Methodology: The approach adopted is the reviewing of books, journals and websites spanning topics such as talent management, strategy, human resource management and employer branding. Employer branding is explored from the point of view of its fit with corporate and business strategy and its interaction with other functional areas of the firm with emphasis laid on marketing. Some crucial elements to its application are briefly outlined to provide clarity on the conclusion.
Findings: Employer Branding is a highly complex endeavour as it seeks to offer value and create sustainable competitive advantage by aligning the values and culture of people with those of an organisation. It is used to define and refine the employment relationship to engender loyalty and commitment from the workforce. It also aids in providing a focus for recruitment and performance management practices. There is however, still much work to be done in defining appropriate metrics of measurements in its application, to fully appreciate its impact on performance.
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Conclusion: Employer branding is a highly complex and onerous discipline as it seeks to control and or manage individual and organisational behaviour. It however provides extremely high value rewards where competently implemented and is thus a very advanced form of strategic human resource thinking.
One of the meanings of Strategic Human Resource Management (SHRM) is given as: 'Seeing the people of the organisation as a 'strategic resource' for the achievement of 'competitive advantage' (Hendry and Pettigrew cited in BBS MBA HRM Course handout 2010-11, session 2 p.2). Employer branding (EB) has been advanced as one of the practices to achieve this. It is alleged to be the most advanced and sophisticated form of human resource (HR) strategic thinking. It is this allegation that this paper seeks to discuss.
It will do so by first evaluating organisational strategy and how HR strategy supports it, linking this with the more recent practice of talent management (TM) of which EB is a key component. Next will be an exploration of EB itself: what it is and what it is not. The paper will then look at some crucial elements in building an EB citing examples for clarity and showing how this correlates with the HR activities of recruitment and performance management. There will then be a critical review beginning with key success factors and going on to highlight areas for further reflection. The conclusion will be the author's views on the sustainability of employer branding as HR strategy.
The Link: Corporate - Business - Human Resource Strategy
Strategy can be said to be the comprehensive master plan of how an organisation will achieve its mission and objectives. Its core function is to maximise competitive advantage and minimize competitive disadvantage. Organisations usually adopt three types of strategy simultaneously:
Corporate Strategy: The overall direction of the company, usually growth, stability or retrenchment
Business Strategy: Also referred to as competitive strategy. It defines how the organisation chooses to compete in its identified and targeted market (Johnson et al, 2008) and the bases of its competitive advantage which could be one of 3 types based on Treacy and Weircema (cited in Gubman, 1998) or Porter's generic strategies (Wheelen and Hunger, 2010):
Operational efficiency or Cost Leadership - low-cost, reliable and easy to use products and services
Product Leadership or Differentiation - leading edge products
Customer Intimacy or Focus - Highly customised or bespoke solutions
Business strategy also defines which markets the company chooses to compete.
Functional/Operational Strategy: This refers to the approach and activities by the functional areas (e.g. Marketing, Human Resource, Information Technology (IT), and Finance) of the business to utilise resources in order to achieve the business strategy and thus the corporate strategy (Wheelen and Hunger, 2010). These resources could be financial, physical, people e.t.c. The focus in this paper is on people/human resource. Figure 1 illustrates the hierarchical relationship of the three strategies.
Figure : Hierarchy of Strategy
Adapted from: Wheelen and Hunger, 2010: 68
2.2 HR and Strategy
The HR function permeates all levels of the business based on people being the implementers of strategy whether it is in production, R & D, operations, marketing, finance or even HR itself. It is thus imperative that HR strategy be thoroughly aligned with the strategies of all the functional areas, the business and the corporate strategy.
Always on Time
Marked to Standard
Figure 2 is the author's illustration of this fit and is used to show the complexity of the HR function and how it must of necessity work hand in hand with management and every other functional area of the organisation.
Figure : Support function of Human Resources in an organisation
It therefore follows that the knowledge and experience of the people in an organisation can be the critical success factors enabling the success or the failure of its strategy (Kevan Scholes cited in Leopold et al, 2005). Sartain and Finney 2003, posit that people are the drivers of business success. These people have to be the right people, in the right roles, at the right time (Chambers et al., 1998). This is the basis for what is now termed Talent Management concerned with recruiting, developing and retaining talent. Employer branding is a key component of talent management .It is the means by which organisations seek to attract and retain talent.
2.3 Talent Management: The Precursor to Employer Branding
Talent management has its foundation in the resource based view of the firm (RBV) which reasons that firms gain considerable competitive advantage by exploiting resources which are i) valuable; ii) rare; iii) inimitable and iv) non-substitutable (Torrington et al, 2005). RBV goes further to identify human resource with its attendant skills, competencies and capacities as the only resource able to fulfil these characteristics. Other resources e.g. Financial - may be valuable but are not rare as anybody can get funding and assets can be bought or even leased. Therefore, the more superior the human resource (talent) an organisation employs, the greater is the overall competitive advantage regardless of its strategic posture.
