in-class assignment - Literature Review Employer Branding

From an employer’s perspective, this comprises the creation of an attractive and positive image for internal and external target groups (potential, actual, as well as former employees), e.g. through strategic recruitment and retention. In his definition of EB, Sullivan (2004) also focuses on these aspects: “[EB] is a targeted, long term strategy to manage the awareness and perceptions of employees, potential employees, and related stakeholders with regards to a particular firm. The strategy can be tuned to drive recruitment, retention, and productivity management efforts.” Barrow & Moseley (2005) more generally describe EB as a “strong corporate brand umbrella, hosting the employer brand as well as the customer brand”. This view incorporates the customer brand as an important factor in attracting the right people to the company.

The functions of EB, described from all relevant perspectives, can be summarized from the literature as follows:

As mentioned above, the forming of preferences has to be one of the important functions of EB. It stands for the creation of an Employment Value Proposition (EVP) and makes sure the company is not perceived as an anonymous institution, but has built a strong preference amongst target groups (Stotz & Wendel, 2009). EB also plays an important role in the reduction of costs; if people apply whose personality and value systems more precisely reflect those of the company, costs caused by inapt applicants will automatically be lower (Wiese, 2005). Through raising the identification of employees with the company, retention rates will also increase, which will again lead to reduced costs through lower fluctuation rates.

From an employee’s perspective, EB can represent orientation; information is made more accessible through an emotional and functional brand. For many (potential) applicants, trust plays an important role. Choosing an employer can be a risky undertaking – it is often only discovered later on if expectations can and will be met. By communicating the brand clearly, trust can be created. Another major function of EB is the aspect of identification, describing the match of a company’s and of a (potential) employee’s values. An employer brand can communicate certain values and therefore create a selection process. People with the same value or belief system are more likely to apply. Higher identification can also lead to loyalty and employees that identify themselves with the company are usually happier (Schirmer, 2007). As for any branding activities, it is crucial that all EB measures are communicated consistently and that the strategy is authentic and in no way harmful to the employer image (ibd.).

In order to successfully and strategically position an employer brand, preference building has to be taking into consideration; the term “Employer of Choice” equals the favored or even favorite employer. Preference building has its origins in consumer research and was adapted by EB. Allreck and Settle (1999) defined six modes for building preferences and to answer the ever-important question “How will my prospective consumers develop their preferences for my brand?” The answer to this question can help to build preferences that lead to greater loyalty trough one or more of the following modes:

· Need association – the product or brand is linked to one need through repeated association;

· Mood association – the mood is attached to the product or brand through repeated association;

· Subconscious motivation – suggestive symbols are used to excite consumers’ subconscious motives;

· Behavior modification – consumers are conditioned to buy the brand by manipulating cues and rewards;

· Cognitive processing – perceptual and cognitive barriers are penetrated to create favorable attitudes;

· Model emulation – idealized social lifestyle models are presented for consumer to emulate.

The modes have their origins in theories and perspectives on human learning in the fields of psychology, e.g. conditioning as researched by Pavlov and others.

Although consumers might have similar preferences for a certain brand through different modes, certain modes are more effective for a given type of product or service. When adapted to EB, this means that the most effective ways for creating preferences towards a certain employer have yet to be determined (Allreck&Settle, 1999).

In this context, cognitive processing (Blythe, 1997) has to be considered. The more important a purchase is to a consumer, the more likely the preferences will stem from cognitive processing. The brand-preference building mode is most likely to apply to choices where the consumer is highly involved in the decision process. These attitudes are composed of two main parts:

1. The consumer’s knowledge or beliefs about the product, and

2. Their positive or negative evaluations of it.

When applying this theoretical concept to EB, it becomes evident that the decision-making process for or against an employer demands very high involvement as it has a direct impact on a “consumer’s” (or in the context of EB, employee’s / applicant’s) livelihood. Therefore, forming the beliefs and evaluations towards an employer brand has to be one of the key goals of preference building in an EB context.

The models introduced above clarify that brand awareness is an important factor for attracting potential employees. The brand claim has to be authentic and congruent. Mismatches in active communication, available information on the employer, and direct contact have to be avoided.