Strategic Employment Branding:

Achieving Competitive Advantage in the Human Capital Market by Jeffrey Hodes

Strategic Employment Branding:

Achieving Competitive Advantage in the Human Capital Market

Introduction

I.

Grappling with the People Issue 3 Recent developments and initiatives in human resource management

II.

Competitive Advantage through Strategic Employment Branding 4 How Strategic Employment Branding can be a powerful tool in the war for talent

III.

The Strategic Employment Branding Cycle 7 Assessing, strategizing, implementing and measuring the Employment Brand

IV.

The Strategic Employment Brand in Action 10 A holistic approach to living the Employment Brand

V.

Summary A consolidated framework for action

15

References

16

Introduction

usiness competition, and the strategic necessity to find and retain the right employees, has never been fiercer than it is today. Indeed, even with the changing economic landscape and the considerable shifts in employment statistics, the difference between winners and losers for most industries in the marketplace has been narrowed down to one or two major strategic decisions. Determining how to manage human capital has been one of those critical strategic decisions for many companies.

Cisco Systems, the leading developer of Internet infrastructure, has catapulted to huge success over the last five years by acquiring (purchasing) and integrating intellectual capital. Microsoft Corporation and Wang Laboratories, both promising young companies in the early 1980s, followed divergent people resource strategies and fates: Wang, unfocused on coordinating and motivating its fastgrowing employee base, lost control when its top engineers began leaving in 1988; Microsoft, on the other hand, went on to become the strongest software company in the world, propelled by a peerless group of talented, motivated and team-oriented employees. Finally, Southwest Airlines has found unheard-of success in the sluggish airline industry because of its unique approach to utilizing and managing its people resources. While the rest of the industry has struggled with union disputes, increasing salary costs and low levels of customer service, Southwest has kept its employees motivated on lower salaries and has maintained the highest levels of customer service in the industry. Its stock price has been no slouch either, rising 460% over the past 5 years compared to 20% for the rest of the airline industry. It is not an accident that human resource issues have become so poignant. People workand think about workin fundamentally new ways today. They get merged, acquired and downsizedso they are proactive about developing their careers, no longer relying on a single lifetime employer. They use the Internet, laptops and pocket PCs to communicateso they seek flexible organizations, and the freedom to work whenever and from wherever they want. Employers demand that their employees do more, and do it better and faster; in turn, employees demand more ownership and better perks from their employers. And they have

access to new ideas, technologies and capitalso they flee the corporate monoliths sooner, often to launch vigorous, industry-changing companies. Karl Marx offered a powerful insight into the dynamic behind these changes, and we dont have to accept his political theory to recognize it: that the manner in which a society works shapes most of the other things the society believes and does. Fortunately, many business leaders are coming to grips with this insight. They are looking to the human resources function to help frame effective organizations. Innovative approaches to attracting, hiring and retaining quality people are multiplying. Virtual and highly mobile organization structures are spreading. And spurring progress, the invisible hand of the market is weeding out the slow-tochange. Despite these developments, companies are still not finding it easy to develop a successful staffing strategy. Hiring managers and human resources professionals can attest to the difficulty of developing a human capital advantage, while maintaining and retaining one is harder still. But there is a bright side to this situation: As a result of these barriers, some companies will ultimately gain a significant strategic advantage through human resources. The very difficulty of this endeavor makes it a terrific opportunity and potential competitive advantage. It also implies that chief executive officers will increasingly call upon human resources managers to generate and implement effective staffing solutions as a part of overall business strategy. There have been many recent contributions to staffing theory and practice. Through this paper, I will first highlight some of these recent ideas and initiatives, and discuss the nascent concept of employment branding. Next, in section II, I will suggest how companies can improve their staffing effectiveness by pursuing a more comprehensive and strategic process of employment branding. Section III will offer guidance on how to design an appropriate employment brand for your individual company. Section IV will look at the employment brand in action: a discussion of the implications employment branding has on the firm-employee relationship. Lastly, section V will summarize key points and offer practical steps to building your employment brand into a powerful and lasting competitive advantage. Throughout this paper, it's important to recognize one important concept: Employment recruitment and retention are two sides of the same coinand that coin is strategic employment branding. When you develop your employment brand, and take steps to leverage that brand to your future and current workforce, you are promoting that brand both externally and internally. When you promote the brand externally, that's recruitment. When you promote the brand internally, that's retention. And how you choose to develop both sides of this coin will ultimately determine if you and your company can achieve a competitive advantage in the labor market.

