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The employer brand

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Abstract

This paper tests the application of brand management techniques to human resource management (HR). The context is set by defining the ‘Employer Brand’ concept and reviewing current HR concerns. Pilot qualitative research is reported with top executives of 27 UK companies, who were asked to reflect on their HR practices and the relevance of branding. This exploratory research indicates that marketing can indeed be applied to the employment situation. Bringing these functionally separate roles closer together would bring mutual benefit and lead to comparable performance measures, eg, trust and commitment. Strong corporate equity with the brand's customers can improve the return on HR, while at the same time improved HR can improve the return on brand equity from external customers. Formal, larger scale research would be required to substantiate the reciprocal benefits from a closer alignment of HR and marketing practices.
Final draft of Tim Ambler and Simon Barrow: “The Employer Brand,” Journal of Brand
Management, 4 (3 December), 1996, 185-206.
The Employer Brand
Annual reports frequently extol people as the company's most important resource, and/or its
brands as its greatest assets. Nurture both of these, and the bottom line should take care of
itself. We report research towards bringing these separate disciplines of human resources
(HR) and brand marketing into a single conceptual framework. On the one side the
employer can be seen as a brand with which the employee develops a closer relationship.
Employee, and thus corporate, performance will be influenced by awareness, positive
attitudes toward the “brand”, loyalty and trust that the “brand” is there for the employee.
Marketing, reciprocally, is moving to a greater recognition, e.g. relationship marketing, that
there should be greater people orientation and less exclusive focus on short-term
transactional economics. It is easier, cheaper and more profitable to keep existing customers
than recruit new ones1. Marketing essentially has the function of achieving corporate
objectives, typically profit, through meeting the customers’ own objectives. Substituting
“employees” for “customers” is perhaps a small step but not one, as we will see, currently
recognised by British industry.
The two goals should be mutually reinforcing: continuing good relationships between the
company and its customers necessarily involves the employees.
Following a discussion of relevant marketing concepts, we define the “Employer Brand
(EB). We note some current HR concerns which the EB concept might assist before
reporting the findings of qualitative research interviews with top executives of 27 UK
companies, who were asked to reflect on their HR practices. Whilst it is not currently part of
their HR thinking, most respondents found the EB concept helpful and relevant. In the
words of one leading retailer among the respondents, “if we have the best shops, with the
best people, then we have the best word of mouth and receive the best applications and then
we will have the best shops.” Figure 1, below, captures the virtuous circle we are seeking.
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Figure 1. Link between quality of employees and quality of product/service
Best people
Best shops
Best word
of mouth
Best applicants
We conclude with proposals for further research to substantiate the benefits, and identify the
disadvantages, from a closer integration of marketing and HR thinking and practices. We
expect that there will be considerable variation in the optimal mix between industries and
companies. The research needs to show not just the general picture but how companies can
select the mix of HR and brand disciplines most appropriate to their circumstances.
1. Defining the Employer Brand
Berry1 defined relationship marketing as “attracting, maintaining and - in multi-service
organisations - enhancing customer relationships”. Kotler2 shifted from his traditional
microeconomic orientation to seeing the marketplace as a “network of value laden
relationships”.
Kotler and Armstrong3 see relationship marketing as reflecting the goal to deliver long-term
value to customers, and the key measure of success as long-term customer satisfaction. The
importance of supplier/customer relationships increases as a function of profit margins and
the number of customers. A myriad of buyers in a low margin business such as a supermarket
would not make for partnership in the sense that McKinsey has with its clients. The
Employer Brand concept as having most application in high valued added, service businesses:
the higher the salaries and the fewer the number of employees, the more each employee
relationship with the employer matters.
Relationship marketing marks a shift, in principle, away from exclusive short-term economic
concern with immediate transactions toward long term building of brand equity which
Ambler4 has expressed in relational terms. In practice, there is constant tension between
short- and long-term considerations. Feldwick5 has questioned whether we need the brand
equity concept at all. He is right that the literature is confused. He is also right that the
value of an asset should be distinguished from the asset itself. Thus if we use, for the
moment, a neutral term, “XXX”, for the intangible asset which good marketing creates, the
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financial valuation of XXX is not the same as XXX. Nor is any other set of measures of
XXX the same as XXX.
In Feldwick’s analysis, marketing performance needs to be measured by a combination of
current performance, diagnosis of current trends, the brand’s chances of future profits and,
perhaps, a valuation of the brand’s current worth. In the accounting model, that translates
into the current performance and the state of XXX, or perhaps the change in XXX since the
start of the period. In all the confusion, there is a loose, but not consensual, drift towards
“brand equity” being the least bad label for XXX. The 1991 Marketing Science Institute
working paper6 is, to some extent, an imprimatur. Whilst shared language might make
marketing a little easier, progress requires challenge to accepted thinking. The implicit
question is whether “equity” adds anything to “brand”.