Clearly, organisations need to attract and retain the talent they require for success and thus require a mechanism to do this. Much has been said recently about a shortage of talent and how this has activated a war famously referred to as 'the war for talent' (Chambers et al. 1998). The increasingly difficult challenges faced by employers have been attributed to this war for talent. Peter Cappelli (2005) however, argues that these challenges have more to do with changes in employment relationships than a shortage of talent. EB addresses this relationship and can be used to both define and refine it. Organisations need to communicate the reasons why people should work for them i.e. they need to position themselves as an 'employer of choice'. This positioning is the remit of employer branding.
Employer Branding: What it is; what it is not!
The Chartered Institute of Personnel and Development (CIPD) (2010) defines an employer brand as:Â '...a set of attributes and qualities - often intangible - that makes an organisation distinctive, promises a particular kind of employment experience, and appeals to those people who will thrive and perform best in its culture'. It also states that: 'Employer branding describes how an organisation markets what it has to offer to potential and existing employees'. EB is widely believed to succeed better in tandem with marketing due to their established expertise in branding. In marketing, branding is used for products and services as a positioning tool to create value for customers and to in turn build customer relationships which will be mutually beneficial for all involved. In employer branding, the employees (both current and potential) are the customers and the organisation (employer) is the product or service on offer. Tsui and Wu (2005) term it the mutual investment approach to managing people. They advice that it is important that employers communicate both what they are offering (the promise) as well as their expectations from employees.
Rosethorn and Mensink (2010) state that a brand offers a promise which the consumer buys and the satisfaction (or not) derived from that promise informs the consumer's loyalty to the brand. It is therefore an internal and external 'statement' of what an organisation offers to and expects in return from employees. It however goes beyond that, as the evidence of this promise being kept has to be visible to all.
Due to the large amount of marketing effort involved, there is a danger of the communication simply being 'marketing spin' or communication on how the organisation would like to be and offer and not what it actually is or can offer. EB has to permeate the very core of the organisation in shaping its corporate brand identity, image and reputation. The communication needs to resonate from the inside out and not just from marketing efforts. The organisation needs to be seen to be living the brand promise. There is no use communicating that an organisation gives great benefits to its people if the people in the organisation do not feel so and will thus communicate otherwise. For this reason, certain elements are crucial in EB for its success.
Important Elements in Employer Branding
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Gubman (1998) gives a good illustration of EB in practice by The Marriot Corporation. In the highly constrained hotel business, Marriot analysed its requirement to build a low-wage workforce made up predominantly of immigrants struggling with the American culture, approach to work and the English language. Marriot addressed this by offering English language classes, day care centres, social service referrals and a host of initiatives that addressed the needs of this segment of people. This example will be used to illustrate the important elements in EB.
4.1 Strategy Identification
There needs to be a clear corporate and business strategy for HR to run with. It needs to be communicated at all levels of the organisation. The mission and vision statements of most organisations would suffice. Some however have a different employment value statement.
Marriott's careers website: 'Find your world'. Employees are referred to as Associates.
Waitrose states on their careers site that the purpose of their business is to make their employees happy. Employees are partners (Waitrose website)
4.2 Identification of People Requirement
Pertinent questions here include: 'what kind of talent do we require in order to deliver this strategy?', 'what kind of organisational behaviour do we require to excel?' Do we need innovators? Are we quick to respond to customer queries? This is linked to the specific skills, behaviour, capabilities and competencies required at all levels of the organisation. It is here that the culture, beliefs and values of the organisation will be defined.
For Marriot it includes exceptional customer service.
4.3 Identification of Employee (Potential and Current) Needs
This needs to include fears, goals and aspirations. What is on their minds? What is in their hearts? In marketing, this is called segmenting. The underlying premise here is that the organisation cannot be all things to all people (Rosethorn, 2010). They are therefore able to concentrate their efforts where it matters and are thus focused.
Marriot identified a segment of talent they required having similar social needs.
4.4 Evaluate Organisational Resources and Capabilities
Here the organisation evaluates what it can or cannot offer with a view to addressing the identified needs of the talent they are seeking to attract. These need to address functional (type of work), economic and psychological needs (Martin, 2010).
4.5 Define the Employment Relationship (Organisational Design)
This is where there is a matching of what the organisation is able to offer with the identified needs in order to come up with the 'value proposition'. It may require not only restructuring the entire organisation, formulating the processes and policies that will deliver the plan but may also require a culture change.
The value proposition and the expectations from employees need to be communicated both internally and externally: Internally because current employees will be the biggest form of promotion of the brand equity and externally in order to attract the required talent. Figure 3 is a diagrammatic representation of this process.