I. Grappling with the People Issue

Recent developments and issues in human resource management When you consider its rather humble beginnings in employee benefits and the culture of compliance, the evolution of human resource management to the forefront of strategic management is fascinating. Simply stated, there has never been a better time to be in human resource management. New terminology and titles have accompanied this development. Companies now manage their human capital. They fight the war for talent by identifying an employment value proposition and workforce diagnostics before aggressively promoting themselves as an employer of choice. Human resource management positions now boast exciting new monikers, led by the likes of Agilent Technologys Chief Talent Officer, and Southwest Airlines Vice President of People. Of course, the progress is not really about buzz words and fancy titles. In both hot and cool economies, where competition for skilled employees at all levels is driven by secular economic trends as well as temporary supply and demand imbalances, companies are aggressively taking action to put together and retain an effective workforce. Consider these examples: In an effort to identify external talent quickly, companies are tapping radically new pools of labor. McKinsey & Company new hires used to be all MBAs; now, 40% are lawyers, doctors, economists, scientists, military officers and government officials. Hewlett-Packard provides summer internships and part-time jobs to hundreds of high school and college students, many of whom join the company on a full-time basis upon graduation. GE hires an average of 325 military officers per year. Compaq reviews SAT scores and tracks high school students who are their future engineers. To compete for top external talent, companies are also developing agency-like candidate sourcing teams. Using new tools (the Internet, for example) and traditional ones (professional associations), these teams proactively and continuously identify strong external prospects, often from specific competitors. In the high technology sector, competitive intelligence efforts by these teams are extremely intense.

Another favorite sourcing measure has been the employee referral program. Some companies are using it creatively. UBS Paine Webber recently introduced e-Volution, a fully online, easy to use employee referral program that they believe will shave additional time and money off the hiring process. Identifying good people is only part of the battle. To attract them, firms are changing their compensation and benefit plans, and offering alternative working arrangements. Telecommuting, flexible hours, job sharing, on-site concierge services, day care and domestic partner benefits are some of the benefits now being offered in response to employee demands for work/life balance. Personalized, flexible compensation packages have also become the norm for many firms. Media advertising has grown as well. Companies are putting more emphasis on image advertising and less emphasis on simple job listings. Reflecting the growth of the Internet, most recruitment ads now point readers to a company Web site for detailed job specifications and electronic resume submission. Companies have made strides to retain their employees. Labor is in high demand, job information is ubiquitous, and employee loyalty is low. So retention is a tremendous challenge. Companies have responded with new schemes for organizing, recognizing, rewarding and developing their best people, including management training programs, fast-track programs and greater lateral mobility. There is no shortage of novel ideas. Companies are using more techniques to recruit and retain than they ever have before. Some are recognized for their best practices in this area. But are these efforts enough to produce a sustainable advantage in the marketplace? A 1998 McKinsey & Company1 study revealed that companies winning at hiring and retaining great people are not necessarily excelling at HR best practices (in fact, their best practices have been replicated at other companies).2 Rather, they are winning because they either have an outstanding value proposition (great mission, high growth, exciting jobs)* or a strong performance image (which leverages the fact that winners want to play on a winning team).

Obviously, this conclusion has major implications to human resource strategy.

