RUSSIA Employer Branding’s Emerging Market

Brett Minchington
MBA Chairman/CEO Employer Brand International

Emelenko Elena
Head of the Employer Branding Consulting Centre, HeadHunter

Russia has a market economy with enormous natural resources, particularly oil and natural gas. It has the 10th largest economy in the world by nominal GDP and the 6th largest by purchasing power parity (PPP). It is also one of the BRIC economies, an acronym for the economies of Brazil, Russia, India and China combined. In 2003 the term was first prominently used in a Goldman Sachs report which speculated that by 2050 these four economies would be wealthier than most of the current major economic powers.

The key to unlocking the enormous economic potential of this vast country will be to develop the human resource capabilities of companies based in Russia, a trend which is well on the way of positioning Russia as a country where the art and science of employer branding may well lead the rest of the world within the next five years. Russian companies are in a prime position to be able to learn from the mistakes and successes of Western companies before them. There is enormous interest in employer branding in Russia supported by the attendance of more than 250 managers at masterclass events I conducted in February and May 2011 and our first International Employer Branding Summit in September (400+delegates)  in collaboration with HeadHunter, the country’s leading online job board.

I (Brett) travelled to Russia on three occasions in 2011 and my first impressions when I arrived were very different to what I was expecting. My previous exposure to Russia had been from what I had read in the media and childhood memories of the reporting of the Cold War between communist countries led by Russia and America and its western allies. I really did not know what to expect but my level of anxiety was elevated when less than a month before I was due to fly into Moscow 35 people were killed and more than 100 injured in a suicide bomb attack at Moscow’s Domodedovo airport in January 2011.

I’ve travelled to India shortly after the terrorist attacks in Mumbai in late 2010 and was reassured by the heightened security presence at the airports there and sort comfort that I could expect similar upon my arrival in Moscow.

Other than the minus 30C (-22F) temperatures on my arrival into Moscow in early February 2011 I was instantly attracted to the city, its architecture, its culture and the hospitality of its people.

Moscow has a certain energy or ‘roar’ about it – and St Petersburg has to be one of the world’s most beautiful cities- a cross between Paris and Amsterdam!

If I had been looking to relocate for work as many millions of people do around the world each year and will increasingly so due to skill shortages in many regions, Russia, unfortunately would have been well down on my list. Now that I have had the opportunity to learn more about the country, its customs and the way business is done I find it very similar to many other countries I have worked in.

During our ‘Employer Branding Global Research Study’ in late 2011 we wanted to learn more about the status of employer branding in Russia and Ukraine, two key markets which are predicted by many economist where economy growth will stem from to stimulate the world’s economy over the next 5-10 years. Due to lower labor and production costs, many companies also see Russia as a source of foreign expansion opportunity, especially if they can navigate their way of doing business there.

Through the support of our Russian partners, HeadHunter, we were able to receive a large number of responses from the region to assist us to better understand the science and practice of employer branding in Russia and importantly how this compares to more developed markets in employer branding in Asia, Europe/UK and USA/Canada.

The global study found that in Russian companies a higher percentage (60%) of employees have been at their company less than two years compared to those in Asia, Europe/UK and USA/Canada (see table 1).

When investigating the department(s) responsible for managing the employer brand strategy some very interesting results emerge. CEO’s and the Executive Team are more involved (16% and 24% respectively) in the employer brand strategy in Russia than in any other region (see table 2). The human resources department, a dominant driver of employer branding in many countries is low (20%) in Russia compared to other regions. In Europe/UK the number of human resource teams responsible for the employer brand strategy is more than double than in Russia.

Russian leaders are more likely to have to justify their investment (25%) in employer branding than leaders in Asia, Europe/UK and USA/Canada. (see table 3).  Plans to increase investment in employer branding activities in 2011/2012 in Russian companies is similar to other regions with 30% of companies planning to increase their investments.

Employer brand strategy is less developed in Russian companies compared to other regions. Only 8% of Russian companies have a clearly defined strategy and 26% do not have a strategy (see table 4). What is promising is that 41% of Russian companies are currently working on developing their employer brand strategy so we should expect to see a significant increase in companies having a clear strategy in the next 1-3 years.

In 2011 our Russian employer brand consulting partners, HeadHunter had a significant rise in interest in employer branding services in areas such as employer brand auditing, employer brand strategy, EVP development, employer brand research and communications planning. This level of demand is expected to increase in 2012 as more companies become aware of the benefits of employer branding in driving productivity gains through more effective talent acquisition, engagement and retention programs.

