Characteristics of Successful Employer Brands. Abstract

Characteristics of Successful Employer Brands Lara Moroko, Mark Uncles, University of New South Wales Abstract In the last decade, employer branding has been hailed as a key strategic marketing activity. This study examines the perceived characteristics of successful and unsuccessful employer brands. Information from an expert panel is analysed to uncover successful/unsuccessful employer brand characteristics and to establish areas of convergence and divergence with existing product and corporate branding literature. A typology of the characteristics is presented, the two dimensions of which are: attractive/unattractive and accurate/aspirational. The cells of this typology are linked to HR metrics of practical and theoretical interest. Introduction Employer Branding Success as a Strategic Lever Much has been made of employer branding (EB) in the last decade. EB is defined as the sum of a company s efforts to communicate to existing and prospective staff that it is a desirable place to work (Lloyd, 2002) or, more formally, as the package of functional, economic and psychological benefits provided by employment, and identified with the employing company (Ambler and Barrow, 1996). Practitioners have embraced EB as as a significant and important consideration (Wilcock, 2005). The demand for skilled, specialist, value-adding employees is likely to increase dramatically in the short to medium term, and at the same time the available supply of these employees has been reduced by demographic and other factors (such as the rapid growth of new industry sectors and economic regions) (Chambers et al, 1998; Ewing et al, 2002; Mahroum, 2000). OECD projections indicate that by 2050, 10 active workers will support an average of more than seven older, inactive people, compared with a ratio of four to 10 in 2000, for the same countries (Taylor, 2005). Identifying strategies to address this skill shortage has become imperative. For marketers, the impact of potential skill shortages poses a significant strategic challenge. The impact of employees on marketing and strategic business effectiveness has been understood for some time, particularly with respect to brand strategy and management. Employees have the ability to help build strong and enduring brand equity, particularly within the service brand context (McDonald, de Chernatony, and Harris, 2001; de Chernatony, Drury, and Segal-Horn 2003; King and Grace, 2005). Their ongoing personal contact with consumers gives employees a great deal of influence over the way in which consumers view companies and brands (Kennedy, 1977; Stuart, 1999; Dowling, 1994). Consequently, the need for strategies to attract and retain staff has never been more pressing (Cairncross, 2000). Cultivating an employer brand is one approach that firms (Siemens, Honeywell, Accenture, Coca-Cola Amatil, Deloitte, Roche, Australian Defence Force, Yahoo, Starbucks, for example) have chosen to secure and retain the most sought after employees; those who will enable them to perpetuate their brand success and secure ongoing profitability. Growing interest amongst marketing academics reflects the rise of EB as a competitive strategy. Marketing scholars have defined EB (Ambler and Barrow, 1996; Ewing et al, 2002), considered its functional and theoretical foundations (Ambler and Barrow, 1996, Backhaus and Tikoo, 2004) and examined employer brand attributes and positioning in practice (Ewing 1687

