The Good, The BRAND and the Ugly- The Economy vs the Employer Brand

The Employer Brand vs The Economy.

In a report from Universum in May 2008, for the second consecutive year, MBA students chose Google as the No. 1 Employer (23.65 percent of respondents), after it trumped powerhouse consulting firm McKinsey & Company and received the highest percentage of respondents choosing it as the Ideal Employer.

“Smart MBAs know where they want to be in 5-10 years,” says Claudia
Tattanelli, CEO of Universum USA. “They look to strong companies like Google,
McKinsey and Goldman Sachs to give them the experience and references needed
to lay the path for their future career success, even with threats of a
recession. At the same time, as true Millennials, they chose organizations
that will offer a flexible and fun work environment, innovation and a good
work/life balance.”

But that was before the world changed.

Now, according to last week’s Wall Street Journal, Google is gearing down for tough times as their stock trades at less than half its one-time high a bit more than a year ago

For much of its 10-year history, Google spent money at a pace that was the marvel of Silicon Valley. It hired by the thousands and dished out generous perks, including three free meals a day, free doctors, ski trips and laundry facilities, and subsidized personal trainers. It let engineers spend 20% of their time pursuing pet projects. The company’s goal was to develop new products that would reduce its nearly total reliance on selling ads connected to Internet searches.

But now-
“We have to behave as though we don’t know” what’s going to happen, says Google Chief Executive Eric Schmidt. The company will curtail the “dark matter,” he says, projects that “haven’t really caught on” and “aren’t really that exciting.” He says the company is “not going to give” an engineer 20 people to work with on certain experimental projects anymore.

This fall, the company announced plans to “significantly” reduce its roughly 10,000 contract workers, whose jobs range from engineering to food services. While the timing and focus of the cuts remain unclear, Google employees already are joking that it’s getting easier to find a spot in the company’s crowded parking lots.

Google has also begun chipping away at perks. In recent months, it reduced the hours of its free cafeteria service and suspended the traditional afternoon tea in its New York office. A Google spokesman says its core culture is not changing. “Our unique culture is an essential part of what makes Google Google,” he says.

Early in its life, the company said that it would always put long-term objectives ahead of shareholders’ short-term interests. It wooed the best engineers with generous perks, workplaces that feature pool tables and volleyball courts, and a promise they could spend time pursuing side projects. Inside the company, it was considered crass to talk about whether a project would eventually make money, say current and former product engineers. The measure that mattered most was whether a new idea would be good for the Internet user’s experience.

But now-

Some engineers complain they can no longer tap the employees and machines they need to develop their ideas. This is no small issue among elite programmers, many of whom joined the company for the chance to work on such projects, according to current and former employees.

In 2004, they wrote:

We provide many unusual benefits for our employees, including meals free of charge … We are careful to consider the long term advantages to the company of these benefits. Expect us to add benefits rather than pare them down over time. We believe it is easy to be penny wise and pound foolish with respect to benefits that can save employees considerable time and improve their health and productivity.

But now-

There’s no such thing as a free dinner. The company took evening meals off the menu: “Google has drastically cut back their budget on the culinary program. How is it affecting campus? No more dinner. No more tea trolley. No more snack attack in the afternoon.”

But what’s good for the diet isn’t necessarily good for the brand.

As BRANDEMiX continues to build out Employer Value Propositions and promote the inherent qualities in each organization that help them win the war for talent, we eagerly wait to see the impact these internal changes at Google have on the long term Employer Brand.

BRANDEMiX is forever.

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