May 11, 2021 • 4 min read
A Tale of Two ‘Scandals’ and What They Can Teach Us about Employer Branding
In the last few months, as we’ve been trying to crawl our way out from under COVID’s thumb, two very different but very telling stories have been brought to light that clearly demonstrate what an employer brand is and what it isn’t.
But before we get to these stories, we should first dispel a few myths around employer brand.
Myth #1: Employer branding can be divided into ‘good’ and ‘bad’
There is no simple spectrum of ‘good vs bad’ that we can use to measure or evaluate employer brand. Maybe that sounds obvious to you, but we’re all pitched projects in which we call our company ‘an amazing place to work’, or some variation thereof. When you think about it, these claims are quite meaningless (and in some ways ludicrous), as they are grounded in the assumption that all of us want the same things from our jobs and employer.
Myth #2: Strong employer brands are built on ‘good’ or ‘positive’ foundations
There is no simple spectrum of ‘good vs bad’ that we can use to measure or evaluate employer brand.
While it may feel counterintuitive, strong brands aren’t actually built on foundations of ‘good’ or ‘positive’ elements. They are instead built on motivational drivers. What does a great candidate want that the company can offer?
Would workers at Doctors Without Borders appreciate innovative tech? Sure, but that’s not what drove them to the job – they’re there to save lives. Would hedge fund managers like it if their investments had a positive impact on the world? No doubt, but at the end of the day, they’re in it for the money. Good employer branding understands the motivations of the audience and plays to them in the hope that they fall in love with the opportunity.
Myth #3: It’s all about the money
Survey after survey shows that compensation is the top driver of talent. Every recruiter will tell you that the first question out of a prospect’s mouth is inevitably “what’s the total comp?” Given these facts, you might assume that money is the only thing that matters. But that’s not true.
Nine out of 10 people would take a 23% pay cut if they could do more meaningful work. People join non-profits and become teachers all the time, despite the guarantee of a lower salary than they could otherwise earn. Is more money better than less? Sure, but most people simply want ‘enough’ (or what’s fair), before maximizing and optimizing around other motivations.
So with these three myths in mind, let’s look at the two stories alluded to at the top.
Good employer branding understands the motivations of the audience and plays to them in the hope that they fall in love with the opportunity.
Scandal #1: The 95-hour Goldman Sachs work week
You might’ve seen it in late March: the news story about how junior analysts at global financial behemoth Goldman Sachs sometimes work 90 and 100-hour weeks, skipping showers, sleeping in offices, and entirely forgoing personal lives. The second this story dropped, I knew that I’d immediately hear “this is really bad for their employer brand.” And I knew that the people who said this would be wrong.
We now understand that employer brands aren’t measured on a scale of good and bad; they are simply there to feed motivations. In order to evaluate the scope of the 95-hour work week issue, or whether it’s an issue at all, we need to understand what drives young professionals to Goldman Sachs.
It takes less than a minute on their careers site to get an impression of the Goldman Sachs employer brand. No one joins the company for the work-life balance. No one joins because they’re saving the planet. There are just two (quite intertwined) reasons to join Goldman Sachs: impress strangers and make stacks of cash. Spit and shine it all you want – that’s what GS offers employees.
Still-eager prospects know that. They know that the cost of being a millionaire by age 30, and retiring well before they hit 40, will be gruelling hours and a lack of sleep. These people made a transactional decision: sacrifice their 20s, and never fly coach again.
This story doesn’t reveal a hidden secret nor a black mark on the Goldman Sachs brand. It simply reveals buyer’s remorse. If anything, the ‘scandal’ validates the brand: we aren’t kidding when we said we’d work you hard, but look at how nice your watch is!
Scandal #2: The flexible morals of McKinsey
Considered the consultancy, boasting famous names with equally famous salaries, McKinsey’s brand is built around being the smartest people in the room, no matter the room. They have spent the last 50 years steering global corporate strategy and culture, and in that time have developed into the most prestigious consulting firm in the world; one that helped invent NASA! While there have been scandalous blips on the radar, they’ve largely been viewed as smart people coming up with smart solutions. Until now.
In the last three years, it appears McKinsey has helped Saudi Arabia ‘clamp down’ on dissidents and reporting (a pleasant euphemism for what really went down), helped ICE (US immigration) justify giving less food and medicine to jailed migrant families, and this year settled a lawsuit for $600 million for helping Purdue Pharma increase OxyContin sales, in essence trading drug deaths for profit.
Now this is a scandal, or more accurately, a succession thereof. Relative to the Goldman Sachs story, these events have real and toxic implications for McKinsey, and maybe not for the reasons you’d think.
It isn’t because these scandals are ethically worse. It is because they violate the existing perceptions of the McKinsey brand. Many professionals choose to work at McKinsey because the company promotes massive investment in social good and pro bono work. It isn’t here to be evil; it’s here to solve big thorny problems. A new employee might now worry that while getting a job here will prove their intelligence, they might get assigned to an evil client, which will likely cause them to re-think their choices.
Employer brand is relative
Two scandals; two results. Both show a company behaving poorly, but only one will negatively impact employer brand.
Next time you see a company – hopefully not yours – getting pulled in front of cameras to explain their boorish behavior, don’t assume that the bad news will sink the brand. Look at the pre-scandal perception of the company, then look at the scandal itself, and ask yourself: does this ‘scandal’ make a little bit of sense? And if so, will it really alter the thinking of the sort of person that would like to join?
About the author: James is an Employer Branding connoisseur, with a wealth of experience across a number of industries. He is an employer brand and talent strategy thinker, keynote speaker, consultant, and podcaster with a passion for “how we do it”.