to selling it.
Although the typical business value calculation only looks at revenue and profit, buyers want to see a company with a viable, dynamic culture that has great potential. Having a strong employer brand will help attract and retain the right talent, and attract buyers and help seal the deal. Building a employer brand takes great marketing, both internal and external.
What is an employer brand and why is it important?
An employer brand is the external appearance of an organisation from an employment perspective. It comprises how the business portrays itself, what it says on its website, what people are saying about the company online, and its recruitment activities, including how it markets vacancies.
Employer branding is especially important for small and mid-sized businesses, where most employees have met, worked with and have a personal relationship with the owner - but it has an impact across all levels of all types of organisation. “The business owner or leadership team set the tone for the organisation,” Stuart tells us. “Everyone else will be led by what the people at the top do. If they live the values, and stay visible to employees and prospects by getting involved in operations, that has a huge beneficial impact on the company culture. If they don’t, there’s no authenticity to the brand’s claims, and business buyers aren’t interested in fakes.”
Stuart advised us to look at Chris Morling from money.co.uk, who sold the business recently. As the embodiment of his organisation’s values, he puts money to work with extensive support for skills charities and heritage regeneration, showing that his values extend beyond revenue and bottom line “Chris has been voted Entrepreneur of the Year and he’s put £3 million into a stunning head office, that was a former castle, that puts people in the right roles and the right workspaces to do their best.” Small wonder that his £25m turnover company sold for £140m earlier this year.
While this can be seen as strong leadership, and it is, the important thing is defining and communicating these brand values to employees and customers, promoting them in the right way with strong PR and social media activity, and getting staff internally involved and onboard. These key elements fall squarely at the feet of the marketing department.
How do you build a strong employer brand?
Stuart’s answer to this one was twofold: “It’s about your marketing collateral, and it’s about taking care of your people. In terms of marketing collateral, you have to look at what’s there already. What does your website, in particular, say about you as a company?”
As well as marketing products, you need to market the business. Consider a career page to showcase your team; real people telling real stories about what it’s like to work for you. Videos showcasing your company culture can show your people as they are - not directly claiming your business is great to work for, but highlighting the kind of personalities that work well there. Offer personal development opportunities - show that your people can learn and grow their remit and responsibilities. CPD shows that your employees are investing in themselves, and that you’re investing in them.
“An engineering firm People Puzzles and The Marketing Centre both work with – are nailing this,” Stuart says. “As well as advertising vacancies on their website, they’ve created a series of videos showing what their 70 or so employees think of working for the business and they trust people to come in and say “I want to work there”. They’ve made episodes on the first month and induction so far, and the series has been a hit with new recruits. It’s bringing people in, keeping them on board, and making the company look like a great place to work.”
When you’re trying to sell a business, marketing collateral means something different to when you’re selling a product or service. Your brand’s value is reflected less by what you sell and more by who sells it - by your existing employees, who show that the business is working well day to day.
How do marketing and HR work together to attract and retain talent?
“If you want people to sign up to what you stand for,” says Stuart, “you need everyone involved. Employees need to believe it.”
To attract talent, you need a brand that looks attractive. While the whole organisation should be involved in building the employer brand, it’s marketing that builds presence in the public eye and attracts people for HR to recruit.
Stuart recommends a workshop with marketing and HR teams to create the company values, and all the collateral you’d use for an external, customer-facing event, but without the business owner in the room. The process involves warming up employees exactly as you would a customer - getting them out of the “it’s just another job” mindset and converting them into brand advocates.
The other aspect, of course, is retaining talent. “The number one reason people leave a job? They don’t get on with their manager, and they don’t get on with the boss. HR need to build a good working relationship where you can, in theory, walk into the boss’ office just as easily as they could walk into yours.”
What impact does employer brand have on the sale value of a business?
“Employer brand has a huge indirect impact on sale value,” according to Stuart. “The business is valued on its turnover or profit, but the actual decision is sealed by its operations and potential. If a business is on its knees and shedding talent because it’s poorly led, then we’re clearly up against it from a retention perspective and we would change our strategy accordingly. If great employees have stayed with it because of its employer brand, that’s a huge tick.”
“Business is a much more value-based community now,” says Stuart, “and brand values are an important part of the buying decision. It’s not the infrastructure or inventory that people want to spend money on - they could just buy that for themselves. What they’re after is what your brand stands for, the talent it attracts and your equity in the marketplace.”
“A lot of SMEs skip this element when they’re scaling up: they focus on product and profits as well as knowing what they stand for and why they’re in business in the first place. Once they know that, they see a huge change in the organisation as a whole: ambition makes sure that operational efficiency is going somewhere.”
A strong employer brand will lead to more talent in the organisation and a more ambitious, driven culture. Therefore, your business will be more attractive to potential buyers and ultimately more valuable. HR and Marketing need to work closely together to establish those brand values, ensuring they’re embodied in the company and communicated to the outside world.
You can take stock of your employer brand with a Marketing 360 healthcheck - take it here today.
Image (CC) Link Humans (Flickr)