The thinking behind branding is far from new. San Bernardino of Siena7, the medieval
theologian, was amongst those who discussed markets, marketing and fair pricing. He
summarised consumer benefits from the goods/services purchased as virtuositas (function),
raritas (scarcity or market price) and complacibilitas (psychological benefits).
These three basic properties are unchanged today. Aaker8 expresses the value of branding to
the customer as interpreting/processing of information, confidence in the purchase decision
and use satisfaction
The functional benefit – virtuositasof a spade is not the quality of the spade but what the
spade will do for us, e.g. help us dig better. The economic benefitraritas – is not just the
price of a product but how good a deal it represents. Finally, the psychological benefit
complacibilitas – is not just image but how much it enhances our feeling of well being. A
diamond ring may do more for the feelings of both the purchaser and the recipient than can
be measured by economic or functional benefits or any ‘image’.
The distinction between brand and product was summarised by King9: "a product is
something that is made in a factory; a brand is something that is bought by a customer". In
other words, the product comprises the functional benefits and the consumer buys a holistic
package of benefits, including the economic and psychological - notably satisfaction.
Gardner and Levy, as well as King, note that a brand has a ‘personality’ from the consumer’s
point of view. This is echoed by Kosnik’s10 emphasis on the trustworthiness of brands. His
‘CRUD’ test assesses the extent to which brands are Credible, Unique, Reliable and Durable.
The brand-as-person concept is essential to understanding the relationship between
employers and their staff. In the late 80s, employees ceased to see IBM as trustworthy11.
The personality of IBM had become self-centred and stodgy.
We define “Employer Brand” as “the package of functional, economic, and psychological
benefits provided by employment, and identified with the employing company”. The ongoing
company/employee relationship provides a series of exchanges of mutual benefit, and is an
integral part of the company’s total business network.
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The benefits the Employer Brand (EB) offers employees parallel those that a conventional
(product) brand offers to consumers: (1) developmental and/or useful activities (functional);
(2) material or monetary rewards (economic); and (3) feelings such as belonging, direction
and purpose (psychological). The EB also has a personality, and may be positioned in much
the same way as a product brand. Accordingly, traditional marketing techniques, particularly
research, should be, mutatis mutandis, applicable.
Where the company brand and the consumer brand are the same brand (e.g. Shell), the EB is
also the same. Its personality vis a vis the consumer should be consistent with its personality
as seen by other parts of its business network, e.g. its employees, if it is to be trusted. If an
employer has many consumer brands and does not market a consumer brand under the
company name, e.g. Unilever, then the EB becomes, in this perspective, simply another
brand being marketed to a distinct segment, namely, the employees. As for any other
brand12, the value of the EB depends on the importance “customers” (in this case employees)
assign to benefits the company is able to deliver and its differentiation.
We can now revert to the question of whether a brand, or the EB, needs the addition of
“equity” when discussing it as a corporate asset.
Consider a new brand: NB. At the time it is launched it has no XXX (as above, the
intangible asset created by good brand marketing) in the sense that any measurement,
financial or otherwise, of XXX is zero: no awareness, no loyalty, no penetration, no market
share etc. Three years later, suppose NB is a great success. NB is exactly the same and its
marketers dare not change it. NB has now acquired significant market share, a premium
price, high awareness and loyalty and positive attitudes. XXX, in other words, has changed
but NB has not. It follows that we need a label to distinguish the brand asset from the brand
itself: “equity” will do nicely.
Employer brand equity is therefore the intangible asset in the minds of existing and potential
employees which has been built up by good marketing and HR practices. It can be
measured, just as any other brand equity can, and valued. The sale of a company involves
the transfer of employee brand equity which may be raised or diminished by that sale similarly
to the consequences of the sale of a product brand.
Before considering some current HR concerns, we review concepts similar to EB to establish
whether EB adds anything or whether we are merely relabelling existing ideas.
2. Does the Employer Brand concept add anything?
There are three main groups of concepts which are similar to the EB:
Corporate culture and identity;
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Internal marketing; and
Corporate reputation.
After reviewing these in turn, we will show why the EB concept adds value.
Culture
Olins13 has also suggested that HR techniques increasingly resemble those of traditional
marketing and that both these promotional activities concern the identity of the corporation.
It might therefore be sensible to bring them together. Whilst Olins is concerned with
corporate identity, such visual imagery should represent the underlying reality of the
organisational culture.
The organisation’s “culture” may be defined (Lipton) as the values that support the
organisational purpose and strategy or corporate identity. Indeed, Mills suggests that the
collapse of IBM in the 80s and early 90s was due to two failures of commitment (to its
customers and its employees). By damaging the loyalty of employees, they damaged
customer satisfaction. Using McKinsey research on mid-size, high growth firms, Clifford
argues that the active management of culture is a primary driver of success14.
An improvement in employee motivation should lead to improved employee performance
which should, in turn, lead to improved customer relationships and thus strengthened brand
equity which should have an impact on motivation, completing a virtuous circle. Companies
with strong customer relationships and brand equity tend to be characterised both by positive
employee relationships and superior long-term performance15. The importance of culture is
very clear; the issue is how it can be proactively managed.
