primer articulo sobre employer branding 1996

22
The employer brand Tim Ambler* and Simon Barrow * Address: London BusinessSchool, Regents Park, London NWl 4SA; UK; Tel:+44 171262 5050; Fax: +44 171 724 7875; [email protected] ac.uk http://www.lbs.lon.ac.uk Received (in revised form): 30th October, 1996 Tim Ambler is Grand Metropolitan Senior Fellow at the London EusrnessSchool. Simon Barrow is Chairman of the manage- ment communication consultants, People in Business. Agsrnncr This paper teststhe application of brand man- agemeflt techniques to human resource manage- ment (HR). The context is set by defining the 'Employer Brand' concept anil revietuing cltrrent HR concerns. Pilot qualitatiue research is re- ported with top executiues of 27 UK companies, who utere askedto reflect ot'ttheir HR practices and the releuance of branding. This exploratory research indicates that mar- keting can incleed be applied to the employment situatiotr. Bringing these functionally separate roles closer together u,ould bring mutual beneft and lead to comparable performance meAsLtres, eg, trust and comntitment. Strongcorporate eq- uity tuith the brand's customers can improve the returnon HR, while at the same time improved HR can improve the return on brand equity front external tustoners. Formal, Iarger scale re- search would be required to substantiate tlte reci- procal benefits from a closer alignment of HR artd marketing practites. INTRODUCTION Annual reports frequently extol people as the company's most important resource, and/ or its brands as its greatest assets. Nur- ture both of these, and the bottom line should take care of itself. The researchis re- ported towards bringing these separate disci- plines of human resources(HR) and brand marketing into a single conceptual frame- rvork. On the one side, the employer can be seen as a brand with which the employee developsa closer relationship. Employee, and thus corporate, performance will. be influ- enced by awareness, positive attitudes toward the 'brand', loyalry and trust that the 'brand' is there for the emplovee. Marketing, reciprocally, is rnoving to an increasing recognition that there should be greater people orientation and less exclu- sive focus on short-term transactional eco- nomics. It is easier, cheaper and more profitable to keep existing customers than recruit .r.r" orr.r.1 Marketing essentially has the function of achieving corporate objec- tives, typically profit, through meeting the customers' own objectives. Substituting 'employees' for 'customers' is perhaps a small step but not one, as will be seen, cur- rently recognised by British industry. The two goals should be mutually rein- forcing: continuing good relationships be- trveen the company and its customers necessarily involves the employees. Following a discussionof relevant market- ing concepts, the 'Employer Brand' (EB) can be defined. Some current HR concerns are noted rvhich the EB concept might assist be- fore reporting the findings of qualitative re- searchinterviews with top executivesof 27 (JK companies,rvho u,ere askedto reflect on their HR practices. While it is not currently part of their HR thinking, most respondents found the EB concept helpful and relevant. F*' Top: Tim Ambler Above: Simon Barrow TheJoumal ofBrand llhnagenrenr Vol + No l 1996 pp IE5-lO6 O Henn Srerr an l)ublications, 1 I i0,2-1 I X

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Primer articulo publicado por Tim Ambler* and Simon Barrow en The Journal of brand management donde se hace por primera vez una definición del concepto, presentando un estudio realizado en diferentes empresas en 1996.

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Page 1: Primer Articulo sobre employer branding 1996

The employer brand

Tim Ambler* and Simon Barrow* Address: London Business School, Regents Park, London NWl 4SA; UK;Tel: +44 171262 5050; Fax: +44 171 724 7875; [email protected] ac.uk http://www.lbs.lon.ac.uk

Received (in revised form): 30th October, 1996

Tim Ambler is Grand Metropolitan Senior Fellow

at the London Eusrness School.

Simon Barrow is Chairman of the manage-

ment communication consultants, People in

Business.

AgsrnncrThis paper tests the application of brand man-

agemeflt techniques to human resource manage-

ment (HR). The context is set by defining the

'Employer Brand' concept anil revietuing cltrrent

HR concerns. Pilot qualitatiue research is re-

ported with top executiues of 27 UK companies,

who utere asked to reflect ot't their HR practices

and the releuance of branding.This exploratory research indicates that mar-

keting can incleed be applied to the employment

situatiotr. Bringing these functionally separate

roles closer together u,ould bring mutual beneft

and lead to comparable performance meAsLtres,

eg, trust and comntitment. Strong corporate eq-

uity tuith the brand's customers can improve the

return on HR, while at the same time improved

HR can improve the return on brand equity

front external tustoners. Formal, Iarger scale re-

search would be required to substantiate tlte reci-

procal benefits from a closer alignment of HR

artd marketing practites.

INTRODUCTIONAnnual reports frequently extol people asthe company's most important resource,and/ or its brands as its greatest assets. Nur-ture both of these, and the bottom l ineshould take care of itself. The research is re-

ported towards bringing these separate disci-

plines of human resources (HR) and brand

marketing into a single conceptual frame-rvork. On the one side, the employer can beseen as a brand with which the employeedevelops a closer relationship. Employee, andthus corporate, performance wil l. be influ-

enced by awareness, positive attitudes towardthe 'brand', loyalry and trust that the 'brand'

is there for the emplovee.Marketing, reciprocally, is rnoving to an

increasing recognition that there should begreater people or ientat ion and less exclu-

sive focus on short-term transactional eco-nomics. I t is easier, cheaper and moreprofitable to keep existing customers thanrecruit .r.r" orr.r.1 Marketing essentially hasthe function of achieving corporate objec-tives, typically profit, through meeting the

customers' own object ives. Subst i tut ing'employees' for 'customers' is perhaps a

small step but not one, as wil l be seen, cur-

rently recognised by British industry.

The two goals should be mutually rein-

forcing: continuing good relationships be-

trveen the company and i ts customers

necessarily involves the employees.

Following a discussion of relevant market-

ing concepts, the 'Employer Brand' (EB) can

be defined. Some current HR concerns are

noted rvhich the EB concept might assist be-

fore reporting the findings of qualitative re-

search interviews with top executives of 27(JK companies, rvho u,ere asked to reflect on

their HR practices. While it is not currently

part of their HR thinking, most respondents

found the EB concept helpful and relevant.

