Not so long ago, brand identities had an air of permanence. Woolworths was seen as a reliable employer, working for Northern Rock made you the pride of a regional community, and RBS was an enviable destination for high-flying graduates. But now that such long-held reputations can be burst in the blink of an eye, has the logic of employer branding been undermined – or has the recession merely pushed other brands to the fore?

One company whose brand is flying high is KPMG, which has just been named top of the “Best Companies to Work For” list in The Sunday Times, for the third time in four years. But the consultancy is far from immune to the downturn: only two months ago it announced contingency plans to allow staff flexible working, such as four-day weeks or sabbaticals, to stave off economic pressure. So why do employees continue to view its brand so positively?

“We’ve been working hard on internal communications with our people, and making our leadership visible,” says Rachel Campbell, head of people at KPMG. “Recession does not necessarily have to mean reduced engagement – in fact, it can mean that engagement rises if your people see that it is tough outside and that all of us inside the company are standing together.”

Campbell is in no doubt about the recruitment benefits of a strong employer brand – she says that success in the Best Companies list in recent years has led to an increase in applicants, and more diversity among them – but says that such branding must be more than skin deep. “We probably spend less on marketing than many of our competitors, but I would rather invest in the experience that people have when they come to work here,” she says.

The Best Companies list measures engagement by asking employees about their managers, teams and companies. Pete Bradon, head of research at Best Companies, says that while feelings about managers, teams and workplaces are concrete, feelings about brands tend to be more fickle. “Employee engagement is integral to employer brand in that it’s a measure of how proud people are to work there,” he says. “In some companies the firm is synonymous with a brand – Microsoft, for example – but the difficulty is that some companies cross multiple brands, such as a car dealer selling four or five brands of car. You could absolutely love working for somebody but not want to buy their products.”

Banks are the most obvious example of brands that have been hit hard in the past 12 months, and the Best Companies list partly bears this out. Morgan Stanley, at number eight, is now the only financial institution in the higher echelons of the list, whereas last year it was accompanied in the top 20 by Goldman Sachs, RBS Retail and Deutsche Bank, as well as Britannia Building Society. This trend is less a result of reduced engagement and more the fact that “three or four of the major players simply didn’t enter this year”, according to Bradon.

The inevitable effect of the past year is that graduates are now likely to think twice about choosing banking as a profession –that’s if there are jobs available for them. Indeed, the phrase “employer brand” conjures up images of recruitment – snappy stalls at graduate-recruitment fairs, lavish websites and brochures and impressive advertisements. So when recruitment grinds to a standstill, is it still worth concerning yourself with, or investing money in, your employer brand?

“That view is based on a misconception and it goes back to the fact that, too often, employer brand is perceived as being purely recruitment related,” says Martin Cerullo, director of resourcing communications at Alexander Mann Solutions. “It operates through an employee’s whole lifecycle – retention is just as important. In years such as this, you could argue that even more needs to be done to manage your brand proactively. Hiring is down but it has not stopped, and there are more negative perceptions out there that need to be handled.”

Spending on recruitment processes might be falling, but there may be a greater call for internal communications and leadership training, says Cerullo. Tough times could alter what people value in a job: if candidates and staff are placing a greater emphasis on security, for example, your brand should reflect that.

Julia Claydon, HR director at restaurant chain Nando’s, is another believer in creating a strong brand (Nando’s did not enter the list this year but received the maximum three stars in Best Companies’ accreditation scheme). “For me, employer brand is what we stand for – what do you want people to say about you and feel about you when they work for you,” says Claydon. “In our sector, we are quite well known, but good branding through awards such as this helps when you are recruiting outside of your sector, in support functions such as HR, IT or finance. Let’s face it, our sector has not always had the best name in the world for the way it treats its people.”

Indeed, whether it is Iceland, KFC, McDonald’s or Subway, the evidence is that retailers of affordable food are doing best in the economy, and are taking on extra staff. But many still have overcome negative perceptions about their employer brand, as opposed to their strong consumer brand.

Susan Yell is HR director at Iceland, which came fourteenth in the Best Companies list. She says that the firm’s employer brand and consumer brands both revolve around creating a “family feel”. But she adds: “Our challenge is to ensure that people do not confuse our positioning as a low-cost value retailer and assume that they would be faced with a ‘budget’ experience as an employee.”

The essence of a successful brand remains elusive, but even in tough times a good brand can be an undeniable strength.

Rebecca Clake, CIPD adviser, organisation and resourcing, says: “Employer branding is still important, and in times such as these it’s more important than ever. Budgets are under pressure, and it’s now that HR needs to demonstrate that it is true to its principles. If you cannot avoid making redundancies, then you will need to work hard to look after the people who are leaving and the ones who remain, to retain the impression of how good an employer you are.”

The top 20 best big companies to work for
1 (1 in 2008) KPMG

2 (15) Bourne Leisure

3 (7) American Express Services Europe

4 (14) Marriott Hotels

5 (8) Mott MacDonald

6 (4) Sytner Group

7 (11) PricewaterhouseCoopers

8 (9) Morgan Stanley

9 (12) Deloitte & Touche

10 (13) Atkins

11 (6) Telefónica O2

12 (–) Accenture UK

13 (18) Mothercare

14 (–) Iceland

15 (19) AXA

16 (16) Mouchel

17 (–) British Gas

18 (17) Vodafone

19 (–) Barchester Healthcare

20 (–) 3663 First for Foodservice