Internal Marketing
The literature on “internal marketing” does not make the direct brand/employee management
comparison. Internal marketing (IM) is defined asmarketing to employees of an
organisation to ensure that they are effectively carrying out desired programs and policies” in
the American Marketing Association’s dictionary. Some will reject this somewhat
manipulative understanding of marketing and employee relationships. Kotler defines IM as
“the task of successfully hiring, training, and motivating able employees to serve the
customer well”; still somewhat uni-directional16.
IM has been widely noted, mostly in the context of services marketing, but not seriously
researched17. Foreman and Money classify IM into a 2x2 matrix based on who does the IM
and to whom it is done: the entire organisation or a specific department - see Figure 2.
Figure 2: Classification of Internal Marketing
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Internal marketing done BY
Department Whole organisation
Internal marketing done TO
Department Type I Type II
Whole organisation Type III Type IV
Type IV IM (the whole organisation applying IM to itself) is the variant closest to the theme
of this paper. It is also furthest from the populist view of IM being merely the means by
which the marketing department persuades the rest of the organisation to do what it wants.
Gronroos18 sees IM as type IV. Every individual (employee) should be treated as a customer
and every customer as a member of the company.
Hutt19 applies relationship marketing to IM in the Type III sense (the marketing department
applying it to the rest of the organisation). The marketer is the internal protagonist of the
end customer: “to effectively serve as the advocate for the consumer at various levels of the
hierarchy and across functions, the marketing manager must initiate, develop, nurture, and
sustain a network of relationships with multiple constituencies within the firm.” (p356).
Foreman and Money distil type IV IM into three factors: employee development, rewards
and a vision in which employees can believe. They have difficulty, however, in distinguishing
IM from good HR practices partly because the extent to which employees should be truly
involved in decision-making has yet to be formalised and will vary from organisation to
organisation. The three types of internal marketing benefits they extracted were, for
comparison, employee development (function), rewards (money/economic benefits) and
vision/something to believe in (psychological benefits).
Corporate Reputation
Dowling20 includes a number of employer aspects in his work on developing the corporate
brand. His framework of alternative positioning themes and the factors affecting employees’
perceptions of corporate image and reputation are shown in Figures 3 and 4.
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Figure 3. Alternative Positioning Themes
Organisational Attributes
size
technology leadership
innovation
people (best employees)
flexibility (adaptable to customer requests)
Stakeholder benefits
rational appeals (based on organisational
attributes
psychological appeals (a consequence of
being associated with the organisation)
environment- oriented
community-orientated
Customer/stakeholder group
heavy, medium, light user
particular industry sectors
particular sized customers
Price
bargain
value (best price/performance)
prestige (high price - high quality)
Geographic
regional versus global scale
Competitors
market leadership (biggest market share)
challenger (firms which aspire to become the
market leader)
follower (forms which imitate the strategies of
leaders of challengers)
niche marketer (firms which serve parts of the
market where they avoid clashes with the
major firms)
exclusive club (the top 3, the top 6, bulge
bracket etc.)
Use/application
full or unrestricted range of products/services
level of relationship/commitment to customer
Source: Dowling (1994)
Figure 4. Factors affecting employees’ perception of corporate image and reputation
Organisational
Culture
CEO Leadership
Vision
Formal
company
Employee’s images
and reputation
of the company
Professional values
Industry image
Competitors’
activities
Publicity
Employees’ perceptions of customers’
and other external groups’ reputations
of the company
Advertising, product/
service quality and brands
Source: Dowling (1994)
The central box in Figure 4, labelled “Employees’ images and reputation of the company”,
represents an intangible asset for the company which needs to be nurtured if performance is
to be maximised. This is the Employer Brand equity in the minds of its employees, just as the
awareness of, attitudes and behaviours towards a product brand such as Shell is the brand
equity of Shell.
What does the EB concept add?
All these approaches share recognition of the importance of the intangible asset made up of
the relationships between the corporation and its employees, between employers and the
identity they present to the world. Clearly they have much in common. The EB concept
uniquely synthesises them into a single term which can be actively managed (as can IM) and
measured as Employer Brand equity (a development of IM). Culture, IM and reputation
overlap but essentially differentiate these from other corporate activities. EB recognises the
similarities between HR and regular (product) brand marketing thus permitting, in principle,
their functional skills to be used in each others’ areas.
Trust, for example, has been singled out as a key dynamic for firms in their relationships with
employees21, and is also the principal construct in relationship marketing22. Cruise O’Brien23
proposes that trust is “sustained by reputation. Reputation is developed on the basis of the
observation and assessment of consistent behaviour over time..... Reputation has three
important components in the context of the firm – competence, consistency and integrity.”
Figure 5 reproduces her analysis of trust into cognitive and affective components.