F*'

Top:Tim AmblerAbove:

Simon Barrow

TheJoumal ofBrandllhnagenrenr Vol + No l1996 pp IE5-lO6O Henn Srerr an l )ubl icat ions,1 I i0,2-1 I X

Page 2: Primer Articulo sobre employer branding 1996

Figure 1 Linkbetween quality ot

employees andquality of

producUservice

Best applicants

of mouth

Best shops

In the words of one leading retailer amongthe respondents, ' i f we have the best shops,with the best people, then we have the bestword of mouth and receive the best applica-tions and then we wil l have the best shops'.Figure 1, captures the virtuous circle we areseeking.

The paper concludes with proposals forfurther research to substantiate the benefits,and identi$' the disadvantages, from a closerintegration of marketing and HR thinkingand practices. It is expected that there

"vil lbe considerable variation in the optimal mixbetween industries and companies. The re-search needs to show not just the generalpicture but how companies can select themix of HR and brand disciplines most ap-propriate to their circumstances.

DEFINING THE EMPLOYER BRANDBerry defined relationship marketing as 'at-

tracting, maintaining and - in multi-ser-v ice organisat ions - enhancing customerrelationships'. Koder2 shifted from his tradi-tional microeconomic orientation to seeingthe marketplace as a 'netr,vork of value-ladenrelationships'.

Kot ler and Armstrong3 see relat ionshipnrarketing as reflecting the goal to deliverlong-term value to customers, and the keylneasure of success as long-term customer

satisfaction. The importance of supplier andor customer relationships increases as a func-tion of profit margins and the number ofcustomers. A myriad of buyers in a lowmargin business such as a supermarketwould not make for partnership in the sensethat McKinsey has with its clients. The EBconcept has most application in high val-ued-added, service businesses: the higherthe salaries and the fewer the number ofemployees, the more each employee rela-tionship with the employer matters.

Relationship marketing marks a shift, inprinciple, away from exclusive short-termeconomic concern with immediate transac-tions toward long-term building of brandequiry which Amblera has expressed in rela-tional terms. In practice, there is constanttension between short-term and long-termconsiderat ions. Feldwick5 has quest ionecwhether the brand equiry concept is neededat all. He is right that the l iterature is con-fused. He is also right that the value of anasset should be distinguished from the assetitself. Thus if, for the moment, a neutralterm, 'XXX' is used, for the intangible assetwhich good marketing creates, the financialvaluation of XXX is not the same as XXX.Nor is any other set of measures of XXXthe same as XXX.

In Feldu'ick's analysis, marketing perfor-mance needs to be measured bv a combi-

Page 3: Primer Articulo sobre employer branding 1996

nation of; current performance, diagnosis ofcurrent trends, the brandt chances offutureprofits and, perhaps, a valuation of the brand'scurrent worth. In the accounting model, thattranslates into the current performance andthe state of XXX, or perhaps the change inXXX since the start of the period. In all theconfusion, there is a loose, but not consen-sual, drift towards 'brand equiry' being theleast bad label for XXX. The 1991. Market-ing Science Institute working prper6 ir, tosome extent, an rmprimatur. While sharedlanguage might make marketing a little easier,progress requires challenge to accepted think-ing. The implicit question is whether'equity'adds anything to 'brand'.

The thinking behind branding is far fromnew. San Bernardino of Siena,T the medievaltheologian, was among those who discussedmarkeis, marketing and fair pricing. He

summarised consumer benefits from thegoods/services purchased as uirtuositas (func-

tion), raritas (scarcity or market price) andcomplacibilitas (psychological benefi ts) .

These three basic properties are unchangedtoday. Aakers expresses the value of brandingto the customer as interpreting/processing ofinformation, confidence in the purchase de-

cision and use satisfaction.The functional benefit - virtuositas - of

a spade is not the qualiry of the spade, but

what the spade will do for us, eg, help us dig

better. The economic benefit - raritas - is

notjust the price ofa product but how good

a deal it represents. Finally, the psychological

benefit - complacibilitas - rs not Just lmage

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 King:g 'a prod-

uct is something that is made in a factory; a

brand is something that is bought by a cus-

tomer ' . In other words, the product com-

prises the functional benefits and the

consumer buys a holistic package of bene-f i ts, including the economic and psycho-logical - notably satisfaction.

Gardner and Ler,y,1o as well as King, notethat a brand has a 'personality' from theconsumer's point of view. This is echoed byKosnik's11 emphasis on the trustworthinessof brands. His 'CRUD' test assesses rhe ex-tent to which brands are Credible, LJnique,Reliable and Durable. The brand-as-personconcept is essential to understanding the re-lationship between employers and their staff.In the late 1980s, employees ceased to seeIBM as trustworthy. 12 The personality ofIBM had becorne self-centred and stodgy.

The 'Employer Brand' can be defined as'the package of functional, economic andpsychological benefits provided by employ-ment, and identif ied with the employingcompany'. The ongoing company/em-ployee relationship provides a series of ex-changes of mutual benefit, and is an integralpart of the company's total business net-work.

The benefits the EB offers employees par-allel those that a conventional (product)brand offers to consumers:

- developmental and/or useful activit ies(functional);

- material or monetary rewards (eco-nomic);

- feelings such as belonging, direction andpurpose (psychological).

The EB also has a personality, and may bepositioned in much the same way as a prod-uct brand. Accordingly, traditional market-ing techniques, particularly research, shouldbe, mutatis mutandis, applicable.

Where the company brand and theconsumer brand are the same brand (eg,Shell), the EB is also the same. Its person-ality uis-i-uis the consumer should be con-sistent rvith its personality as seen by otherparts of i ts business nerrvork, eg, i ts em-ployees, i f i t is to be trusted. I f an em-

Page 4: Primer Articulo sobre employer branding 1996

ployer has many consumer brands anddoes not market a consumer brand underthe company name, eg, Unilever, then theEB becomes, in th is perspect ive, s implyanother brand being marketed to a distinctsegment, namely, the employees. As forany other brand,l3 the value of the EB de-pends on the importance 'customers' ( inthis case employees) assign to benefits thecompany is able to deliver and its differen-t lat l0n.