et al, 2002; Berthon, Ewing, and Hah, 2005; Freeman and Knox, 2006; Lievens and Highhouse, 2003; Backhaus, 2004). However, what constitutes employer branding success has not been definitively identified by academics (nor for that matter by practitioners) despite being a popular topic in management literature and trade journals (e.g., Simms, 2003; Buss, 2002; Barrow and Mosley; 2005). Research Question Characteristics of Successful Employer Brands It is tempting to adapt a definition of EB success from the broader branding literature and test this empirically. However, given the embryonic state of EB theory development we do not know which product/corporate brand success characteristics might apply or which other characteristics may be relevant. Employees experience the employer brand in a substantively different way to consumers experiencing product or corporate brands (e.g., employees are paid for their experience). Therefore, it is inadequate to rely solely on corporate and product brand theory to identify EB success characteristics. Consequently, this study uses expert practitioner perceptions of the characteristics of EB success as a starting point to bridge the current gap in our understanding and to add to the body of EB theory. By understanding what managers are consistently striving for when undertaking and evaluating EB strategies, it is possible to propose criteria for evaluating successful/unsuccessful employer brands. Accordingly, our key research question is: What are the perceived characteristics of successful and unsuccessful employer brands? Methodology A qualitative approach was taken to data collection and analysis, using an expert industry panel. This approach has been used successfully to gain practitioner perspectives for the advancement of theory (e.g., Ambler and Barrow, 1996; Nijssen and Agustin, 2005; Grove, Fisk and John, 2003). Seventeen depth interviews were conducted with thirteen senior industry participants. Based on a review of the existing EB literature, relevant areas of theory and specialist practice were identified (Ambler and Barrow, 1996; Backhaus and Tikoo, 2004), with the sampling frame of expert respondents purposively constructed to reflect the spectrum of pertinent theory (Strauss and Corbin, 1998). In addition to specialist EB consultants, data were collected from senior internal marketing, human resources, recruitment, marketing communications and brand strategy consultants and directors. Individual participants were selected based on their standing in their industry and their relevant experience. The interviews were semi-structured in nature. Each of the expert respondents was asked whether the terms successful and unsuccessful applied to EB. They were then asked to characterise successful and unsuccessful employer brands and give examples in practice to clarify and further explore their characterisations. Verbatim transcripts of the interviews and field notes were coded following the process outlined by Spiggle (1993). Common themes within the data were identified and were examined for similarity. The themes were then grouped by conceptual consistency to give the main constructs (characteristics) of the initial framework. These constructs were compared for the purpose of establishing possible interrelationships and assessed as a whole to arrive at the final framework. As a last step, and in the interest of adding to the robustness of the findings, member checking was undertaken with four of the initial expert respondents (Creswell, 1998), i.e. the draft findings of the analysis were discussed with the respondents to check for resonance 1688

Results Figure 1 shows a typology of EB success characteristics. There are two key dimensions of success characteristics: attractive/unattractive and accurate/aspirational. Figure 1. Typology of Employer Branding Success Characteristics The attractive (successful)/unattractive (unsuccessful) dimension was not surprising of itself; however, it was surprising that the characteristics underpinning this dimension were so strongly consistent with the extant product and corporate branding literature, namely that successful employer brands were: (a) Known and noticeable: There is a great body of work proclaiming the benefits of brand awareness (e.g., Keller, 1993; Hoyer and Brown, 1990; Holden, 1993). These benefits appear to operate similarly for employer brands. Successful employer brands were characterised as being known and noticeable in their market: In a supermarket aisle as you are going down with your trolley there are things on the shelf. Now if you are not looking for a particular product then you are just going to walk straight past that product and therefore the opportunity is lost for a customer to trial it. The same goes with EB Yes, you could sit there quietly and have your value proposition, have your people talking about what it is that you do as a business, internally If you don t have an external marketing plan then it s only half the job done (EB Consultant D) It s noticeable and known in the market place (Marketing Communications Consultant) The link between an employer brand being known and successful is supported in the broader literature. Collins and Stevens (2002) found that company-based attributes had greater impact on job seekers than role-specific attributes, and Cable and Turban (2003) assert that strong brand identity and positive reputation are important factors in attracting job applicants. (b) Relevant and resonant: A brand s value proposition and its relevance to customers can form the basis of a relationship between customers and the brand (Aaker, 1996). For employer brands, customers are existing and prospective employees, for whom a discrete value proposition applies. Successful employer brands are characterised as having a value proposition that is relevant to, and resonant with, their prospective and current employees: The company really knows what employees value, carry it through and communicate it effectively (EB Consultant C) [a bad employer brand is] just not thought through from a perspective of the prospective audience. It might comply with the corporate standards, it might tow the line perfectly with what the branding and the positioning and stuff is, but it s not translated into terms that a potential hire is interested in (Brand Identity Strategist) 1689

