Have the days of companies solely serving shareholders flown the co-cos nest? Society expects companies to change. Is this "woke capitalism" or a major brand awakening?
Julie Calli joins Chad and Cheese to talk brand impact during atrocities and war.
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INTRO (1s):
Hide your kids! Lock the doors! You're listening to HR’s most dangerous podcast. Chad Sowash and Joel Cheeseman are here to punch the recruiting industry, right where it hurts! Complete with breaking news, brash opinion and loads of snark, buckle up boys and girls, it's time for the Chad and Cheese podcast.
Joel (22s):
Oh yeah. What's up everybody. It is your favorite guilty pleasure the Chad and Cheese podcast. It's another Cult Brand series with Recruitment Marketing's Julie Calli. And today we're going to be talking about a little bit of Russia, companies pulling out what it means to your brand, retention recruitment. Let's get into it guys. We'll be right back after this quick break.
Chad (47s):
It seems like the days of companies saying they serve only shareholders are long gone and that society's expectations for companies have changed since co Coca-Cola sold soft drinks in Nazi, Germany and Heineken brewed beer in Rwanda during the genocide, there is this what we would classify as quote unquote, "woke capitalism", or is this a major awakening? Is this what cult brands are all about? What do you think, Julie?
Julie (1m 16s):
Well, I think the term cult is a group that is joined by shared or common beliefs. So yes, a brand is uniting people based on what they believe. That is how they bring both their employees together. And they get a consumer following as a cult brand. So yes, how they're responding to the humanitarian crisis in the Ukraine is a defining moment for a brand and companies are under pressure to make these choices right now.
Chad (1m 49s):
Yes they are.
Joel (1m 51s):
And many are bending to that pressure. As we've talked about in past shows about who's leaving Russia in light of the invasion of Ukraine, we're talking big tech, we're talking Google, Microsoft, Facebook, we're talking consumer brands, McDonald's, Coke. We're talking about even in our space, the likes of Upwork, Fiverr, Indeed, and Adzuna have all made statements about leaving the country. So the pressure is real and companies are really coming to terms with what their brand means in terms of the promise that they make to consumers, customers and the public at large. But we want to talk about a lot of things, but I think first, we might want to start about the impact on recruiting and retention that comes along with doing business in countries that aren't necessarily in line with our values.
Joel (2m 42s):
Any thoughts on that, Julie?
Julie (2m 44s):
Well, every company's making a choice. Are you in, are you out? And most of them are making the decision to do nothing, right? Paralyzed with choice. Which side do I stand on? What do I do? What are the pros and cons of this? But in recruiting, right? If we talk about job seekers and what they want today, they want to belong to an organization that's aligned with their beliefs. So how a company is responding, this could have a huge impact on their recruitment and them as an employer brand also what it says to their own employees, as their employees look to their employer to say, well, what are you doing about this?
Julie (3m 25s):
We have people there. We have business there. What are we going to do to, to show where we stand and our beliefs, you could lose employees over your choices. You could win new talent over the choices. So there's a lot at stake for companies to make this choice.
Joel (3m 42s):
No one wants to go to that cocktail party working for that company that's in bed with a dictator, I think is what you're saying. Right?
Julie (3m 49s):
Well, said.
Chad (3m 50s):
Listen to this. This is hilarious. So this is a quote from our friend, David Solomon, over at Goldman Sachs. He told a Time magazine quote "I don't think businesses are supposed to decide how global trade works in the world." And then good old DJ Sol drops a memo with this excerpt, quote "None of us can fail to see this for what it is, the invasion of a sovereign state. Then they pulled out of Russia". That is bending to the market. Now, the question is, does DJ Sol really give a shit about recruitment? Or is this really just shareholders? I mean, what's really forcing this to happen right now?
Joel (4m 32s):
And who the hell is DJ Sol? Should I know them?
Chad (4m 36s):
David Solomon, the CEO of Goldman Sachs.
Joel (4m 40s):
Oh, he's not a DJ? He's not actually a DJ?
Chad (4m 42s):
Is a DJ. He goes by DJ Sol. The guy's like 90 fucking years old.
