· Features

The Finance Sector: How can employer branding still attract graduates in the recession-battered banking sector?

The financial sector has taken a battering, yet many banking groups still top the list of places graduates want to work. Why have these brands have stayed indestructible?

It was Brian Till, professor of marketing at Saint Louis University, who, in his 2008 book, The Truth About Creating Brands People Love, wrote: 'Nothing can destroy a brand more quickly than creating expectations, interest and promises about something that doesn't exist.' Writing specifically about maintaining brands in tight economic conditions, his sentiment is simple - no brand is indestructible.

But are the laws of employer branding in need of a rewrite? Exclusive research for HR by recruitment consultancy Freshminds throws up a fascinating paradox: despite 12 months of damaging headlines about the UK financial sector, most grads still want to work for it. The research finds specific firms' reputations seem to be bomb-proof - or at least credit crunch-proof. But how?

The tables come from two identical surveys conducted pre- and post the credit crunch. In 2008, Freshminds gave its Graduates to Watch list a free vote on the firms they most wanted to work for. In 2009 it was repeated. Staggeringly, the three top firms are the same in both surveys. Of note are repeated top three positions in 2009 for Goldman Sachs and Morgan Stanley - two of the mostly negatively reported of the investment banks. ('The halcyon days for staff are over at Goldman Sachs' - The Times). How is this so?

Alex Waters, director The Value Engineers, the employer brand consultancy that has worked for banks including HSBC and Citigroup, thinks that despite all the negative press, the finance sector has maintained a largely untarnished reputation because of the career benefits it can still provide. "Self-interest still rules," he says. "Banking has kept its reputation for high salaries, bonuses and a good life. Also, compared with other professions it's relatively easy to enter. Ironically, those banks that have weathered the storm will see their reputations enhanced."

But is the stability of these banks' reputations really the fruit of effort spent cultivating the employer brand? Some are sceptical. "All the banks use the same wording as each other; they all play a very safe, traditional branding game because they know they're still a good organisation to work for," believes Waters. But Michael Frankenburg, former PR guru at Ogilvy, disagrees. "Overall there are fewer banks in the 2009 list, and Citigroup has disappeared totally. It suffered some of the very worst headlines; there is a link there. What's clear is that the 'mystique' of the investment banks has remained, but nothing takes care of itself. This research shows the results of very well managed branding work in action."

Simon Barrow, chairman of employer brand consultancy People in Business agrees, saying grads are thinking carefully about the brands they chose. He argues firms such as Citigroup have an uphill battle compared with the likes of the slick Goldman Sachs.

"Recently Goldman made a commitment to create the most outstanding HR service in its sector," Barrow says. "This is actually what it said in a recruitment ad. The stability we see now is the result of this statement being believed. Yes, grads still see it as a CV-builder but people that were motivated by money are seriously looking at other aspects of the job, like work-life balance. Goldman has created, and is benefiting from being seen to present a more balanced working atmosphere."

But how have heads of recruitment in some of these companies positioned their employee brands during this turbulent period? HR magazine spoke to two of them.

Want to read more? Sarah Crawford, head of graduate recruiting, Goldman Sachs, answers our questions; Brett Minchington, CEO of Employer Brand International, shares his thoughts. Read both at www.hrmagazine.co.uk/features


It is not just the financial sector that needs to protect its corporate brand. Grad Tract 2009, a survey of 1,027 law students from employer brand consultancy Acritas, found a quarter (24%) of respondents said they were this year dropping one of the 'Magic Circle' law firms from their considerations, despite previously favouring them. Top of their grievances were firms appearing unapproachable or hostile (15%). A further 9% of students ditched firms because they had been given a poor impression at a recruitment fair, while 6% cited unhelpful HR staff. Two Magic Circle firms have sustained heavy losses in favourability compared with last year: Allen & Overy and Clifford Chance. In contrast Irwin Mitchell increased in favourability by 4% and entered the top 10 for the first time. Friendliness and approachability was cited as the number one factor driving favourability (21%); proactive recruitment came second (16%); good reputation and gaining positive feedback came joint third (15%).

