JANUARY 2018

CONNECTIONS
Perspectives on enhancing engagement, creating strong
employer brands and accelerating business performance.

USE TAX REFORM SAVINGS TOENHANCE

YOUR EMPLOYER BRAND
by Cydney Roach, EVP, National Practice Lead & Sara Vallas, VP - Employee Experience

After months of very public debate on tax reform, U.S. companies are entering 2018 with a more
attractive corporate tax rate that has resulted in savings significant enough to demand an investment
strategy. Some high-profile companies have been quick out of the gate, making public statements on how
they will leverage this windfall and in some cases this has elicited strong reactions. Because employees in
every sector are eager to know what’s in it for them, we urge our clients to take advantage of this
opportunity to learn from this first wave of organizations who’ve declared their intentions. From an
employee experience perspective, we suggest you align your spend with your employee value proposition
and employer brand.

The Dialogue Thus Far

Numerous companies, including two telecommunication
conglomerates, a major airline, a financial services holding
company, and a major insurance company, have announced a
CORPORATE TAX REFORM
one-time bonus for employees, only to meet criticism that AT-A-GLANCE
these amounts are trivial compared to the potential billions
companies will save. Critics were quick to point out that the • Reduction of corporate tax
employee bonuses at one multinational banking and financial rate to 21% from 35%
services company accounted for just 4% of their estimated • Reduction of tax on
savings from tax reform. Further, USA Today featured a repatriation of foreign
headline focused on the very short-term investment companies earnings to 15.5% from 35%.
are making in their people, as opposed to more sustainable
value add: “Less than meets eye: Bonuses, not raises, from U.S. • Increase in expense limit for
tax cut windfall.” While other companies are investing in capital expenditures to 100%
longer-term spend, such as parental leave, 401k contributions, from 50% for five years.
base pay raises and training/development, some such as one
multinational retail company has seen these investments in
employees overshadowed by store closures and layoffs. This
topic is front and center in the public eye, featured on front pages of mainstream publications as well as
the local evening news. Your employees are exposed to daily stories about how organizations – including
your competitors – are sharing (or not sharing) the wealth. And because corporate tax reform

© 2018 Edelman
savings debates are also dominating social media
outlets, don’t forget that your employees’ ability to
share their opinions publicly is just a few keystrokes
away. In this environment, your communication
strategy is just as important as your spend strategy.
In this environment where there is a war for good
talent, ensure you are sending the right messages to
take advantage of this opportunity to bolster your
relationship with current and prospective employees.
Here are six points to consider as you formulate your
tax reform communications strategy:
1. Manage Expectations While Managing Your
Employer Brand
Taking a proactive position can prevent others from
filling the void. So don’t wait until you’ve got it all
figured out to speak to your people. Quell rumors
before they start by talking about how the company is
thinking about this investment and when you’ll be able
to share more with your employees. For example,
given the materiality of this news, some companies
may wait until they report financial results for the
quarter before revealing plans around tax reform
savings. In fact, town hall meetings around earnings
may be good timing for such announcements. Identify
some guiding principles for this decision and how
you’ll communicate them, remembering your people
will be looking to see how you’re delivering on your
employee value proposition and company mission with
your spend. Consider including employees in the
discussion so they feel heard and have input.
CURRENT HEADLINES
• Less than Meets the Eye; Bonuses Not Raises –
USA Today
• Corporate America Celebrated Tax Cuts by Laying
Off Workers – Vice.com
• Pfizer, Pocketing A Big Tax Cut From Trump, Will
End Investment In Alzheimer's And Parkinson's
Research – LA Times
• Tax Winnings In Hand, Chase Shares Some With
2,700-plus local workers – Crain’s
© 2018 Edelman
2. Reflect On Your Talent Strategy Before You
Launch
Get creative and think about what’s best for your
employees and your business in how you use the
windfall to fulfill your talent management strategy. If
you’re looking for smart, young people, consider
helping employees pay off their student loans or
helping students develop the skills you need via
scholarships or internships. Investment in better
training could pay off if you’re shifting your business
strategy or focusing on new competencies. Whatever
you do, make sure your approach aligns with your
organization’s mission and talent objectives. As an
example, one large insurance company announced a
values-based approach that provides enhanced
retirement and insurance benefits for their
employees, as well as investments that will help grow
their business in the future. In addition, any way that
you can tie your investments into key performance
indicators or overall long-term corporate goals
should be well received by your employee base.
3. Timing Is Everything
Are there other announcements from your company,
such as a planned layoff, that could reinforce or
detract from your announcement? Are the quarterly
or year-end results you plan to disclose in line with
internal and external expectations? These types of
news items can easily derail what should be a
favorable announcement. You can build a narrative
that ties recent and future activities into a cohesive
story for your employees about how you run your
business and pursue your company mission. Don’t let
others write this narrative for you. Take control by
developing a detailed messaging plan that lines up
with your long-term communication strategy and your
mission/vision/values and purpose.
4. Be Transparent In Declaring Your Purpose
Most companies are going to reinvest the bulk of
their savings to drive future growth. Yet many
employees don’t have a clear understanding of their
company’s long-term business strategy, so use this
moment to explain how your investment can benefit
the organization, customers, employees and
shareholders in the future. And if your company has
a purpose-driven brand, demonstrate how your
investment of tax reform savings supports it and how
employees can participate.
5. Tie Internal Communications to Investor
Communications
Edelman’s Trust Barometer Special Report:
Institutional Investors, revealed that 69 percent of
investors say companies that prioritize their
commitment to employees positively influence their
trust in them. More explicitly, respondents rank “poor
relationships with employees” as having a negative
impact on investor confidence. In short, investors
increasingly take notice of how well organizations
treat their people. And in drilling down to levers and
drivers of trust for investors, much of what we heard
in these survey results is directly tied to the employee
experience. In addition, investors are also paying
attention to how companies contribute to society as a
whole. The new power of purpose-driven
organizations is reflected in this late-breaking news
from one financial institution that is taking a stand by
announcing they now choose to work with companies
who are contributing to society.
6. Keep Up The Conversation
Once you’ve set your course, reinforce your
commitment to all your stakeholders over time in a
variety of ways. Tell the story about how your
investments are making a difference, whether the
result is happier customers, more engaged
employees, better business results or contributions to
© 2018 Edelman
the community. You can also engage your employees
and make it easy for them to be your brand
ambassadors in this effort via sharing platforms such as
Dynamic Signal or SocialChorus or EmployeeApp that
enable them to advocate for their company on their
own social channels.
This corporate tax reform savings windfall offers a
great opportunity to strengthen your employee value
proposition. The right spend and communication
strategies can differentiate your employer brand
exponentially.
To discuss defining, communicating and activating a purpose-
driven employee value proposition and employer brand,
contact: Cydney.Roach@Edelman.com
EDELMAN EMPLOYEE EXPERIENCE
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designing employee experiences that shift
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