Joel (4m 47s):
I'm saying he doesn't mix records. Is what I'm saying.
Julie (4m 50s):
He's good at tracks.
Chad (4m 51s):
I think he does.
Joel (4m 52s):
He doesn't have a fresh prince.
Julie (4m 55s):
Well, I would say David's probably not responsible for talent acquisition, recruitment or employer brand with a statement like that.
Chad (5m 3s):
If he doesn't have people though, he can't make the shareholders' money.
Julie (5m 8s):
Correct. Right? So the real challenge that, you know, people that are responsible for talent acquisition and talent attraction they understand that these are things that they have to face in the frontline with their employees. This is absolutely to do with motivation and retention of your existing workforce. I mean, when you look at it, you have to have a brand stance that you at least support the basic rights of humans. Right if you don't, then people are going to question you as an employer. You need to give material for them, your own employees, even to go home or somebody who you want to build excitement with that you want to come work for your organization.
Julie (5m 52s):
You want them to be able to go out on a date or sit down at the dinner table with their family and talk about what their employer is doing, or the company that they are interested in working for is doing, that's making a social impact.
Joel (6m 7s):
Daddy, why do you work for a company that does business in Russia?
Chad (6m 13s):
Why do you support Putin?
Joel (6m 15s):
Are we seeing job descriptions and/or like Glassdoor reviews yet around, you know, siding with Ukraine or we're, we're getting out of Russia. Are we seeing that or do you think we will if we're not yet?
Julie (6m 29s):
I'm seeing a lot of activity. If you just look at LinkedIn as an example. You're seeing a lot of activity of individuals who are proud of their employer for taking a stance for having some type of activity that they are doing to support the people of Ukraine and that that's real evangelism of your own people that they are telling the world. Not only am I proud to work for this company, I'm proud to tell the world that I'm proud of working for this company. And that creates opportunity for someone else to say, Hey, you know, I'm not happy at my company. It looks like you have found a place that really connects with my values.
Julie (7m 11s):
Can you introduce me to your recruitment team? That is where there is that potential to use this as a way to really say, who are you as an a brand and attract more people that are like-minded. That is cult status.
Chad (7m 25s):
So in what about the leaders in those industries? And let's just look at ours real quick. Okay. So Adzuna, at least from what we saw on LinkedIn, they dug in Adzuna pulled out of Russia first. Then Indeed followed then talent.com followed. But I mean, Doug, the CEO of Adzuna was very vocal in challenging the other brands to do so. Now that says a lot for that brand, for that organization, for that leadership vision. But those others that followed along, I mean, do they get as much credit? How does, how does this work and do you want to work for one of those followers or does it even matter?
Julie (8m 6s):
Yeah, I would say I really respect when someone takes a clear position because it's identity that is brand. Who are you? Right? When you take a clear position, then it's clearly understood. If you do nothing, then it's not known. Right. So it could be either, right. Are you in support? Are you for, are you not? So where companies are kind of positioning is, you know, they're either closing, they're pausing, they're condemning, right? Maybe they can't actually do the actions to close or to pause, but they can at least condemn, but to show support, like that's the minimum there. Like have support for the people who are going through a horrible experience right now.
Julie (8m 52s):
Doesn't matter where you stand
Chad (8m 53s):
As condemning enough. No, because if you think about it, so let's say for instance, Proctor and Gamble, who they've discontinued all new capital investments in Russia, significantly reducing product portfolio. I mean, they're doing a lot of stuff, but they are partially pulling out. If they fully pulled out, they risk more than likely Russia taking over that entire manufacturing facility, which serves 70% of all razors in Russia. So, you know, it's a big difference between Proctor and Gamble, 70% market share in Russia with manufacturing and Netflix who can just switch on the tech and switch it off.
Chad (9m 36s):
So again, how do you differentiate between those two?