Figure 5. Assessing trust in an organisation
Cognitive (Rational)
Assessment of
Affective (Emotional)
Faith in
reliability care
competence concern
fairness openness
consistency support
Source: Cruise O’Brien (1994)
These same measures could be used equally to assess the external marketing performance
and the Employer Brand. Similar analysis would be required for the other key constructs of
brand equity: awareness, and attitudes such as commitment and behaviour. Brand equity
covers both existing employees and those who the employer would like to attract. Whilst one
would assume that all existing employees at least recognise their employer’s name, the word
has two dimensions: breadth (the proportion of the population having any recognition of the
name) and depth (the ease with which it does so)24. Thus awareness is part of the legitimate
measurement of brand equity even for employees.
Employers do not provide employee benefits altruistically any more than they provide
products to customers purely for customer satisfaction. Both are means to achieve their own
ends, typically shareholder gain. There is growing recognition that these ends are best served
by taking a long term view of customer relationships (relationship marketing) and, we
suggest, of employee relationships. The costs of recruiting the best people, training and
developing them can only be recovered if they stay long enough to make a return on that
investment.
We now turn to the HR side of the coin.
3. Some current HR concerns
Organisational learning, teamwork and speed of response are people factors that will, at least
in part, determine an organisation’s success. Without exception, the dominance and
coherence of culture [is] ...an essential quality of the excellent companies.” Pfeffer concurs:
“as other sources of competitive success have become less important, what remains as a
crucial, differentiating factor is the organisation, its employees and how they work.”25
Just as marketing is now widely seen as being too important to be left to marketers, so HR is
also too important to be left to the HR function alone line management must also take
direct responsibility. In this paper we will refer to HR in this wider, non-departmental, sense.
Recent downsizing headlines may have exaggerated the issue which is, by its nature cyclical.
Nevertheless automation has brought a continuing demand for workforces which are smaller
but better. Higher skills and educational levels are needed, as well as greater commitment,
flexibility and stability. We examine these concerns in greater detail below.
Low skill and education level in the workforce
Figure 6 shows that 26% of the UK’s 1994 population was qualified to NVQ - 2 or -3
compared with 49% and 55% for France and Germany respectively. NVQ-2 and -3 are
equivalent to at least 5 GCSEs at Grade C and 1.5 A-levels respectively. The position is
similar for new entrants though the continually rising proportion of A-level passes, now 86%,
indicates that this gap will close. The UK target for 2000 is to reach Germany’s 1994 NVQ-
3. To catch up, the UK will require radical improvement in the education of those entering
the workforce, combined with much better training for those already in work. This, in turn,
is a long-term process which requires commitment and motivation by both employers and
employees26.
Figure 6. Comparative qualifications in 1994
UK France Germany
Proportion of total
population qualified
to level:
NVQ-2 15 35 8
NVQ-3 11 14 47
Proportion of new
entrants qualified to
level:
NVQ-2 17 37 5
NVQ-3 13 15 62
Source: Skills Audit, 1996, figs. A8.16, A8.17.
Low employee commitment
Today’s best employees, like today’s customers, know they are in demand. They require
respect as individuals, understanding of their own career goals, training and the mentoring to
achieve them. More is required from employees in terms of responsibility, long hours of
work and good inter-personal as well as technical skills. However, employee commitment is
variable (Figure 7).
Figure 7. Employee commitment in different industry sectors
Research company
Hotel gr oup
Financial institution
Vehicle manufacturer
Airline
Other
23%
37%
26%
14%
23%
40%
20%
27%
20%
24%
32%
24%
19%
36%
20%
25%
18%
10%
30%
42%
7%
28%
34%
27%
Research company
Hotel gr oup
Financial institution
Vehicle manufacturer
Airline
Other
Entrenched Average Shallow Convertible
Source: Jamieson and Richards (1996)
The expressions “Entrenched”, “Average”, “Shallow” and “Convertible” are from Hofmeyr
who divided brand users into these four segments27. The first two are secure and unlikely to
change brand allegiance in the long and short term respectively. “Shallow” means that they
are likely to change but, unlike “Convertible”, not yet on the point of so doing.
Clearly the need for commitment varies by type of industry and role within the company.
Jamieson and Richards28 cite the case of one major bank in which customer and employee
commitment were measured across the company’s regional branches. Figure 8 shows
markedly higher customer than employee commitment levels. The authors believed this case
to be representative.
Figure 8. Commitment levels of customers vs. employees in a representative case study
Customers
Employ ees
25%
30%
29%
16%
18%
25%
36%
21%
Customers
Employ ees
Entrenched Average Shallow Convertible
Source: Jamieson and Richards (1996)
As might be expected, commitment levels rise with seniority, as shown in Figure. Low
commitment among customer-contact staff has clear implications for customer service
levels29, and it is in this area that proactive management of an organisation’s Employer
Brand could potentially have the greatest positive impact.