The question can now be addressed as towhether a brand, or the EB, needs the addi-tion of 'equity' when discussing it as a cor-porate asset.

Consider a new brand: NB. At the timeit is launched i t has no XXX (as above,the intangible asset created by good brandmarketing) in the sense that any measure-ment, f inancial or otherwise, of XXX iszero: no awareness, no loyalty, no penetra-t ion, no market share etc. Three yearslater, suppose NB is a great success. NB isexact ly the same and i ts marketers darenot change i t . NB has now acquired sig-ni f icant market share, a premium pr ice,high awareness and loyalty and positive at-t i tudes. XXX, in other words, haschanged but NB has not. I t fo l lows thatsome label wi l l be needed to dist inguishthe brand asset from the brand itself: 'eo-

uity' wil l do nicely.EB equiry is therefore the intangible asset

in the minds of existing and potential em-ployees that has been built up by good mar-ket ing and HR pract ices. I r can bemeasured, just as any other brand equi tycan, and valued. The sale of a company in-volves the transfer of employee brand equirywhich may be raised or diminished by thatsale sirnilarly to the consequences of the saleofa product brand.

Before consider ing some cLrrrent HRconcerns, concepts s imi lar to EB are re-vierved to establish '"vhether EB adds any-thing or .rvhether existing ideas are merelybeing re-labelled.

DOES THE EMPLOYER BRANDCONCEPT ADD ANYTHING?There are three main groups of conceptswhich are similar to the EB:

- corporate culture and identity;- internal marketing;- corPorate reputatlon.

After reviewing these in turn it wil l beshown why the EB concept adds value.

CultureOlinsla has also suggested that HR tech-niques increasingly resemble those of tradi-tional marketing and that both thesepromotional activit ies concern the identityof the corporation. It might therefore besensible to bring them together. WhileOlins is concerned with corporate identirysuch visual imagery should represent the un-derlying realiry of the organisational culture.

The organisationi 'culture' may be de-fined 15 as the values that support the organi-sational purpose and strategy or corporateidentity. Indeed, Millsl6 suggests that thecollapse of IBM in the 1980s and early 1990swas due to two failures of commitment (roits customers and its employees). By damag-ing the loyalty of employees, they damagedcustomer satisfaction. Using McKinsey re-search on mid-size, high growth firms, CIif-ford argues that the active management ofculture is a primary driver of success.lT

An improvement in employee motivationshould lead to improved employee perfor-mance which should, in turn, lead to im-proved customer relationships and thusstrengthened brand equity which shouldhave an impact on motivation, completing avirtuous circle. Companies with strong cus-tomer relationships and brand equity tendto be character ised both by posi t ive em-ployee relationships and superior long-termperformance. l8 The importance of cul tureis very clear; the issue is how it can beproactively managed.

Page 5: Primer Articulo sobre employer branding 1996

Internal rnarketing done BY

Departntent Wole organisatiotr

Figure 2

Classification ofinternal marketing

Internal marketing done TO

Department

Wtole organisation

Typ. I

Type III

Type II

Type IV

Internal MarketingThe literature on ' internal marketing' doesnof make the direct brand/employee man-agement comparrson. Internal marketing(IM) is defined as 'marketing to employeesofan organisation to ensure that they are ef-fectively carrying out desired programs andpolicies' in the American Marketing Associ-ation's dictionary. Some will reject thissomewhat manipulative understanding ofmarketing and employee relationships.Kotler defines IM as 'the task of successfullyhiring, training, and motivating able em-ployees to serve the customer well ' ; sti l lsomervhat uni-directional. 1 9

IM has been widely noted, mostly in thecontext of services marketing, but not seri-ously researched.20 Foreman and Money2lclassi4, IM into a 2x2 rnatrix based on whodoes the IM and to whom i t is done: theentlre organrsatron or a specific department(see Figure 2).

Type IV IM (the whole organisation ap-plying IM to itself) is the variant closest tothe theme of this paper. It is also furthestfrom the populist view of IM, being merelythe means by which the marketing depart-ment persuades the rest of the organisationto do what it wants. Gronroos22 sees IM as

rype IV Every individual (employee) shouldbe treated as a customer and every customeras a member of the company.

Hutt23 applies relationship marketing to

IM in the Type III sense (the marketing de-partment applying it to the rest of the or-

ganisation) . The marketer is the internalprotagonist of the end customer: 'to effec-tively serve as the advocate for the con-sumer at various levels of the hierarchy andacross functions, the marketing managermust initiate, develop, nurture and sustain anetwork of relationships with multiple con-stituencies within the firm' (p. 356).

Foreman and Money disti l type IV IMinto three factors: employee developmenr,rewards and a vision in which employeescan believe. They have difficulty, however,in distinguishing IM from good HR prac-t ices part ly because the extent to whichemployees should be truly involved in deci-sion-making has yet to be formalised andwill vary from organisation to organisation.The three types of internal marketing ben-efits they extracted were, for comparison,employee development (function), rewards(money and/or economic benefits) and vi-s ion andlor something to bel ieve in (psy-

chological benefits).

Corporate reputationDo'ivling2a includes a number of employeraspects in his work on developing the cor-porate brand. His framervork of alternativepositioning themes and the factors affectingemployees' perceptions of corporate imageand reputation are shown in Figures 3 and 4.The central box in Figure 4, labelled 'Em-

ployees' images and reputation of the com-pany', represents an intangible asset for thecomDanv rvhich needs to be nurtured if

Page 6: Primer Articulo sobre employer branding 1996

Figure 3Alternative

positioning themes

Organisational Attributes

. slze

. technologyleadership

. lnnovatlon

. people ftest employees)

. flexibiliry (adaptable to customer requests)

Stakeholder benefits

. rational appeals ftased on organisational

attributes. psychological appeals (a consequence of

being associated with the organisation). environment-oriented. communiry-orientated

Custorner/stakeholder group

. heary, medium, light user

. particular industry sectors

. particular sized customers

Source: Dowling (1994)

Price

. bargain

. value (besc price/performance)

. prestige (high pricelhigh quaiiry)

Geographic

. regional versus global scale

Competitors

. market leadership ftiggest 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

performance is to be maximised. This is theEB equity in the minds of its employees,just as the awareness of , at t i tudes and be-haviours towards a product brand such asShell is the brand equiry of Shell.