Julie (9m 39s):
Yeah, this is tough, right? This is where companies really have to make decisions based on their values. There's so much risk in this. So I don't blame any brand or leadership team or company that's struggling right now to determine how to respond to this. It is a very difficult thing, but it doesn't always have to be all or nothing or in or out. You can take a position and still be careful about how that manages the risks that are associated with your business. There's lots of cons associated with, you know, taking a very firm position, even for leaders to speak out and condemn there's threat.
Julie (10m 27s):
There has been threat from Russian prosecutors that would arrest corporate leaders who criticized the Russian government. So that's a risk as a leader to speak what your thoughts and your views are. They're seizing assets if companies withdraw. So that example that you brought up with P and G, right, but also P and G is supplying goods to that market. By cutting that off, we're also cutting off the people, right? We're creating, we're adding to the humanitarian crisis by also punishing the people of Russia who are not the day to day decision makers of what's taking place.
Julie (11m 9s):
Nationalizing the assets of these brands, that is a real loss for a company. Like you brought up McDonald's. McDonald's has made a decision to close their stores. That's 850 restaurants. Now, if you think about that, that's 62,000 employees, they're losing about $50 million month to make that decision. And then they're also impacting the people of Russia where McDonald's was an affordable cost of food for many. And now in a time where they're financially crippled, that is cutting off an opportunity for people to get a daily meal.
Chad (11m 45s):
Yeah. I think you take a look at McDonald's that's about 3% of their operating income and about 9% of its revenue. So 9% doesn't sound like a lot, but it is. But I also have to think that, you know, we've heard about, let's say for instance, we did a story on OnlyFans shutting down their Russian content providers. Right. Then they started them back up because they said, well, you know, those people, it's not their fault. Well, you know what, it's not the Ukrainians people's fault that they can't create content now either because they're being bombed to shit. So the question is, you know, if we talk about the poor people of Russia, we're forgetting the poor people of Ukraine.
Joel (12m 26s):
By the way, we'll put, Julie's OnlyFans account in our show notes if you want to check that out.
Chad (12m 33s):
She does origami. You should buy. Yeah. It's great.
Julie (12m 35s):
Yeah. There are a lot of cons to be careful of. And then which people are you choosing to support the rights of? Well, it's all people, it's all people. Always right? The basic rights of people and their access to food and water and safety, that should never be in question and it doesn't matter who you are. So brands have a lot at risk, these relationships, this business that they've established in Russia, they've taken decades for them to establish. I mean, McDonald's did not open up 850 stores overnight. It took time.
Chad (13m 13s):
30 years. Yes.
Julie (13m 14s):
You know, and what I would say is to any company or anybody who's looking at this and saying, oh, how is it possible that you could shut down activity all at once? How could you ever expect to restart? Well, we just did that in a pandemic. We shut down the whole globe and found ways to carry on. So I would just say, even if you look at the most impossible things that we face just recently with addressing, you know, COVID times we found a way to good move on, we will do the same in this case. So yes, it seems like there's a lot of risk out there associated with that. And every business needs to decide that for themselves. But what I would say is take a stance.
Julie (13m 57s):
You, you, you're better off saying to the world for the pressure that you're probably getting from your investors, the pressure you're probably getting from your consumers and your own employees that are looking to you to say, who are you as an organization? Because that's what I need to decide. Am I part of this? Where do you stand in this?
Joel (14m 13s):
What I love about this is we're getting into the nuance of this issue. And when it first sort of came to light, it was like, fuck Russia, let's get the hell out. They suck. But now that we're digging into it, we're, we're looking at things like, well, okay, there are franchisees who have agreements to open up, you know, a Papa John's or a KFC in Russia. There are certain legal boundaries that we can't cross. So to someone on the outside, it looks like, oh, well, Papa John's is still, you know, they're still in Russia. When in reality there's a franchisee agreement. So as an employer, how do you deal with that? I think those are really challenging issues. And also think of thinking about how many Russians are being impacted by this.
Joel (14m 56s):
We talked about Upwork and Fiverr, leaving Russia on the weekly show, how many contract workers, you know, young people or people with, you know, developers and programmers and designers that can't really get work anywhere else are now shut off from the world. This is the nuance that I think is great that we're talking about. But, but Julie, I'm curious for the companies that do have complicated agreements in Russia, and can't get out all the way. How do they spin to employees and perspective employees?