Figure 9. Employee commitment by job type
Manual/Clerical
Technical/Prof essional
Supervisory
Management
25%
41%
22%
10%
22%
36%
23%
17%
22%
36%
23%
19%
16%
27%
26%
30%
Manual/Clerical
Technical/Prof essional
Supervisory
Management
Entrenched Average Shallow Convertible
Source: Jamieson and Richards (1996)
HR Summary
Many UK organisations are faced with the need to achieve ever higher quality standards in
their products and/or services. They rely on their employees to deliver these improvements,
and compete with each other for the best talent. At the same time, skills levels are not
increasing to the level of, for example, Germany. Employee commitment is variable, and
may well be lower that that of customers. These factors are unlikely to be of equal concern
to all companies. High customer-contact, high employee-value-added businesses, such as
consultancy, would be more likely to be affected by culture and employee morale, than those
where labour is little more than manual dexterity. As developed economies shift inexorably
from the production of goods to services, and greater value-added services, we see these
concepts as becoming more important.
4. Methodology
This exploratory research took the form of semi-structured depth interviews with
respondents from 27 companies in a variety of industry sectors, mostly services. The
companies are listed as Appendix A and include consultants, financial services, retail,
communications, alcoholic drinks, pharmaceuticals and footwear. The respondents were a
convenience sample of clients and contacts of People in Business, a London-based
management consultancy.
Statistical considerations were not a factor in this qualitative study. The objectives were to:
Ascertain each company’s overall approach to these issues; and
Gauge the reaction to the EB as an integrating (HR with marketing) framework.
The discussion guide for the interviews is attached as Appendix B and covers (1) the
existence of the EB, and its components; (2) the importance of the EB to the company, and
its influence over HR policy; (3) positioning of the EB; (4) measurement of employee
relationships; and (5) the main obstacles to developing the company’s reputation as an
employer.
These headings were used only to provide the structure for the interviewers and were not
read out to respondents. The interviewers were briefed not to introduce the Employer Brand
phrase but to use, in the blank spaces, whatever was the closest term already in that
employer’s lexicon. In other words, the introduction to the interviews sought to identify, and
then, adopt whatever language the respondent already used for this topic. In the event, firms
did not seem to have their own language for this concept and “Employer Brand” was quickly
adopted.
The respondents were mostly at the level of functional department head, with responsibilities
encompassing human resources, marketing, and/or internal communication. While largely
familiar with marketing concepts, respondents found their application to HR novel and
sometimes uncomfortable. Some warmed to the Employer Brand concept as they thought
about it, and some did not.
We have sought to avoid putting too much weight on individual comments. As noted above,
we not seeking to test hypotheses, but to establish the range of responses. The views of
individual respondents will not always be representative of their companies and the
companies may not represent UK employers as a whole. For example, these four statements
all come from the same company in the service sector:
“People in the organisation do not believe in the company’s stated values they are
just an empty statement from top management.”
“Our values are the driver of our business, everybody follows them and they are
embedded in our people.”
“We have a lot of turf wars – it is because board members themselves only work as a
team about 20% of their time – they take care of their own business, not of the company
as a whole.”
“We must practise what we preach, otherwise it could be dangerous.”
Language was an issue. The Employer Brand is not currently part of the thinking of HR and
communications professionals, though they were familiar with marketing language in general.
Clearly, the introduction of marketing language to these interviews coloured the ensuing
discussion. On the other, there is no recognised common language available today to cover a
company’s identity, culture, brand and reputation as an employer.
This methodology was designed to be exploratory: we were not seeking to prove the case for
the EB concept but to test the water of its acceptability30.
4. Findings
Only limited evidence was found of attempts to manage the employment experience as a
whole. Managing any integrated process, including the Employer Brand, is cross-functional
and therefore politically delicate. In order to be managed coherently and holistically the
Employer Brand would need to be championed by a senior management figure.
We now turn to the experience and views of our respondents, with an emphasis on allowing
respondents’ comments to speak for themselves. Findings are presented under the following
headings:
4.1 The Employer Brand – its significance to employers
4.2 Managing and measuring the Employer Brand
4.3 Obstacles to developing the Employer Brand
4.1 The Employer Brand – its significance to employers
Most respondents seemed to associate the Employer Brand closely with corporate culture,
and were not always clear as to the boundary between the two concepts. The items
identified most consistently as key components of the Employer Brand concept were
awareness and psychological benefits.
Most respondents also recognised the importance of the Employer Brand concept, although
only in a vague way, with low priority. Other pressures and needs were given higher priority.
“We are doing very little (nothing) to promote an Employer Brand within the firm. It is
something we need to work on, but I have more pressing issues.”
“Frankly we have so much to do at the moment with the merger that we just want to get
the basics right. An Employer Brand concept is nice, but not essential.”
However, many of the respondents also recognised the de-facto implicit existence of the
concept, and the importance and potential of the Employer Brand if managed well.
“Certainly this branding concept exists. It is a function of the benefits we can offer.”
“Your questions have certainly triggered something, and I think I will work with the idea
in the future.”
“An Employer Brand should be connected to the value system in the company and could
create a substantial competitive advantage.”
Corporate culture and reputation emerge over time regardless of whether they are actively
managed, and underlie corporate identity. Corporate culture and reputation are firmly
embedded in management thinking, and there some resistance to recognising the Employer
Brand as a separate and distinct concept.