Goldman Sachs 72
McKinsey 61
Morgan Stanley 32
Boston Consulting Group 23
BP 22
JP Morgan 18
Lehman Brothers 15
Accenture 12
Bain 11
Citigroup 11

McKinsey 76
Goldman Sachs 54
Morgan Stanley 28
Boston Consulting Group 20
Foreign Office 18
Barclays Capital 16
PricewaterhouseCoopers 16
Bain 14
Unilever 14
Innocent 10


What the papers said: 'Morgan Stanley extinguished the tentative flames of optimism, with a loss of $159 million for April to June'; 'The hefty bonus pot (72% of its net revenues) shows it needs to woo more top performers' - Guardian, July 2009.

In reality: September 2007 - reports 17% drop in profits; October 2008 - shares fall to levels last seen in 1994; Morgan Stanley converts to being a bank holding company.

The HR response: Morgan Stanley has just posted its third quarterly loss in a row. This compares with JP Morgan, which has repaid the $25 billion it received from the US government, and has more positively been described as 'one of the great survivors of the credit crunch'. So why does Morgan Stanley, not JP Morgan, enjoy a higher ranking among grads? Stephanie Ahrens, an executive director responsible for graduate recruitment, says there has been a "credit crunch effect" but she is responding by cultivating a specific Morgan Stanley brand: "Applicant numbers are up overall, but where we had difficult press - such as in investment banking - numbers were slightly down. In response to the credit crunch, we have taken a different branding approach. For the recent intake we took senior managers onto university campuses to explain what was happening in the market - it's a markedly difference from our previous 'join us' approach. We're acknowledging there is a problem in the economy, but that we are taking action that will position us to come out winners, and for those who want to be a part of it there is a career ahead of them." The change was a direct response to the economic climate, but Ahrens says she is likely to keep this approach. "We're planning for 2010. We will be revamping our website to tell grads what's happened over the past 12 months, and we'll be explaining major sector events as they happen. It's to showcase the Morgan Stanley view that we will continue to be open, regardless of the economic environment."


What the papers said: 'The decision to hire Jim Renwick from troubled UBS demonstrates the ambitions of Barclays Capital, the investment banking arm that bought the US operations of collapsed Lehman Brothers at the height of the banking crisis last year' - Guardian April 2009.

In reality: November 2007 - writes off £1.3 billion in credit; September 2008 - acquires Lehman Brothers' main US division, making it the third largest investment bank in the US.

The HR response: Lehman Brothers disappears off the 2009 list, but Barclays Capital (which bought it), suddenly makes its first entry. Jane Clark, head of campus recruitment, Europe and Asia, Barclays Capital, says this is no coincidence, and for her, the aim is to absorb this brand into the other to create a new Barclays Capital: "We're only 12 years old, so compared with our established rivals, we have some way to grow our employee brand. The plus side is that we're still growing and the acquisition of Lehman means we can extend the sorts of graduate opportunities we can offer." According to Clark, grads increasingly understand the major players in the sector, and they respond to those that can talk to them in their language. "We did a study of our own new starters recently to ask what our brand meant to them. Our strong reputation was what came out on top. It shows they do read the papers to find out where the best opportunities lie." To make sure she conveys this, Clarke says the firm has shifted from doing campus fairs at specific times of the year to having virtually an "all year-round presence". She says: "This is now the absolute minimum our branding team has to commit to. We're going beyond fairs by introducing forums, educational skills workshops as well as being guest lecturers and speakers at events that showcase our CSR credentials. Our next brochure is branded 'Expect something different' - this is how we're trying to position ourselves. It's a competitive market out there, but we're not the same as other investment banks."

Goldman Sachs

Sarah Crawford, Head of Graduate Recruiting for EMEA answers our questions:

·          You  appear first and second amongst grads as ‘the' place to work, despite a  year a negative headlines about investment banks in general. What do you  put this down to, and how important is cultivating your employer  brand?

Hopefully students are able to see that this is an exciting and  extremely interesting time to be in the industry. There is so much  change taking place and opportunities being created.  For people who  want to make a difference, you could argue that this is one of the best  times to join the industry.   

·          What activities  do you do to ensure Goldman Sachs stays front of mind in graduates'  eyes?