What does the EB concept add?AII these approaches share recognition of theimportance of the intangible asset made upof the relationships between the corporationand its employees, between employers andthe i<lentity they present to the world.Clearly they have much in common. TheEB concept uniquely synthesises them into asingle term rvhich can be actively managed(as can IM) and rneasured as EB equity (adevelopment of IM). Culture, IM and repu-tation overlap but essentially differentiate

these from other corporate activit ies. EBrecognises the similarit ies between HR andregular (product) brand marketing thus per-mitting, in principle, their functional skil lsto be used in each others' areas.

Trust, for example, has been singled outas a key dynamic for firms in their relation-ships with employees,25 and is also theprincipal construct in relationship market-ing.26 Cruise O'Brien27 proposes that trustis 'sustained by reputat ion. Reputat ion isdeveloped on the basis of the observat ionand assessment of consistent behaviour overt ime . . . . Reputat ion has three importantcomponents in the context of the firm -

competence, consistency and integr i ty ' .Figure 5 reproduces her analysis of trustinto cognitive and affective components.

Page 7: Primer Articulo sobre employer branding 1996

Professional values

Industry imaga

Competitors'activities

Publicity

Employees' perceptions of cuand other external groups' reputatio

of the company

Figure 4 Factorsaffecting

employees'perception ofcorporate image

and reputation

Source: Dowling (1994)

Employee's imagesand reputationof the company

Advertising, producVservice quality and

These same measures could be usedequally to assess the external marketingperformance and the EB. Similar analysiswould be required for the other key con-structs of brand equiry: awareness, and atti-tudes such as commitment and behaviour.Brand equiry covers both existing employ-ees and those who the employer would liketo attract. While one would assume that allexisting employees at least recognise theiremployert name, the word has two dimen-sions: breadth (the proportion of the popu-lation having any recognition of the name)and depth (the easd with which it does

so).28 Thus awareness is part of the legiti-mate measurement of brand equity even foremployees.

Employers do not provide employeebenefits altruistically any more than theyprovide products to cusComers purely forcustomer sat isfact ion. Both are means toachieve their own ends, typically share-holder gain. There is growing recognitionthat these ends are best served by taking along-term view of customer relat ionships(relationship marketing) and, it is sug-gested, of employee relationships. The costsof recruiting the best people, training and

Cognitive (rational)

Assessment of

reliability

comPetence

fairness

conslstency

Source: Cruise O'Brien (1994)

Alfective (emotional)

Faith in

care

concern

oPenness

suPPort

Figure 5Assessr''ng trust inan organisation

Page 8: Primer Articulo sobre employer branding 1996

Figure 6

Comparativequalifications in

1994

Proportion of totalpopulation qralifiedto leuel:

NVQ-2

NVQ-3

Proportion of newentrants qualified toIeueI:

NVQ-2

NVQ-3

UK France

3514

Germany

847

r . f

1.1

l7IJ l f ,

562

Source: Ski l ls Audit, 1996, f igs A8.16, A8.17

developing them can only be recovered i fthey stay long enough to make a return onthat investment.

SOME CURRENT HR CONCERNSOrganisational Iearning, tearnwork andspeed of response are people factors thatwill, at least in part, determine an organisa-tion's success. 'Without exception, the dom-inance and coherence of cul ture [ is ] . . . anessential quality of the excellent compa-nies.'29 Pfefler concurs: 'as other sources ofcompetit ive success have become less im-portant, what rernains as a crucial, differen-tiating factor is the organisation, itsemployees and how they work'.30

Just as marketing is nor,v widely seen asbeing too important to be lefr to lt larketers,so HR is, a lso, too important to be lef t tothe HR function alone - l ine ntanagementrnust also take direct responsibil i ty. In thispaper HR will referred to in this widernon-ciepartmental, sense.

Recent dou'nsizing headlines may haveexaggerated the issue u,hich is, by i ts na-ture cyclical. Nevertheless automation hasbrought a cont inuing demand for work-forces which are smaller but better. Hisher

skil ls and educational levels are needed, aswell as greater commitment, flexibility andstabil ity. These concerns wil l be examinedin greater detail below.

Low skill and education level in theworkforceFigure 6 shows that 26 per cent of the UKt1994 popalation was qualified to NVQ-2 or3 compared with 49 per cent and. 55 percent for France and Germany respectively.NVQ-2 and -3 are equivalent to at least 5GCSEs at Grade C and 1.5 A-levels respec-tively. The position is similar for new en-trants though the continually risingproportion of A-level passes, now 86 percent, indicates that this gap wil l close. TheIJK target for 2000 is to reach Germany's1994 NVQ-3. To catch up, the UK will re-quire radical improvement in the educationof those entering the workforce, combinedwith much better training for those alreadyin work. This, in turn, is a long-term process

',vhich requires commitment and motivationby both employers and employees.3l

Low employee commitmentToday's best ernployees, l ike today's cus-tomers, know thel' are in demand. They re-

Page 9: Primer Articulo sobre employer branding 1996

Figure 7Employeecommitment indifferent industry

sectorsVehicle

Financial institution

Hotelg

Research

EEntrenched

Source: Jamieson and Richards(1996)

EAverage trShallow @Convertible

quire respect as indivividuals, understandingof theit own career goals, training and thementoring to achieve them. More is re-quired from employees in terms of responsi-bil i ty, long hours of work and goodinter-personal as well as technical skil ls.However, employee commitment is variable(see Figure 7).

The expressions'Entrenched' , 'Average' ,'Shallow' and 'Convertible' are fromHofmeyr who divided brand users intothese four seg-.ntr.32 The first two are se-cure and unlikely to change brand allegiance

in the long and short term respectively.'Shallow' means that they are l ikely tochange but, unlike 'Convertible', not yet onthe point of so doing.