“Corporate culture is a bit like an elephant – you know it when you see it. Cultures are
not necessarily terribly capable of definition. People understand them and can talk
about them, but it’s quite difficult to label them in the way that you can put a label on a
brand. You can’t impose culture on different brands.”
“The Employer Brand is so intertwined with culture that I find it hard to separate
them.
“The Employer Brand concept reflects the culture. Do you really want to distinguish
between them?”
“Our Employer Brand is probably not that strong; we have a high turnover rate, partly
because today our culture is not well articulated.”
“The Employer Brand must be consistent with the consumer brand, which is the pillar
and the values of the corporation.”
Corporate performance was identified by a number of respondents as a key prerequisite for a
strong Employer Brand.
“Performance and reputation are important – you must be successful as a business in
order to have a good Employer Brand – you have to perform.
“It is difficult for us to build our Employer Brand, because we have not had good
performance during a couple of years.”
External and internal perceptions can differ vastly:
“I’m not sure whether we have a strong Employer Brand... We are perceived as being an
interesting, dynamic, progressive corporation – external surveys show that 99% of the
people think we are great. However, our internal surveys show that only 14 % of our
employees are happy working here!
Respondents singled out awareness and psychological benefits as the foremost aspects of
Employer Brand in terms of enabling a company to recruit, retain and motivate the best
people. This thinking, however, did not necessarily extend to a recognition that the
employment experience as a whole – including but going beyond the recruitment experience
– needed to be managed in a coherent and holistic fashion.
Awareness was identified as a key factor in recruiting the calibre of applicants desired. This
was seen to be closely linked with the company’s performance, market position, reputation
and product brand(s).
“There is not that much difference between us and the competition in the way we go
about our business, but everyone applies to us first because of our reputation.”
“People come to us because they have heard about us – the CLUB feeling is great.”
”We wanted to hire 30 graduates and got 2000 applicants! People are very much aware
of us and find our company very attractive to work for.”
“We have a great name in the UK, but when we go overseas it is different, nobody
knows who we are.”
“People join our organisation because we are number one.
In addition to awareness, the psychological benefits of a strong Employer Brand were
considered to be a key aspect of the concept. This was in part, again, linked to elements that
derive from performance, market position and general corporate reputation. Factors
identified included the prestige and standing of a company, the feel-good factor of its ‘name
value’, the culture and lifestyle it offers, and the sense of job satisfaction and security it
provides.
“People stay because not just because they have a very good remuneration package, but
because the name looks good on the CV.”
“People are honoured to be working for our company, you almost feel invited.”
“Our employees are not motivated primarily by money, but more by the psychological
rewards.”
“We hire from other multinationals for local staff. When there just aren’t enough good
people to go around, as is the case here at the moment, there is a value to employees
above money associated with future prospects, lifestyle and – perhaps most importantly
– status.”
“We are perceived to be a safe employer, we used to be a part of the public sector, that
is why people stay”
4.2 Measuring and managing the Employer Brand
Many of the respondents identified the HR function as the most suitable department for
managing the Employer Brand, provided that it was linked closely to the Chief Executive. In
the words of two respondents, HR would be in a good position to take on this role in their
firms because:
“HR is a part of the senior management team in each of the divisions, and it is also a
part of the Executive Committee. We recognise that we are responsible for coaching
line managers.”
“We have a very decentralised organisation where we [HR] support the efforts of
managers. The Employer Brand should be created by middle managers and spread by
them throughout the organisation.
Others saw Employer Brand management as a cross-functional task involving senior
management as well as the HR, marketing, and corporate communication functions. In many
cases, a clear view on the locus of, and approach to, responsibility for Employer Brand
management had yet to emerge.
“To what extent should the Employer Brand be led by the customer end of the business
and to what extent should it be directed by the top of the organisation?”
None of the respondents’ companies explicitly managed the Employer Brand as such.
However, a number of the participating companies had similar implicit understanding linked
with HR practices and career prospects.
“We have rigorous recruitment to find the best people, we give them on the job training
and great opportunities for career development – they know that and we don’t advertise
it.”
“For our top managers we offer career prospects and general management experience
early. We have a great brand name as a company.
Some recognised that the Employer Brand does need to be measured and managed.
“Is Employer Brand worth measuring? It is like asking – do you love your wife”
With HR identified as the most appropriate leader of the cross-functional task of Employer
Brand management, it is not surprising that comments on measurement tended to focus on
HR activity. Benchmarking and internal surveys were the most commonly cited ways to
measure the various components of HR activity, including recruitment, training and
development, rewards, and performance management.
“We make sure that our remuneration, training etc. is among the best in the industry –
that is necessary if you want to attract the best people. We also have a personal
development plan for each employee.”
“We have monthly reviews, and we benchmark.”
The second main tool for measuring the HR function appears to be the internal survey.