(c) Differentiated: The ability to differentiate brands has been linked to corporate and product brand health and ongoing success (Keller, 1993; Aaker, 1996; Kapferer, 2004) and is regarded as a key step in the brand building process (Agres, 1995). Chambers et al (1998) have suggested that having a differentiated employer brand is a core aspect in winning the war for talent. This was reflected in the data. [unsuccessful employer brands] are completely soulless and tell you nothing about the identity or character of the organization. There s no differentiation (Brand Strategist) it s a bad employer brand for me because it doesn t say what s unique about joining your company (EB Consultant E) You need to look at your emotional reasons why you are different and they can t qualify it (EB Consultant B discussing an unsuccessful employer brand) The second main dimension to emerge from the analysis was that of accurate (successful) versus aspirational (unsuccessful) employer brands. Among the many and varied definitions of brand is the notion of brands as a promise (Feldwick, 1991; Ind, 2004; Kapferer, 2004). The employer brand as an ongoing promise to employees was a very strong and recurrent theme across all the expert respondents. Successful employer brands were seen as being accurately portrayed though marketing communications and as consistently delivering on the inherent promise of the brand: It s honest - not just at the beginning, but for the whole employment lifecycle (EB Consultant A) The engagement has to equal the brand once employees have joined you (HR Strategy Director B). gives you an accurate idea of culture, so it attracts the right candidates (Brand Strategist) [a good employer brand] matches what your were sold (Internal Marketing Director) This view corresponds to research in the organisational behaviour literature on psychological contracts, or the individual beliefs in reciprocal obligations between employees and employers (Rousseau, 1990, p.389). Employees form a view of these reciprocal obligations during the recruitment process, based on explicit statements of the firm together with informal and perhaps imprecise information (e.g., from external recruiters, word of mouth, press, etc.). When the psychological contract is fulfilled, the employee is more likely to be engaged and loyal; however, if the contract is broken a fall in engagement and productivity can result, accompanied by a rise in staff turnover (Rousseau, 1990; Robinson and Morrison, 1995; Robinson and Rousseau, 1994). An accurate employer brand helps to inform the terms of reciprocal obligations in line with what the firm can realistically deliver and also helps to counter misleading or misguided information conveyed by sources external to the firm. EB Consultant D gave the example of recruitment promotion and an employer brand promise that was not supported by the processes of the firm or, consequently, by the employment experience: Here is a classic example of where [company] went We need to get graduates and we need to offer work life balance. So the HR department recruited graduates based on we will give you work life balance. No one told the managers or the senior managers that this was the new way of working The graduates started there and realised that My manger is still around at 7pm or 8pm. This isn t what was promised to me. Within 12 months, they had all gone...[company] were selling a promise they could never deliver 1690

This vignette demonstrates why the level of accuracy in brand communications for employer brands ought to be more rigorous than for other forms of branding. Product and corporate brands have an additional facet of brand image management that employer brands do not have, i.e. being able to maintain a distinction between front stage and back stage for the brand (Johns, 1999). There are aspects of corporate and product brands that are not commonly accessed by their target audience (e.g., production and management processes) that allow the brands to maintain aspects of mystique on which emotive associations can be built. The distance from which the brand is viewed allows aspirational associations to be promoted, i.e. associations based on how the company or product would like to be seen (or how the consumer would like to see themselves) rather than being based on current reality (Kapferer, 2004). By comparison, for current employees, employer brands are entirely experienced back stage, creating a unique branding context in which perceived promise and brand experience need to be tightly aligned and can be monitored at close range by the target audience at all times. Discussion Developing the typology of EB success characteristics gives rise to certain implications for theorists and practitioners. Indication of EB as a Distinct Context for Research and Theory Development Much extant brand theory is clearly applicable to the EB context, particularly with respect to the employee attraction role of the employer brand. Further research using the lens of brand theory is indeed warranted. However, EB should rightly be viewed as a distinct context for brand theorists to consider, given the ability of a great number of the brand s audience, i.e. current employees, to view the brand from all aspects and the importance of psychological contracts to the success of the employer brand. Various aspects of the branding process that are regarded as peripheral to product branding necessarily take on pivotal importance for the employer brand (e.g., the accuracy of internal communications and consistency with external communications, or the importance of senior management in demonstrating behaviours consistent with the brand). Acknowledging the distinctness of this context will help to guide researchers to those aspects of the process that will perhaps facilitate the most meaningful theory development. Inclusion of Variance of EB Success in Future Research Identifying employer brands with varying levels of success is useful for future empirical investigation. Using the typology as a starting point, researchers can identify employer brands with varying levels of success, allowing the processes underpinning successful and unsuccessful employer brands to be meaningfully examined. This is a first step in quantifying the benefit of success and developing other, quantitative, measures of success. Table 1 gives a summary of common human resources metrics that correspond to the attractive/unattractive, accurate/aspirational dimensions. These metrics enable researchers to initially categorise the level of success of potential respondent firms. 1691