Clearly the need for commitment variesby type of industry and role within thecompany. Jamieson and Richards33 cite thecase of one major bank in which customerand employee commitment were measuredacross the company's regional branches.Figure 8 shows markedly higher customerthan employee comitent levels. The au-thors believed this case to be representative-

Figure ICommitment levels

of customers vs.

employees in arepresentativecase study

B EntrenchedSource: Iamieson and Richards

ElAverage(lee6)

EShal low @Convertible

Page 10: Primer Articulo sobre employer branding 1996

Figure 9Employee

commitment by job

UPe

I Entrenched

Source:Jamieson and Richards 1996)

trAverage trShallow @Converlible

As might be expected, commitment levels

rise with senioriry as shown in Figure 9. Lowcommitment among customer-contact staffhas clear implications for customer servicelevels,34 and it is in this area that proactivemanagement of an organisation's EB couldpotentially have the greatest positive impact.

HR SummaryMany uK organisations are faced with theneed to achieve ever higher qual i ty stan-dards in their products andlor services.They rely on their employees to del iverthese improvements, and compete wi theach other for the best talent. At the sametime, skil ls levels are not increasing to thelevel of, for example, Germany. Employeecommitment is var iable, and may wel l belower than that of customers. These fac-tors are unlikely to be of equal concern toal l companies. High customer-contact ,h igh employee, value-added businesses,such as consultancy, '"vould be more l ikelyto be af fected by cul ture and employeemorale, than those rvhere labour is l i t t lemore than manual dexterity. As developedeconomies shift inexorabiy from the pro-

duct ion of goods to services, and greatervalue-addcd services, these concepts areseen as beconr ing rnore important.

METHODOLOGYThis exploratory research took the form ofsemi-structured depth interviews with re-spondents from 27 companies in a variety ofindustry sectors, mostly services. The com-panies are l isted as Appendix A and includeconsultants, f inancial services, retail, com-munications, alcoholic drinks, pharmaceuti-cals and footwear. The respondents were aconvenience sample of clients and contactsof People in Business, a London-based man-agement consultancy.

Statistical considerations were not a fac-tor in this qualitative study. The objectiveswere to:

- ascertain each company's overall ap-proach to these issues,

- gauge the reaction to the EB as an inte-grating (HR with marketing) frame-work.

The discussion guide for the interviews isattached as Appendix B and covers:

(1) the existence of the EB, and its compo-nents:

(2) the importance of the EB to the corn-pany, and its influence over HR policy;

(3) positioning of the EB;

Page 11: Primer Articulo sobre employer branding 1996

(4) measurement of employee relationships;(5) the main obstacles to developing the

companyt reputation as an employer.

These headings were used only to providethe structure for the interviewers and werenot read out to respondents. The inter-viewers were briefed not to introduce theEB phrase but to use, in the blank spaces,rvhatever was the closest term already inthat employer's lexicon. In other words, theintroduction to the interviews sought toidentifi, and then, adopt whatever languagethe respondent already used for this topic.In the event, f irms did not seem to havetheir own language for this concept and'EB' was quickly adopted.

The respondents were mostly at the levelof functional department head, with re-sponsibil i t ies encompassing human re-sources, marketing, and/ or internalcommunication. While largely familiar withmarketing concepts, respondents foundtheir application to HR novel and some-times uncomfortable. Some warmed to theEB concept as they thought about i t , andsome did not.

Too much weight has not been put onindividual comments. As noted above, thetest ing of hypotheses was not sought, butrather to establ ish the range of responses.The views of individual respondents wil lnot always be representative of their com-panies and the companies may not repre-sent UK employers as a whole. For

example, these four statements al l come

from the same comDanv in the servicesector:

'People in the organisation do not believe

in the companyt stated values - they arejust an empty statement from top man-agement.'

'Our values are the driver of our business,

everybody follows them and they are em-

bedded in our people.'

'We have a lot of turf rvars - it is be-cause board members thernselves onlywork as a team about 20 per cent of theirtime - they take care of their own busi-ness, not of the company as a whole.'

''We must practise rvhat we preach, other-wise it could be daneerous.'

Language was an issue. The EB is not cur-rent ly part of the th inking of HR andcommunications professionals, though theywere familiar with marketing language ingeneral. Clearly, the introduction of mar-ket ing language to these interviewscoloured the ensuing discussion. On theother, there is no recognised common lan-guage available today to cover a company'sidentiry culture, brand and reputation as anemployer.

This methodology was designed to be ex-ploratory: the researchers were not seekingto prove the case for the EB concept but totest the water of its acceotabiliw.35

FINDINGSOnly l imited evidence was found of at-tempts to manage the employment experi-ence as a whole. Managing any integratedprocess, including the EB, is cross-functionaland therefore politically delicate. In order tobe managed coherently and holistically theEB would need to be championed by a se-nior management figure.

Now to turn to the experience and viewsof the respondents, with an emphasis on al-lowing respondents' comments to speak forthemselves. Findings are presented under thefollowing headings:

- The Employer Brand - its significanceto employers;

- Managing and measuring the EmployerBrand:

- Obstacles to developing the EmployerBrand:

Page 12: Primer Articulo sobre employer branding 1996

- The Employer Brand - its significance

to employers.

Most respondents seemed to associate the EB

closely with corporate culture, and were not

always clear as to the boundary between the

rwo concepts. The items identified most con-

sistently as key components of the EB conceptwere awareness and psychological benefis.

Most respondents also recognised the im-portance of the EB concept, although only in

a vague way, with low priority. Other pres-

sures and needs were given higher prioriry.

'-We are doing very little (nothing) to pro-

mote an EB within the firm. It is some-thing we need to work on, but I havemore presslng issues.'

'Frankly we have so much to do at themoment with the merger that we just

want to get the basics right. An EB con-cept is nice, but not essential.'

However, many of the respondents alsorecognised the de-facto implicit existence ofthe concept, and the importance and poten-tial of the EB if managed well.

'Certainly this branding concept exists. Itis a function of the benefits we can offer.'

'Your questions have certainly triggeredsomething, and I think I wil l work withthe idea in the future.'

'An EB should be connected to the valuesystem in the company and could create asubstantial competitive advantage.'

Corporate culture and reputation emergeover tirne regardless of whether they are ac-tively managed, and underlie corporateidentity. Corporate culture and reputationare firmly embedded in management think-ing, and there some resistance to recognisingthe EB as a separate and distinct concept.