Julie (15m 28s):
Well, again, right. We bow every one company, every person should believe in support the basic rights of humans. So if your business, it has something that's involved with supporting those basic rights for humans, then that's what you should be leaning in on. What is it that you're doing that's essential to that? So, you know, if you're a company that has commitments to franchisees within that country, that then you have an agreement for that. You have to continue to fulfill that I'm not the right person to probably answer for what the best risk and the best political move is for that, for that business. But what I will say is there's going to be economic instability.
Julie (16m 11s):
That agreement that you have is going to be threatened in jeopardy because of the economic instability happening within there, within inside the country. The safety of your workers that's also something companies are going to have to consider if they're continuing to operate and they're continuing to support business in that area, there's also safety concerns of the workers in their families. So you have safety, you have financial, these are all things that are business decisions that go outside of just brand that companies really have to face and determine what is the best risk assessment for them.
Joel (16m 41s):
So, as I understand it, I just want to talk through this a little bit. If Russia, nationalized McDonald's can the Russian government operate McDonald's and keep employing those workers and just hope to hell that people realize it's not the real McDonald's because as I understand that McDonald's has little legal recourse. If the government of Russia wants to set up a bunch of McDonald's burger joints?
Chad (17m 6s):
They won't have the supply chain. Obviously.
Joel (17m 8s):
The product won't be near the same, but they can
Chad (17m 10s):
No, no, no, no, but they can do whatever they want. They can name it, whatever they want,
Joel (17m 15s):
That's going to happen.
Chad (17m 16s):
There's a good opportunity for it to.
Julie (17m 22s):
Well, this is where, you know, McDowell's comes into play.
Chad (17m 25s):
There it is. Nothing like a Coming to America reference.
Julie (17m 25s):
Yeah. The McDowell's we start seeing one of those on every corner. Well, there there's a lot of businesses at risk with this, right. You know, you, Chad, you brought up that example of P and G. They have a large operation there. And all of the companies that have, you know, manufacturing plants, that have a lot of facility set up. So not only are they at risk of losing the property.
Chad (17m 50s):
Assets.
Julie (17m 51s):
But they're also at risk of losing the people, right?
Chad (17m 55s):
Yeah.
Julie (17m 55s):
Those workers can be redistributed into a different way. Now that plant can produce something else and it could be another product and it could slap a new label on it and send it out. Companies are very exposed and have a lot of threat in that way.
Chad (18m 16s):
Well, now that you see this, right, and you are a brand, let's say you don't have a presence in Russia, but in five years, if you're a brand and you don't have any type of representation in Russia, five years from now. Do you go there? I mean, do you take the chance because there is an opportunity that McDonald's becomes McDowell's?
Julie (18m 37s):
Yeah. I mean, this is every company has to make that decision and it goes beyond just your brand in that case, their financials. There's risk assessment.
Chad (18m 50s):
Loss of assets.
Julie (18m 51s):
Yes. Loss of assets, and, you know, exposing too much of your own, you know, secret sauce. A lot of companies that have those operations today that are running very successfully have spent decades to create them. Now it can be easy to say, we quit. We walk away, but rebuilding, any of that, re-establishing that, from that is going to be a challenge. Is it possible? Yes. I don't think I'm probably the best person to speculate what the outcomes would be for companies, you know, provided everything just resets tomorrow and everything goes back to normal.
Julie (19m 32s):
I think that companies being impacted now that are looking at how there's a lot of geopolitical activity that can happen anywhere. And what does that do to business? A brand should be less geopolitical and always be more human rights that will never change. Right. For a brand, always believe in the humans, the politics will come and go like the weather, as long as companies are leaning in and always thinking about what's best for the people. That is what will make a difference for a brand, but for financials well, that is all different type of market.
Chad (20m 15s):
Yeah. Yeah. So on the weekly show, I believe it was a weekly show or the European show this year. We talked about it a couple of times this week, we talked about Fiverr and Upwork leaving and knowing that there is a large percentage of the work that happens on those two platforms is coming out of Russia. From a technical standpoint.
