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The white paper deals with one of the current trends in the corporate- Employer branding which is building a reputation among the employees so as to attract new talent as well as retain old ones. Various factors of HR that affect employer branding such as recruitment, compensation to retirement are studied and analyzed. The return on investment of the process of employer branding is looked into along with the negative effects of wrong employer branding.
"RBS appoints Nimai Swaroop as the employer branding and marketing chief"
-The Economic Times 19th August 2010
"Yes Bank wins five awards at Asia's Best Employer Brand Awards and the CMO Asia Awards for Excellence in Branding and Marketing"
- India Info line 30th July 2010
Introduction: Why Employer Branding?
The above news articles highlight the growing importance given to employer branding in the corporate world. In todays' business era companies have realized that it is possible to differentiate oneself only with the human capital rather than tangible resources. Intellectual capital is an asset that formulates the strategy of the organization, is the knowledge center of the organization, the face of the organization that interacts with the customers as well as the media.
Companies have begun to realize that human capital will soon be the competitive advantage of companies as technology is catching up fast and is available at low costs to one and all.
With the global economic situation on the upswing employees are faced with more opportunities than in the past. Given the talent shortage, talent acquisition and retention will be major challenges in the following years with the added fact that most of the baby boomers are set to retire in the coming years. Attrition rate is on the rise as employee has an upper hand because of the fact that talent is largely missing. The recent trends in the IT sector where churn out rate has been as high as 16% is an example of how lack of an employer branding can result in high losses. Companies like Wipro despite measures like giving out ESOPS and launching Greenfield programs to attract it's previously employees has not been able to control the rate of employees churn out.
Gone are the days when companies could concentrate on the external customers alone and devise strategies to woo them alone. Now companies will have to look at ways of attracting the employee-the internal customers by projecting themselves as a great place to work in.
What is employer branding?
Brand is the image in the eyes of the customer. Employer brand is the essence of an organization captured in such a way that it engages the current as well as the prospective talent. It expresses that the organization is a best place to work in. The value proposition- the sum of the culture, systems, attitudes and employee relationships is conveyed by the company to the internal as well as the external stakeholders-the customers, potential employees, the partners etc. An employer brand is what attracts an individual to a company.
Employer branding consists of factors like the reputation, recruitment, compensation, leadership management, succession planning and the culture of the organization amongst others.
It is the employees who act as brand ambassadors for the organization to the outside world. They spread among the other stakeholders positive word about the organization when they feel so. A good brand creates a sense of belongingness to the organization and makes one an integral part of the company. An unhappy employee can cause a major damage to the organization in terms of loss of reputation and customers. Satisfaction should start from home, happy employees spread a positive word of mouth as well as put in their best and ensure maximum productivity for the organization. All efforts have become people driven.
Employees experience brand at various stages of their life cycle in the organization right from recruitment to retirement. Every activity that is regular in the organization should live up to the brand promise.
Factors of Employer Branding- the Employment Package
Recruitment: A good brand helps attract the best talents in the industry as everyone wants to work in a company known for its positive image in the corporate circle.
Culture: The values, beliefs and ideas followed within the organization that is imbibed by each of the employees. A good work culture with a good work-life balance will ensure happy and productive employees.
Leadership management/Succession planning: A charismatic leader can be a great source of inspiration to an employee and even revive a company from the throes of failure. A strong top management is a great attracting factor to an employee to join an organization.
Compensation: Compensation, contrary to popular belief is not the greatest motivator for an employee to choose an organization to work in. However the company must offer a package that leaves the employee satisfied at the end of the day.
Performance Management systems: Companies that have a transparent and unbiased system of performance evaluation and where rewards and benefits match the skill and work performance of an employee the level of satisfaction will be higher. Compensation and performance must be related to each other as there is a base pay and a variable pay that is dependent on the performance. This way high performer can be suitably rewarded while poor performers can be filtered out. The Employee Value Proposition (EVP) is the value that the employer offers for the skills of the employee. This is also called the Employer Brand Proposition.
Career Development: The company must also provide suitable opportunities for growth of high performers with multiple career paths, a challenging work environment and regular feedbacks for their performance. Star performers maybe identified and can be suitably groomed for succession planning.
Retirement/Exiting: when an employee leaves the organization then his experience with it must be so good that he must become a marketer of the organization to the outside world. Every satisfied internal customer helps build and convey the brand to the external customer as well.
Employer branding process:
The first phase is the concept phase where strengths of the current employer are determined.
Design phase consists of chalking out the EVPs and the EBIs.
This is followed by the Integration Phase where publicizing is done through intranet, internet, company newsletters, recruitment advertising and sponsorship of events.
The Evaluation Phase involves studying the impact of the Employer Brand program.
ROI of Employer Branding
Since potential employees are already aware of the reputation of the company attracting talent will be easier. The best talents in the industry will be available to choose from.
Compensation is not a major motivator for most employees. Given an option of a "great place to work" in with a marginally lower salary most employees will choose a branded company to another.
A reputed organization will have "branded employees" who will be sought after in the job market.
Employees have a sense of belonging with the organization and are proud torch bearers for the company. They are not willing to leave the company hence bringing down attrition and solving problems of talent acquisition and retention.
A good company reputation percolates down to the products and services of the organization as well and hence it acts as a way of marketing and communication for the product.
Happy employees will give their best to the organization increasing productivity and profits of the organization.
In a manufacturing set up management can have an upper hand while making deals and the likes.
HR and Employer Branding:
Employer branding and HR are closely related as has been seen in the above paper. The employee is an internal customer who is handled by the Human resource department. Role of HR in employer branding is immense and it involves all steps in the tenure of the employee with the company.
Conveying the Right Message:
Most organizations have understood the importance of employer branding and attempt to try and promote the company as a best work place through newspapers, advertisements etc. Sometimes even when the company does not follow certain best practices then too they tend to advertise so. Such bogus attempts can backfire on the organization and spell doom for it. If the people are happy and the environment healthy then the organization is healthy and if the organization is healthy so will the people be happy. When the employees are satisfied with the company however bad state of affairs the organization is then one can be sure that the problem will be overcome. An instance of this kind is the Satyam Computers whose shares plummeted in the market after some errors that were detected in its financials. Despite the company in a state of closing down the employees had faith and continued to work in the organization for minimum salary. With their encouragement and faith the company was able to turn around from the end to make a new beginning. A company with employees who have faith in the system can come back anytime.