'Corporate culture is a bit l ike an ele-

phant - you know it when you see it.

Cultures are not necessarily terribly capa-

ble of definition. People understand them

and can talk about them, but it 's quite

difllcult to label them in the r,vay that you

can put a label on a brand. You can't im-

pose culture on different brands.'

'The EB is so intertwined with culture

that I find it hard to seDarate them.'

'The EB concept reflects the culture. Do

you really want to distinguish betweenthem?'

'Our EB is probably not that strong; we

have a high turnover rate, partly becausetoday our culture is not well articulated.'

'The EB must be consistent with the

consumer brand, which is the pil lar and

the values of the corooration.'

Corporate performance was identified by anumber of respondents as a key prerequisitefor a strong EB.

'Performance and reputation are impor-

tant - you must be successful as a busi-ness in order to have a good EB - youhave to perform.'

' It is diff icult for us to build our EB, be-cause we have not had good performanceduring a couple of years.'

External and internal perceptions can diilervastly:

'I 'm not sure whether we have a strongEB . ... 'We are perceived as being an in-

teresting, dynamic, progressive corpora-tion - external surveys shorv that 99 percent of the people think we are great.However, our internal surveys show thatonly 14 per cent of our employees are

Page 13: Primer Articulo sobre employer branding 1996

hrppy working here!'

Respondents singled out awareness and psy-chological benefits as the foremost aspects ofEB in ternrs of enabl ing a company to re-cruit, retain and motivate the best people.This thinking, however, did not necessarilyextend to a recognition that the employ-ment experience as a whole - includingbut going beyond the recrui tment exper i -ence - needed to be managed in a coher-ent and holistic fashion.

Awareness was identified as a key factor inrecruiting the calibre of applicants desired.This was seen to be closely linked with thecompany's performance, market position,reputation and product brand(s).

'There is not that much difference berweerrus and the competition in the way we go

about our business, but everyone applies tous first because of our reputation.'

'People come to us because they haveheard about us - the CLUB feelins isgreat.'

'We wanted to hire 30 graduates and got2000 applicants! People are very much

aware of us and find our company veryattractive to work for.'

'We have a great name in the UK, but

when we go overseas it is different, no-body knows who we are.'

'People join our organisation because we

are number one.'

In addition to awareness, the psychological

benefits of a strong EB were considered to

be a key aspect of the concept. This was in

part, again, l inked to elements that derive

from performance, market position and gen-

eral corporate reputation. Factors identified

included the prestige and standing of a com-

pany, the feel-good factor of its 'name

value', the culture and lifestyle it offers, andthe sense ofjob satisfaction and security itprovides.

'People stay because not just becausethey have a very good remunerationpackage, but because the name looksgood on the CV'

'People are honoured to be working forour company, you almost feel invited.'

'Our employees are not motivated pri-marily by money, but more by the psy-chological rewards.'

'We hire from other multinationals forlocai staff. When there just aren't enoughgood people to go around, as is the casehere at the moment, there is a value toemployees above money associated withfuture prospects, lifestyle and - perhapsmost 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.'

Measuring and managing theEmployer BrandMany of the respondents identified the HRfunction as the most suitable department formanaging the EB, provided that it waslinked closely to the Chief Executive. In thewords of two respondents, HR would be in

a good position to take on this role in theirfirms because:

'HR is a part of the senior management

team in each of the divisions, and it is also

e pert of the Executive Committee. We

recognise that we are responsible for

coaching line managers.'

' 'We have a very decentralised organisa-

tion where we [HR] support the efforts

Page 14: Primer Articulo sobre employer branding 1996

of managers. The EB should be created

by middle managers and spread by them

throughout the organisation.'

Others saw EB management as a cross-func-

tional task involving senior management aswell as the HR, marketing, and corporatecommunication functions. In many cases, a

clear view on the locus of, and approach to,responsibiliry for EB management had yet toemerge.

'To what extent should the EB be led bythe customer end of the business and to

rvhat extent should it be directed by the

top of the organisation?'

None of the respondents' companies explic-it ly managed the EB as such. However, anumber of the participating companies hadsimilar implicit understanding l inked withHR practices and career prospects.

'We have rigorous recruitment to find thebest people, we give them on the job

training and great opportunities for careerdevelopment - they know that and wedon't advertise it.'

'For onr top managers we offer careerprospects and general management expe-rience early. We have a great brand nameas a company.'

Some recognised that the EB does need tobe measured and managed.

'Is EB worth measuring? It is l ike asking- do you love your wife'.

With HR identified as the most appropriateleader of the cross-functional task of EBnlanagement, it is not surprising that com-ments on measurement tended to focus onHR activity. Benchmarking and internalsurveys were the most commonly cited waysto measure the var ious comDonents of HR

activiry including recruitment, training and

development, rewards, and performance

management.

'We make sure that our remuneration,

training etc is among the best in the in-

dustry - that is necessary if you want to

attract the best people. We also have a

personal development plan for each em-

ployee.'

''We have monthly revier,vs, 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. Theyboth indicate that the company is per-

ceived as a great place to work.'

Respondents were frank about approachesto HR and people management which seemto be less than systematic. Internal surveyswere not always followed through.

'-We don't measure the HR performance- not yet - but we wil l, given theamount of customer complaints, absen-teeism, and high turnover rates.'

'Our internal surveys show that 60 percent of employees are not feeling in-formed, and 40 per cent are dissatisfiedwith 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 per-

ceptions - there's a gap between themessages managers think they are com-municating and what employees actuallyexperience.'

Some respondents did think in terms of anumber of standard marketing techniques,

Page 15: Primer Articulo sobre employer branding 1996

including the need for segmentation, the useof pricing (rewards), and the importance ofprofessional communications.

Segmentation'Our group comprises three quite differ-ent businesses, and each requires a differ-ent sort of person.'

'Our group has a number of stronglybranded businesses in their own right, al-though within the group we would liketo tie them into our group ideals.'

.''W'e segment the market through our in-

ternal communication vehicles (eg, themanager rnagazine), which seek to de-velop the same themes but in differentcontexts, and targeted at specific internalgroups.'