Joel (20m 38s):
10%.
Chad (20m 39s):
The opportunity for brain drain here, because you can actually have all of these Russians leave for neighboring countries and perspectively not come back. The brain drain for Russia is high here. Don't you think?
Julie (20m 50s):
Yeah. We're already at a talent crisis and we're going to alienate an entire country of talent. That seems very frustrating. That frustrates me. Because again, it's not about the people. I don't believe that every individual person that is trying to make a living in Russia is, you know, having the power to make the decisions that are creating the crisis. I don't believe that. There are a lot of talented people in Russia who have the opportunity to fill in the talent gaps that we experience through a lot of these platforms like Upwork.
Joel (21m 28s):
Do you think Russians become toxic? Do people stop employing at a rate that they would normally, or, you know, if I'm looking for a contractor on Upwork after the dust has cleared on all this and maybe Putin's out of power, am I less likely to employ Russia? Or if Russia is decimated, am I more likely to now want to help and employ Russians?
Julie (21m 50s):
Well, I would hate to see that, right, because that starts to breed a whole new form of discrimination. You know, based on where you were born, whether or not you're employable.
Chad (22m 1s):
Yeah. We've seen it before. Right?
Joel (22m 2s):
It's gonna happen.
Julie (22m 3s):
Right. We would never want to see that to be the case, but could somebody's political views impact whether or not they're hireable? That is already true. And you can see that when background checks are done and people look at someone's activity on social media and how they're behaving in response to political activity and things, absolutely companies are making decisions on that in the review process.
Joel (22m 32s):
That's actually interesting. So companies like Fama that look at social profiles, do you think they're now going to start looking at any pro Putin comments or pro-Russian comments? I'm serious.
Chad (22m 45s):
Yeah, yeah.
Joel (22m 46s):
Like, just like if I make racist comments, if I make an pro-Putin comment, am I now out of the running to be an employee?
Chad (22m 55s):
Yes. Madison Cawthorne you are
Joel (22m 56s):
I don't know who that is either. You with the names today.
Julie (23m 1s):
You making racist comments on their, you know, their profiles that doesn't align with a company's cultural values then. Yeah. It's a disqualifier. I'm glad that it would be.
Joel (23m 10s):
So now they're going to put in pro Putin or pro-Russian right.
Julie (23m 14s):
So that's a big stance for a company to take, that I would say is geopolitical. That I have caution with that. But do you believe in human rights? That's where the emphasis should stay. That we believe that all people should have equal opportunity.
Joel (23m 33s):
Will someone get a job and then be fired because during this time they made a Pro-putin comment, that's going to happen. I promise. It's not a question. I'm just making a crazy statement. But I do have a question, Julie, we've talked about Procter and Gamble quite a bit and Old Spice, my father's favorite cologne has a commercial now featuring Ivan Drago, which was his old gen X-ers know was the boxer who took on Rocky and is sort of like the figurehead of the USSR in the eighties.
Chad (24m 7s):
Rocky IV.
Joel (24m 8s):
He's in a fricking commercial and the commercial is still running. Cause I saw it today and I thought, oh, they're going to definitely get this off the air. Does that have impact on, on recruiting retention and brand status if you're running Ivan Drago in an Old Spice ad during this time?
Julie (24m 26s):
I mean, I would hope that it would not. Right? We shouldn't cancel all of Russia.
Joel (24m 30s):
You're head of Proctor and Gambles marketing. Do you keep running that ad?
Julie (24m 36s):
I would say that P & G is in a challenging situation because of how much they have in Russia that they support 70%. Is that what you said, Chad?
Chad (24m 47s):
That was just for razors, just Gillette razors.
Joel (24m 48s):
Chad, would you run it?
Julie (24m 49s):
I haven't seen the commercial to be honest. I'm happy to get back to you with an opinion on that after I've seen it.
Chad (24m 54s):
I haven't seen it. Does he get knocked out? Because if he gets knocked out, yeah.