We actively take part in the main recruiting season (in October and  November) through careers fairs, our own Goldman Sachs presentations, skills sessions that we run such as ‘How to make the most of your  internship' or ‘CV building and interviewing. In addition, we are  involved with Societies, lecturing and information ‘drop in' sessions on  campus. We feel that meeting students and having the opportunity build  relationships is a fundamental part of our recruiting  effort.  

·          has the credit  crunch forced any changes about how you want to position yourself to  candidates?

The message we are keen to make sure students understand is that we  are still very committed to hiring at the graduate level.  Students are looking for opportunities to recognise and develop their skill sets, they want to define their career path early on and they are keen to be  part of an exciting and challenging environment. We can still offer  all of this and more and in that sense, nothing has changed.

·          Did you worry  there could have been a ‘credit crunch' effect on people deciding not to  want to join the business (ie that the reputations of banks was now so  low, it would have an impact on recruitment?)

We are quite sure the events of the last year have meant that  students are thinking even longer and harder about career choices. As a firm, we have a huge amount to offer those starting out in their careers and despite the challenging year there are still a large number of students who feel they have the right background and interest to be part  of this industry.



 Brett Minchington, Chairman/CEO Employer Brand International writes:

·        Graduates build up a level of ‘brand trust' over time based on their interaction with a brand and factors such as the company's long term performance, its reputation, previous ranking, their level of brand salience, exposure to media. This may provide reason why the rankings have defied logic! The companies you refer to are well known to graduates and I doubt unless a company has received a large amount (or the lion's share e.g. as in the case of Citigroup) of bad press for unethical or practices likely to outweigh any other attribute (e.g. think Enron) I believe graduates will have put the global credit crisis into perspective and will continue to choose these companies as a preferred place to work as they have in the past. The investment banking sector will recover and these firms are perceived as industry leading companies and will continue to rank high unless involved in a serious scandal or devaluation. Previous research tells us graduates rank top companies high on attributes including: career development, a great place to launch a career, global opportunities, working environment, salary, reputation, ability to foster strong networks, etc. Each graduate will make a decision based on the sum of these attributes (‘the employment package'), albeit the weighting they give to each attribute in influencing their decision may differ. i.e. reputation is only one part of the package of attributes which influences their employment choice."

·        The investment banking sector is also a strong attractor for graduates as it has a reputation for rewarding top performing (though this could be questionable in the current economic climate!) employees financially and paying large bonuses to employees. The Wall Street Journal recently reported, "Nine US banks that received government aid money paid out bonuses of nearly $US33 billion last year - including more than $US1 million apiece to nearly 5000 employees - despite huge losses that plunged the US into economic toil. Six out of the nine banks paid out more in bonuses than they received in profit! These statistics alone may provide insight into why the investment banks still rank high on the places graduates want to work if salary is a key driver of employer attractiveness.

·        I believe graduates want a great start to their career and see these companies as a great place to launch their career and/or stepping stone to further their career, whether it be with the same company or with another i.e. I believe graduates take a shorter term view these days than previous generations who viewed a start at a company with a view of a 10+year tenure. My discussions with my own University students inform me they are still strongly influenced by the corporate brand than the employer brand. This is why I believe there are significant opportunities for companies to leverage this and form strong connections with students earlier on in their studies to enhance their employer brand rather than leaving it to only six months before they graduate. This will be more critical as the demand for graduate increase as the economy improves and shortage of talent intensifies.

·        Some graduates are still prepared to join a company with a poor reputation if the personal benefit outweighs any risk associated with joining the firm i.e. the offer of a strong career development, opportunities for travel, etc. They are prepared to sacrifice short term for long term gains.

·        There is a level of escalation to commitment. Graduates who have studied the past 3-4 years with the aim of entering investment banking may see it too late to change their industry choice.

·        Company activities are becoming more visible due to the acceleration of people joining and posting comments on social and business networks such as Facebook, Twitter, Ning and LinkedIn. As a result companies who promote ethical and responsible practices will, in the long term, continue to feature high on the ‘best places to work' lists and these lists will become a more reliable source as an indication of a ‘best place to work,' as graduates will be ranking companies based on a higher level of touch and insight into the company gained through discussions on online communities.