Pricing/rewardsCompensat ion packages and systems havelong been the bedrock of HR activity butthey can also be seen as analogous to pric-ing products in the marketplace. The moreattractive the product, in functional andpsychological terms, the higher the eco-nomic price that can still provide user satis-faction. In the employment context, f irmsare well .aware that higher functional andpsychoiogical benefits permit greater f lexi-biliry in compensation packages.

'A change in the reward structure couldbe a factor in building a successful EB.'

'People stay because they enjoy the per-sonal recognition - and they receivegood pay.'

The importance of professionalcommunicationsInternai newsletters and briefings are todaycomrnonplace. Employees, both current andprospective, are also key targets for any ex-

ternal corporate advertising.

'-We know that our communication mustimprove, but people are very sceptical -

and not necessarily just the high achievers.'

'Our management all go to fancy presen-tations courses - but they should irrsteadlearn how to communicate rvith therrpeople - internally.'

Relati o n sh i p marketi n gSome of the respondents saw the relation-ship with employees in terrns similar tothose of relationship marketing, eg, trust,commitment, shared values, and longevityof relationships.

'One of the lessons we have learned isthat you must be up-front with people ...people are not fools.'

' l guess the Employer Branding conceptfalls uncier the "style and shared values"aspect of our strategy. It seems to fit intothe themes of integrity, control ethos,teamwork/collaboration and identif i ca-tion with the customer.'

'Our business involves very few lateralhires. We recruit our people from school- it's cradle to the srave.'

On the other hand, the relationship approachto the EB concept is far from universal.

'In our industry, people are only as goodas their last deal.'

Obstacles to developing the EmployerBrandMost of the respondents agreed that the con-

cept of EB was interesting, although some

held a negative perception of marketing in

general, as being 'artificial and manipulative'.

'EB is really just another gimmick, right?

In rny vierv these gimmicks are just for

incompetent managers.'

Page 16: Primer Articulo sobre employer branding 1996

As noted above, a number of respondents'

companies were too short of t ime andlorresources to devote much attention to devel-

oping their EBs. The awareness that, not

unlike consumer brands, an EB would takeyears of investment to build up, and yet stillbe vulnerable to quick and crippling damagethrough some 'bad incident', induced somewarrness.

Some had deliberately avoided this path.

''We are not interested in building an EB;we have 100 per cent staffturnover p.a. [tis only college kids that want to earnmoney to fund their studies.'

The main obstacles to the EB concept wereseen as the lack oftop level support and un-derstanding, internal politics and differencesof perspective (mental models) and weak de-velopment of the HR infrastructure.

Lack of top-level support and empathyDue to its long-term nature, the EB ap-proach requires top management commit-ment to the concept, and especially empathybetween top management, marketing andHR mind-sets.

'The biggest obstacle for a successful EBis the lack of funding and buy-in fromtop-management.'

'Senior management does not address theissues that need action - they pick theflavour of the month. During more thantwo years we have had the same issuescome up as a complaint in our internalsurveys - but nothing is done.'

''We are weak in converting our vision toaction, there's too much polit ics in theorganisation.'

'There is a gap bet'nveen our ExecutiveManagers and the managers that are sup-posed to execute 'uvhat we are suggesting.'

Weak HR infrastructureEqually, weaknesses in the existing HR in-frastructure and communication channelswere perceived as significant obstacles, and

a number of respondents voiced a reluc-

tance to 'bui ld a house on Door founda-

t ions' .

'Our reward and bonus structure is in-

consistent - some employees have re-wards linked to targets and objectives, but

others do not.'

'I feel we have a dodgy recruitment prac-

tice - we should tighten our recruitment

policy because we are not attracting good

qualiry candidates.'

'An internal survey showed that only 60per cent of staff knew about the strategy'blue book', something that divisionalmanagers were supposed to brief all theirpeople about.'

These obstacles are substantial. Many com-peting claims are made for top managementattention and cross-functional alignment.

FURTHER RESEARCHInternal marketing, of which the EB con-cept is a development, has not been widelyresearched. The fundamental empiricalquestion is whether firms using brand andmarketing disciplines in their HR functionsachieve better performance. Conversely, dofirms employing best HR practice in their(relationship) marketing programmes dobetter?

Clarif ication is needed of the extent towhich corporate cul ture can be and isbeing actively managed in companies. Thefindings here indicate that its existence isrecognised but the tools to manage i t donot exist. Issuing poiicy statements on val-

ues and culture has l itt le impact: what pre-occupies top management, rvhat they do

Page 17: Primer Articulo sobre employer branding 1996

and rvhat they ask about, is very inf luen-tial.

'Whether EB, internal marketing, corpo-

rate reputation and culture are differentthings, or different labels for the same thing,is less important than the collective contri-bution they can make to the achievernent ofcorporate goals. Clearly the concepts over-lap. What then matters, assuming they domake a difference, is w-hat management cando to enhance them.

The following research is needed:

- What, if any, active EB equity buildingprogrammes (under whatever name)exlst;

- To what extent the programmes are for-mal (written down and agreed by theBoard) or informal;

- FIow they correlate with subsequentperformance;

- Horv such programmes compare withtheir product marketrng programmes;

- The involvement, if any, of HR man-agers in product marketing and the con-sequences for those companres.

Empirically grounded evidence of successis more l ikely to lead to widespread adop-tion than the conceptual framework so farestabl ished. On the other hand, the pur-pose of th is paper rvas s imply to test thewater.

CONCLUSIONSIt rvould appear that the EB concept existsiniplicit ly rvithin some corporations, how-ever fuzzlly. The underlying trend in re-

sponses indicated a spectrum of high

applicabil ity rvhere high skil ls and develop-

ment \\'ere crucial, eg, consulting companies

and investment banks, to lower relevance forlarge-scale industrial and manufacturing

companies where employee individuality isless consoicuous. This echoes Kotler and

Armstrong36 ,uvho sarv relationship market-

ing as more relevant to situations of highprofit margins and ferl 'er customers, eg,consulting companies and investrnent banks.