Joel (25m 1s):
It's really stupid because Old Spice commercials are really fricking out there, but basically like some guy's sweating and then Ivan Drago comes on. It's like the young Ivan Drago. So it's not even like the current Dolph, Lundgren, old guy. It's like actual young guy and he's got like sweat coming out of his pits. And then he puts on the deodorant and like, so there's really no sort of the Russian/ pro Russian or negative. It's just Ivan Drago. And I'm just, I'd pull it in a second. You guys haven't seen it. We'll get back to you if you do see it. But I can't imagine that the head of marketing at Procter and Gamble saying like, this is a good idea, let's keep running this Ivan Drago commercial.
Chad (25m 39s):
So Joel is a no. Okay. That's great.
Joel (25m 44s):
I'm pullin' out.
Chad (25m 46s):
Let's do this while everybody's pulling out, Julie's gonna give us the tips, Julie.
Joel (25m 51s):
The tips <inaudible>
Chad (25m 51s):
Julie you have, you have the tips for, you know, companies who let's say at this point right now, they haven't done anything. What are some of your tips from a marketing standpoint? From a recruitment brand marketing standpoint, for any company that's out there who really, I mean, maybe they're in the fetal position in the corner?
Julie (26m 10s):
So my advice to any company would be to do something. To do nothing is a statement, right? It does define who you are by doing nothing. Do something. Now that doesn't mean you have to be all or nothing. Or in and out. But again, how I said lean into the support of basic human rights. Now, why does this matter in talent attraction and recruitment? Because deciding where you stand gives the opportunity for people to stand with you. That's what you want to do. You want to evangelize your own employees to tell the world that they're proud of their employer. When they get out there on LinkedIn and they start talking to people at the barbecue and friends that they interact with, they are telling the people the story of where they work.
Julie (26m 58s):
Oh, I'm so excited my employer has made a decision, has made a donation and we're doing these things to be helpful and supportive to the cause. Most of their time is invested with their employers so how can the employer help them be part of that and stand together? So do something. Decide where you stand and if it isn't all in, then go all in. If you're out, because there's something that has a great risk associated with that, we'll then look at what other ways can you commit or how there there's always an answer that that can be uncovered there. But the worst thing you can do is do nothing at all. I'll get one more here on give your employees pride in your org, give them the ability to understand that you are a company that supports basic human rights and donate.
Julie (27m 50s):
Or give people an opportunity that you can support them internally. Do you even know? Do you have any employees who are affected by the crisis right now? Are they struggling? Are their families struggling? Can you do something internally to help your own people that might be directly impacted by this and give them pride so that they can tell the world about how proud they are to work for somebody who has made a choice of where they stand so that they can stand with you. It's less about being geopolitical and more about human rights. I would strongly recommend to donations to World Central Kitchen. If you watch the news, they're in the background of every shot because they are on the front lines, feeding people, wanting to help and support those things is the right thing to do for any person, for any company that is not something that's hard to stand behind.
Julie (28m 40s):
That's easy to stand behind.
Joel (28m 41s):
He be a proud boy, Chad. I think that's what she's saying. It's a complicated issue, Julie. We understand a lot better. Thanks for joining us as always. This has been the Chad and Cheese podcast, Cult Brand series with RecruitmentMarketing.com's Julie Calli.
Julie (29m 2s):
Thank you.
Chad and Joel (29m 5s):
Yes, we out.
OUTRO (29m 54s):
Thank you for listening to, what's it called? The podcast with Chad, the Cheese. Brilliant. They talk about recruiting. They talk about technology, but most of all, they talk about nothing. Just a lot of Shout Outs of people, you don't even know and yet you're listening. It's incredible. And not one word about cheese, not one cheddar, blue, nacho, pepper jack, Swiss. So many cheeses and not one word. So weird. Any hoo be sure to subscribe today on iTunes, Spotify, Google play, or wherever you listen to your podcasts, that way you won't miss an episode. And while you're at it, visit www.chadcheese.com just don't expect to find any recipes for grilled cheese. Is so weird. We out.