“We are doing internal surveys every two years, and external surveys too. They both
indicate that the company is perceived as a great place to work”
Respondents were frank about approaches to HR and people management which seem to be
less than systematic. Internal surveys were not always followed through.
“We don’t measure the HR performance – not yet but we will, given the amount of
customer complaints, absenteeism, and high turnover rates.
“Our internal surveys show that 60% of employees are not feeling informed, and 40%
are dissatisfied with their jobs.”
“Our slogan is ‘Be a reputable employer’ and we try, but the video doesn’t match the
audio about the culture and the perceptions there’s a gap between the messages
managers think they are communicating and what employees actually experience.”
Some respondents did think in terms of a number of standard marketing techniques,
including the need for segmentation, the use of pricing (rewards), and the importance of
professional communications.
Segmentation
“Our group comprises three quite different businesses, and each requires a different sort
of person.”
“Our group has a number of strongly branded businesses in their own right, although
within the group we would like to tie them into our group ideals.”
“We segment the market through our internal communication vehicles (e.g. the manager
magazine), which seek to develop the same themes but in different contexts, and targeted
at specific internal groups.
Pricing/rewards
Compensation packages and systems have long been the bedrock of HR activity but they can
also be seen as analogous to pricing products in the marketplace. The more attractive the
product, in functional and psychological terms, the higher the economic price that can still
provide user satisfaction. In the employment context, firms are well aware that higher
functional and psychological benefits permit greater flexibility in compensation packages.
“A change in the reward structure could be a factor in building a successful Employer
Brand.”
“People stay because they enjoy the personal recognition – and they receive good pay.”
The importance of professional communications
Internal newsletters and briefings are today commonplace. Employees, both current and
prospective, are also key targets for any external corporate advertising.
“We know that our communication must improve, but people are very sceptical – and
not necessarily just the high achievers.”
“Our management all go to fancy presentations courses – but they should instead learn
how to communicate with their people – internally.”
Relationship marketing
Some of the respondents saw the relationship with employees in terms similar to those of
relationship marketing, e.g. trust, commitment, shared values, and longevity of relationships.
“One of the lessons we have learned is that you must be up-front with people... people
are not fools.
“I guess the Employer Branding concept falls under the ‘style and shared values’
aspect of our strategy. It seems to fit into the themes of integrity, control ethos,
teamwork/collaboration and identification with the customer.”
“Our business involves very few lateral hires. We recruit our people from school – it’s
cradle to the grave.”
On the other hand, the relationship approach to the Employer Brand concept is far from
universal:
“In our industry, people are only as good as their last deal.”
4.3 Obstacles to developing the Employer Brand
Most of the respondents agreed that the concept of EB was interesting, although some held a
negative perception of marketing in general, as being “artificial and manipulative.”
“Employer brand is really just another gimmick, right? In my view these gimmicks are
just for incompetent managers.”
As noted above, a number of respondents’ companies were too short of time and/or
resources to devote much attention to developing their EBs. The awareness that, not unlike
consumer brands, an EB would take years of investment to build up, and yet still be
vulnerable to quick and crippling damage through some “bad incident”, induced some
wariness.
Some had deliberately avoided this path:
“We are not interested in building an Employer Brand; we have 100% staff turnover
p.a. It is only college kids that want to earn money to fund their studies.”
The main obstacles to the EB concept were seen as the lack of top level support and
understanding, internal politics and differences of perspective (mental models) and weak
development of the HR infrastructure.
Lack of top-level support and empathy
Due to its long-term nature, the Employer Brand approach requires top management
commitment to the concept, and especially empathy between top management, marketing
and HR mind-sets.
“The biggest obstacle for a successful Employer Brand is the lack of funding and buy-in
from top-management.
“Senior management does not address the issues that need action – they pick the flavour
of the month. During more than two years we have had the same issues come up as a
complaint in our internal surveys – but nothing is done.
“We are weak in converting our vision to action, there’s too much politics in the
organisation”
“There is a gap between our Executive Managers and the managers that are supposed
to execute what we are suggesting.”
Weak HR infrastructure
Equally, weaknesses in the existing HR infrastructure and communication channels were
perceived as significant obstacles, and a number of respondents voiced a reluctance to “build
a house on poor foundations.”
“Our reward and bonus structure is inconsistent – some employees have rewards linked
to targets and objectives, but others do not.”
“I feel we have a dodgy recruitment practice – we should tighten our recruitment policy
because we are not attracting good quality candidates.”
“An internal survey showed that only 60% of staff knew about the strategy ‘blue book’,
something that divisional managers were supposed to brief all their people about.”
These obstacles are substantial. Many competing claims are made for top management
attention and cross-functional alignment.
5. Further research
Internal marketing, of which the EB concept is a development, has not been widely
researched. The fundamental empirical question is whether firms using brand and marketing
disciplines in their HR functions achieve better performance. Conversely, do firms
employing best HR practice in their (relationship) marketing programmes do better?