The levels of sophistication of f irmswithin the same general area of the spec-trum differ substantially. This exploratoryresearch indicates that industry leaders, iethose r'vith the highest corporate brand eq-uity, are nrore conscious of their companyname or brand, both explicit ly in the exter-nal environment and implicit ly in internalsettings. Firms that follow an irnplicit EBmodel seem to have a higher retention rate,particularly among their rnore highly skilledpeople. In addition, these cornpanies areable to attract the best candidates more eas-ily in the first place, as reflected in the atti-tudes and career choices of potent ia l andexisting employees.

Overall, most respondents agreed that theEB concept is valuable in that it could bringthe discipline and theory of marketing intothe HR function, particularly:

- putting the emphasis on getting theproduct, ie the whole employment ex-perience, right;

- consistency ofbrand erperience (videomatching the audio);

- segmentation and umbrella branding;- using pricing/compensation benefits ex-

plicidy to balance functional or psycho-logical benefits;

- the importance of professional commu-rucatrons;

- the techniques of relationship market-mg.

This last point is of parricular importance. It isbelieved that the principles of relarionship mar-keting could allorv marketing and HR activrtiesto share a conulron framervork: the principles

of brand rnarketing can be applied, ntutatis ntu-tandis, to improving internal relationships and

thus corporate perforrnance. Conversel,v, theprinciples of HR management can illumine

custorner marketing activities. Similarly, the

Page 18: Primer Articulo sobre employer branding 1996

measures used to assess relationship marketingperformance (awareness, trust, commitmenr,other arirudes and behaviours) can be used forHR. and vice versa.

The Marketing Council was created inthe UK in 1995 because many leading com-panies believed that marketing principleswere not widely accepted in British compa-nies. In that context, it would be surprisingindeed if the EB concept was welcomed bythe respondents on first acquaintance. Nev-ertheless, it was found that both interestand, in some firms, enthusiasm for the idea.Those firms with marketing cultures havelittle to lose from so implementing the con-sequences. At the least, their HR and mar-keting functions wil l gain betterunderstanding of each other's disciplines.Furthermore, the McKinsey study refer-

enced abover/ would give grounds to be-lieve that more intensrve, actrve manage-

ment of culture in this way is associatedwith stronger growth.

'We have been implicit ly thinking, now

we have to be explicit to make things

happen.'

Acknowledgment

Tim Ambler would l ike to thank People in Busi-

ness for sponsoring the fieldwork and for providingthe Employer Brand concept. Both authors thankand acknowledge the considerable contribution by

Christ ian Ingerslev and Andrew Wiseman, LBS

students, who conducted the f ieldwork and deskresearch, also by Souna Kang, of People in Busi-ness, who helped with the drafting of this paper.

APPENDIX A - PARTICIPATING COMPANIES

ABBArthur Anclersen & Co.AT KearneyAutomobile AssociationBain & CompanyBoston Consulting GroupBTCoutts & Co.Deutsche Morgan GrenfellGlaxo WellcomeGuinnessHenderson AdministrationICLING Barings

Lazard Bros & Co.Marks & SpencerMcDonaldsMcKinsey & Co.National V/estminster GroupPizza Hut (UK)Post Ofhce CountersReebok, ChinaSalomon BrothersThreadneedle Asset Management'Waterstones BooksellersWH SmithWhitbread

Page 19: Primer Articulo sobre employer branding 1996

APPENDIX B - INTERVIEW GUIDE

We would like to ask your viervs on hor'v the HR functiolr manages things like employee

relationships, and your firmt reputation as an employer both internally and externally.

Existence of the Employer Brand'What

language do you use internally, if you do, to describe the asset that is the firm's

reputation as an employer?How would you describe thisHorv would you describe this

Who are your main competitors and how would you describe therrDo different areas with the organisation have a differentHow and why do you think they might differ?

Components of the Employer BrandWhat do you feel is the basis of people wanting to continue or start working for yourcompany? Could you rank these from L down to 4? Two lists might be appropriate.If you were to go about building this what are the key elements of theprocess?How does thisWhat do you think are the parallels between this and your sales?

Why do you think that they should be different?

How long do you think it takes to build an effective

how long to destroy it?and conversely

for people working in the firm?for candidates?

dilfer from an organisationt culture?

How would you describe awareness of your companyHow would describe the involvement of trust in this

What percentage of ernployment offers are accepted?

What is your turnover rate?

Is this

and attractiveness?? (See Aaker,1995.)

The importance of Employer Brand in your companyWhat do you think are the key determinants of an effective staffmember? Rank from

1 down to 4.

How would you describe the effect of the for those already in

the job?

Is this becoming more important than in the past?

able to increase retention? Whv?

lnfluences on HR polacyWhich execurives in your organisation get involved in setting the human resource

strategy?How is the budget for the human resources department determined?

Horv is the amount of funding for recruidng marketing determined?

Positioning of the Employer BrandWho is your target market for thisdown to 4.Horv often do these target markets change?

internally and externally? Rank from l

Page 20: Primer Articulo sobre employer branding 1996

AppENDtX B - INTERVIEW GUTDE (CONTTNUED)'What is the target market for your competitor?'Who

is better, )'ou or your competitor, at attracting the best candidates?What is your firm's salary position within the industry and overall? Are these target markets

made explicit?

Measuring employee relationshipsHow does the organisation measure the performance of its human resources strategyand the performance of the human resources department?How do you measure the performance of the department?Is the perception of your firm as a place to work measured?\Xrhat budget do you spend on ? How do you measure the returnon this investment?How do you measure

Factors impeding the development of the firm's reputation as an employerWhat are common obstacles in creating and maintaining thisinternally and externally? Rank from 1 down to 4.Does the firm have a centralHow does the

which transcends cultural boundaries?

How does thisdiffer according to locale?track social trends?

Interviewee details

Title:Approximate age:Years at company:Years in human resources/present function:Reports to:Size of human resources departrnent:People hired per year:Nunrber of employees in company:Revenues:Profits:Position in industry:Type of company (individual, national, multinational):Location:Proportion of entry level, middle level and senior positions hired for?What is the proportion of positions hired by role (eg, front office by departmentand support staff)?Industry sector:

Page 21: Primer Articulo sobre employer branding 1996

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