Figure : Employer Branding Process
Critical Success Factors
5.1 Executive and Employee Input
Clearly, this is not an initiative that HR will succeed in by going it alone because it usually requires a change in not only organisational structure but also culture. It requires executive buy-in and commitment as well as that of the employees who will be the brand champions and who have a deeper understanding of how some of the initiatives can be successfully implemented. Sartain and Finney (2003: p110) state that: 'employee referrals are the most valuable source of talent'. They cite Yahoo! as an example stating that half of the employees came in through personal introduction by existing employees. Many of the strong employer brands are those whose employees are regarded as co-creators of value and are usually not referred to as staff but partners, associates e.t.c. Apple uses such terms as Genius and Creatives (Apple website 2010).
Clearly to attract key talent there needs to be a clear differentiation from competitors. This answers the question: what makes an organisation a better employer than the competition? It is what distinguishes the employee value proposition (EVP) from any other.
The initiatives must be written down for continuity and for clarity. It will also provide a launch pad for the metrics of measurement and ensure there is a focus. The EVP should be clear and may be communicated by a simple brand statement e.g. Apple - 'Part career, Part revolution' (Apple website 2010)
5.4 Communication and Commitment
As stated before, communication is key to the success of employer branding. The message should be consistent and represent real value to the intended targets. It also needs to be reflected in every facet of the organisation. This is where commitment comes in .The company needs to deliver what it promises. For example, a company, which communicates a work-life balance ethos, cannot afford not to have a favourable policy for pregnant and nursing mothers.
Rosethorn and Mensink (2010) state that any approach will be unmanageable if cannot be measured. Several metrics can be used to measure the effectiveness of EB. Jenner and Taylor (2010) posit that EB will lead to an increase in employee opinion surveys and market research on what exactly employees expect from their employment experiences. This will aid the segmentation process and in measuring performance. Other measurement metrics that may be used include retention rates, turnover rates, yield on offers made and cost of recruitment.
Employer Branding: Attracting and Retaining Talent
6.1 Attracting Talent - Focus: Recruitment
The underlying premise here is that EB aids recognition of the kind of talent to be attracted. This will happen so long as the communication is efficient and unmistakable regardless of the form of promotion or advertising used. One easy way to do this is in linking the organisations' mission to a cause that employees can identify with and thus embrace passionately (Sartain and Finney, 2003). Another good practice is by peer recruiting or work team interviewing to allow applicants access to and interact with prospective colleagues. This will further help give them a realistic and accurate picture of what the brand promise means in the organisation and the level of contribution required from them. Recruits will have no illusions as to what the organisation is offering and what is required from them.
6.2 Engaging, Developing and Retaining Talent - Focus: Performance Management
The alignment of values will aid the organisation in tailoring engagement policies and processes for continual development and motivation of talent especially where segmentation approaches and specific employer value propositions have been applied. Much work still needs to be done on metrics to measure the effect of EB on organisational and individual performance (Martin, 2010). Some of the current metrics used for individuals include employee attitudinal surveys, rate of innovation and forced rankings.
Critical Evaluation: Employer Branding
Barrow and Mosley (2006) are convinced EB is here to stay for three underlying reasons:
The recognition by organisations that they cannot take the loyalty and commitment of their employees for granted causing them to take a more strategic and focused stance on how to attract and retain them given that valued employees have choices : to join, to engage, to commit or even to stay or disengage.
EB forms a bridge between internal (an HR remit) and external (a marketing remit) communications causing both functions to work closer together to build an even stronger image for the organisation that accurately reflects their identity.
Brand management has proven lasting value in the marketplace. EB draws on this discipline in its primary aim to drive and sustain employee commitment and loyalty and to date is the only discipline that has been effective in this regard.
There are however still some areas to explore:
EB is based on aligning values. Organisational values have been known to change based on the ever dynamic macro-environment. Human values are even more fickle and have been known to change over time in tandem with variables like age, emergent technology, changes in the macro environment and even personality. EB is built on assumptions that human values can be easily identified and people can be grouped into segments based on similar values. There is also the fact that a potential employee has to be certain on his or her values in order to assess if the values of the organisation can be aligned with them. No evidence was found to suggest that this is currently the case.
This myriad of values makes employer branding onerous. Questions arising include: How easy is it to determine what people are seeking from their employment experience given the constant changing of these needs? How will organisations position themselves to continually meet these changing needs?
In addition, how possible is it to get talent to stick to legal and ethical practices? Case in point being Bert Spector's (cited in Martin, 2010) assertion that EB policies were the unindicted co-conspirators in Enron's demise.
There are also some identified pitfalls the most common being over-branding and the creation of unrealistic expectations (Jenner and Taylor, 2010) raising other questions like whether EB is creating an entitlement culture that eventually becomes unattainable for the organisation (Lawrence, 2007).
All the evidence marshalled above points to the fact that Employer Branding is indeed the most advanced and sophisticated form of HR strategic thinking due to the complexities involved mainly from the 'people factor'. It does however offer considerable competitive advantage where properly implemented. The additional source of difficulty of the multi-faceted nature of its requirements e.g. close working with other functional areas of the organisation, makes the job of the Employer Brand Manager more difficult - difficult but very possible and with high value rewards attached where competently handled.