We need to clarify the extent to which corporate culture can be and is being actively
managed in companies. The findings here indicate that its existence is recognised but the
tools to manage it do not exist. Issuing policy statements on values and culture has little
impact: what preoccupies top management, what they do and what they ask about, is very
influential.
Whether EB, internal marketing, corporate reputation and culture are different things, or
different labels for the same thing, is less important than the collective contribution they can
make to the achievement of corporate goals. Clearly the concepts overlap. What then
matters, assuming they do make a difference, is what management can do to enhance them.
We should research:
What, if any, active Employer Brand equity building programmes (under whatever name)
exist;
To what extent the programmes are formal (written down and agreed by the Board) or
informal;
How they correlate with subsequent performance;
How such programmes compare with their product marketing programmes; and
The involvement, if any, of HR managers in product marketing and the consequences for
those companies.
Empirically grounded evidence of success is more likely to lead to widespread adoption than
the conceptual framework we have established thus far. On the other hand, the purpose of
this paper was simply to test the water.
6. Conclusions
It would appear that the EB concept exists implicitly within some corporations, however
fuzzily. The underlying trend in responses indicated a spectrum of high applicability where
high skills and development were crucial, e.g. consulting companies and investment banks, to
lower relevance for large-scale industrial and manufacturing companies where employee
individuality is less conspicuous. This echoes Kotler and Armstrong31 who saw relationship
marketing as more relevant to situations of high profit margins and fewer customers, e.g.
consulting companies and investment banks.
The levels of sophistication of firms within the same general area of the spectrum differ
substantially. This exploratory research indicates that industry leaders, i.e. those with the
highest corporate brand equity, are more conscious of their company name or brand, both
explicitly in the external environment and implicitly in internal settings. Firms which follow
an implicit EB model seem to have a higher retention rate, particularly among their more
highly skilled people. In addition, these companies are able to attract the best candidates
more easily in the first place, as reflected in the attitudes and career choices of potential and
existing employees.
Overall, most respondents agreed that the EB concept is valuable in that it could bring the
discipline and theory of marketing into the HR function, particularly
putting the emphasis on getting the product, i.e. the whole employment experience, right;
consistency of brand experience (“video matching the audio”);
segmentation and umbrella branding;
using pricing/compensation benefits explicitly to balance functional or psychological
benefits;
the importance of professional communications; and
the techniques of relationship marketing.
This last point is of particular importance. We believe the principles of relationship marketing
could allow marketing and HR activities to share a common framework: the principles of
brand marketing can be applied, mutatis mutandis, to improving internal relationships and
thus corporate performance. Conversely, the principles of HR management can illumine
customer marketing activities. Similarly, the measures used to assess relationship marketing
performance (awareness, trust, commitment, other attitudes and behaviours) can be used for
HR, and vice versa.
The Marketing Council was created in the UK in 1995 because many leading companies
believed that marketing principles were not widely accepted in British companies. In that
context, it would be surprising indeed if the EB concept was welcomed by the respondents
on first acquaintance. Nevertheless, we did find both interest and, in some firms, enthusiasm
for the idea. Those firms with marketing cultures have little to lose from so implementing
the consequences. At the least, their HR and marketing functions will gain better
understanding of each other’s disciplines. Furthermore, the McKinsey study referenced
above32 would give grounds to believe that more intensive, active management of culture in
this way is associated with stronger growth.
“We have been implicitly thinking, now we have to be explicit to make things happen.”
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... Many firms have realized the importance of employer branding as they strive to attract, develop, and retain the best personnel. Employer branding must attract and communicate the attractive employee value proposition (EVP) they have created to both new and current employees [3]. Employer branding, like consumer marketing, has evolved to delivering emotional benefits to gain employee commitment. ...
... e application of marketing principles to human resource management has resulted in the concept of employer branding. Ambler and Barrow introduced the term employer brand to highlight the importance of organizations becoming more people-oriented [3]. Levy in his theory [12] divided the employer brand into functional factors (salary, benefits, promotion opportunities.) and symbolic factors (corporate status, reputation, corporate culture). ...
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From Transactions to Relationships to Networks', address to the Trustees of the Marketing Science Institute
  • Kotler
  • Philip
Kotler, Philip (1990) 'From Transactions to Relationships to Networks', address to the Trustees of the Marketing Science Institute, (November) reported in MSI Review, Spring, 1991.
De Evangelico Aeterno', quoted in (1991) 'Pioneers in
  • San Bernardino
  • Siena
San Bernardino of Siena (c. 1420) 'De Evangelico Aeterno', quoted in (1991) 'Pioneers in Economics 3: St. Thomas Aquinas', Blaug, Mark, (ed.) pp. 32-42, Edward Elgar Reference Collection, Brookfield, Ve rmont.
Developing New Brands
  • Stephen King
  • Pitman
  • London
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  • B Burleigh
  • Levy
  • J Sydney
King, Stephen (1973) 'Developing New Brands', Pitman, London. (10) Gardner, Burleigh B. and Levy, Sydney J. (1955) 'The Product and the Brand', Harvard Business Review, Marchi April.
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