Table 1. HR Metrics and Corresponding Dimensions of Success Type of metric Indications for successful employer brands Percentage of job offers accepted Higher percentage than industry average indicates attractive Number of applicants per role Higher number of applicants than industry average indicates attractive Average length of tenure Higher than industry average indicates attractive^ Average staff turnover Lower than industry average indicates accurate (contract fulfilled)^ Level of staff engagement* Higher than industry average indicates accurate (contract fulfilled) *Staff engagement (May, Gilson and Harter, 2004) is a measure of physical, cognitive and emotional fulfilment by employees at their place of work. ^Execessively low turnover/long tenure may be a misleading indicator of EB success as a stagnant employee pool may inhibit the evolution of the firm and the overall engagement of employees. Long tenure/low turnover should be assessed in combination with other metrics, particularly staff engagement. While these metrics are not a substitute for a deep and robust understanding of a firm s employer brand, taken together, they can help to establish a snapshot of the nature of the firm s current EB success. Practitioners may use the typology as an initial health check of their employer brand and analysts can use this to identify or filter respondent firms for further investigation. Conceptualisation of the Employment Experience as a Product The concept of the employment experience as a product and employees as consumers of this product was first put forward by Berry (1981), but has yet to be fully explored in the literature. The employment product consists of aspects of the firm that shape the experience of the employee. From the data, the firm s culture, policies and processes appear to be core product components. By conceptualising the employment experience as a product, the scope of applicable marketing theory increases. For example, product management and development theory may prove a rich resource for firms seeking meaningful differentiation of their employment experience which, in turn, is the foundation of their employer brand. Further Support for Theory Alignment Across HR and Marketing As indicated by the results, the alignment of employment experience with perceptions of the employee value proposition (managed and informal) determine the extent to which the psychological contracts are fulfilled and the employer brand is successful. Both the marketing and HR functions have a stake in the firm s culture, policies and processes and the way that they are portrayed internally (through internal marketing and communications) and externally (through product, corporate and recruitment promotion). Interaction between these two disciplines occurs throughout the EB process (Glassman and McAfee, 1992; Zeithaml, Parasuraman and Berry, 1985). It would be useful, especially in the EB context, to strive for greater theoretical and practical alignment so that firms may reap the benefits of strategic consistency across HR and marketing. 1692

Conclusion This study takes a first step in addressing the need for a better understanding of employer brand characteristics and drivers of success. Theorists and practitioners would benefit from, initially, empirically linking the human resources metrics listed in Table 1 to employer brands in varying states of success. Even greater benefit would be achieved by examining successful and unsuccessful employer brands in practice to establish links between underlying brand processes and successful outcomes. Finally, the development of metrics quantifying the strategic benefit (or otherwise) of EB outcomes and linking these to changes in corporate value would assist in rounding out the knowledge base for this emerging area of marketing theory and strategy. 1693

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