Russian companies are lagging western countries in key people development areas which have a positive impact on the employer brand. These include recruitment branding (21%), employee referral programs (25%), use of applicant tracking systems in recruitment (19%), leadership development programs (16%), alumni programs (7%) and retention initiatives (6%). It could be expected that as Russian leaders become more aware of how to develop, implement and measure these initiatives more companies are likely to participate in these activities to enhance their employer brand (see table 5).

The use of social media to support employer branding (43%) activities in Russian companies is well below that of USA/Canada and Europe/UK. However with the increase in internet penetration (currently 43% of the population) in Russia and increasingly popularity of social networking sites such as Vkontakte (160 million users), Facebook (5.2 million users) and LinkedIn (commenced in Russia in 2011) we are likely to see alot of activity in this area in 2012 as companies seek to build their online employer brand presence across these networks as companies have done in other countries.

It is pleasing to note that more Russian companies use coaching/mentoring (37%) and induction programs (52%) to enhance their employer brand than other regions. Russian companies are also more likely to track competitor activities (37%) to ensure their own activities are ahead of their competitors.

However Russian leaders have very little patience with focus groups with only 7% of companies using them to support employer branding efforts.

The global study found people management practices and policies (87%), career development (90%) and reward and recognition (87%) were more important employer brand attributes in attracting new talent to Russian companies than companies in Asia, Europe/UK and USA/Canada (see table 6).
Performance management (69%), employee research (58%) and communication systems (66%) were least likely to attract new talent to Russian companies compared to companies in Asia, Europe/UK and USA/Canada.

Russian leaders have fewer problems with obtaining an adequate budget (49%) for their employer branding program than companies in Asia, Europe/UK and USA/Canada (see table 7).

Russian leaders also appear to encounter less challenges in co-oordinating employer brand messages across different departments (57%) and communicating key employer brand messages to customers (55%) when compared to companies in other regions.

The research shows the challenges in engaging the CEO and senior leadership team, important tasks in driving employer branding excellence is consistently high across all regions

Advocacy is important for Russian employees with 64% of employees stating ‘It is important that other people want to work for their employer – see table 8. However it is not as important in Russian companies that employee’s friends know the company they work for (18%) compared to the other regions.

Russian leaders are more likely to use retention rate (47%) and profit per employee (26%) when measuring the return on investment of their employer brand strategy compared to leaders in Asia, Europe/UK and USA/Canada who are more likely to use cost per hire, employee engagement and sourcing effectiveness as measures of ROI. (see table 9).
Russian companies are also less likely to use a ranking in best places to work or similar award to measure the ROI of their strategy. This was most common in Asian companies (26%).

Surprisingly a high number of Russian companies use alumni events to communicate their employer brand (32%) compared to companies in Asia, Europe/UK and USA/Canada (see table 10). They use the career website to communicate their employer brand at a similar level to other regions. However they use company events at a much higher level than companies from other regions (39%).

Employee video testimonials are not as popular in Russian (10%) companies as they are in other regions such as USA/Canada (41%). The use of company brochures (25%) to communicate the employer brand is also less popular in Russia as are on campus activities (5%).

The use of job boards to communicate the employer brand (56%) is much higher in Russian companies than in other regions as is the use of newspaper job ads (36%) which is more than four times the amount compared to USA/Canada.

The main benefit gained from the employer branding program in Russian companies is decrease in staff turnover (29%), decreased time to fill roles (29%), increase in number of unsolicited resumes (21%) and increased customer engagement (16%). These benefits are higher in Russia than in all other regions (see table 11).

Compared to companies in Asia, Europe/UK and USA/Canada, the lowly ranked benefits compared to other regions include recognition as an employer of choice (8%) and setting a standard and framework for all HR activity (3%).

All regions experienced the benefit of reduced recruitment costs from their employer branding program at similar levels.

And some final thoughts

The research points to many areas where Russia companies are leading Western companies in their approach to employer branding. However the level of awareness and uptake in employer brand strategy in Russia is still well below that in advanced economies such as USA/Canada and Europe/UK.  Importantly, there are promising signs and certainly a high level of interest and engagement amongst human resource and marketing professionals in Russia to suggest that in the near future the strength of a company’s employer brand may well be the difference to whether Russian companies are able to optimise their human resources, increase customer engagement and become an organisation people want to work for and one which employees are proud to call their own.

Employer Brand International’s next global study of employer branding will be launched in Russia in collaboration with HeadHunter in the first half of 2012 and we look forward to gaining and sharing further insights with local leaders.
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