* In its 1998 study, The War for Talent, McKinsey identifies three key dimensions to a companys value proposition: compensation and lifestyle, great company, great jobs. Others break down the value proposition (also called employment proposition) differently. The Corporate Leadership Council, for example, breaks it down into five dimensions in its December 1999 study, The Employment Brand: company culture and environment, product brand strength, compensation and benefits, work environment, and work-life balance. Although the frameworks are different, the underlying substance is essentially the same.

company's objectives. In a tight labor market, employment competition increases; in a slower economy, this competition may decrease somewhat but it never disappears completely. In today's fluid employment environment, companies feel intense pressure to better define and promote their employment attributes, both internally to current employees and externally to prospective employees. This process has come to be known as employment branding. The goal of employment branding is to create an effective employment brand, a package of employment attributes that is readily identified with the company, and that serves to attract and retain a desirable workforce. According to London-based People in Business, one of the early consultancies to work on employment branding, this package of attributes consists of functional, economic and psychological benefits of working for a company. Companies that develop and promote these attributes manage, understand and value [their] employees with the care and coherence the marketing department would employ in the case of a valued customer.3 Employment branding is a relatively new concept, one that came to the fore during a protracted period of labor shortage that started in the mid-90s. The concept of employment branding pushed aside the more widely used employer image or image advertising that had been around since the early 70s. However, its important to note that the concept of branding is not interchangeable with image advertising. There is a big difference between the two in terms of breadth, depth, timelines, expenditures and return on investment. Corporate Leadership Council research has found that the formulation of specific strategies and models for developing employment brands are still under fierce debate and discussion among consultants and the few companies that are attempting to develop a distinct [employment] brand.4 Nevertheless, no one doubts that branding has become pervasive as a topic. Branding has replaced ad campaigns as the focal point of year-to-year strategy and every day discussions between employment people and their ad agencies, while HR conferences and workshops are certain to include it. And two factors appear to be driving the emergence of employer brands.

Branded productslike Colgate toothpaste, HarleyDavidson motorcycles and GE applianceshave highly visible value propositions or performance images. They create customer loyalty and, in turn, growth. These brands were carefully built over time and they are passionately protected by their parent companies. When Johnson & Johnsons Tylenol brand pain reliever faced a cyanide scare in the mid 1980s, J&J pulled every single bottle off U.S. retail shelves even though the problem was limited to a specific geographic area. At great short-term cost, J&J did this to protect its brands image. In employment markets, as in product markets, the brand is king. People (consumers) buy into great employment brands (products). Much like a product in traditional markets, the employer must meet consumer preferences, be differentiated from competing alternatives, and have a strong reputation in order to get the people it desires. Few companies, however, have integrated this insight into their business strategy. Can we think of any company that has invested nearly as much into its employment brand as Johnson & Johnson, Colgate and GE have invested into their product brands? The companies that do, however, can expect to gain human resource advantages comparable to those that products get from established brands. The following section explains how in more detail.

II. Competitive Advantage through Strategic Employment Branding

How Strategic Employment Branding can be a powerful tool in the war for talent In any economic environment, companies compete to hire and retain the right peoplethe top talent, the one person who will best fit into an organization's culture and match up with the core competencies of a

First, the shift from image to brand is significant because it was born of a worldwide and widespread shortage of talent. Labor shortages created larger advertising budgets, which caught the eye of marketing executives in companies of all sizes. As marketing comes to assist the HR department, marketing tools are adopted by the HR team. Second, the timelessness of a brand is well suited to the hiring and retention problems we face today. There is a well-grounded sense that todays layoffs are a temporary solution to short-term business needs, but will only exacerbate the long-term problems that result when demographics fall short of growth in jobs. Shortages will be back. And though branding was initially driven by a labor shortage, the emergent importance of the employer brand will not diminish at all during the current acute slow-down in employment. Why? Because today, regardless of hiring needs, every employer can use branding as a guide to their employee communications and as a platform for their relationship with talented candidates who reside patiently in databases. The real cost of branding lies in the work companies must do to study their business, their employees, their candidates and the competition. Companies must work hard to find the succinct truths within each organizationtruths that will last through economic volatility. And the strength that companies gain by articulating and communicating their brand becomes even more effective when budgets are shrinking. One good example of a company that is setting out on this path is GlaxoSmithKline (GSK)the resultant merger between SmithKline Beecham and Glaxo Welcome. In its infancy, GSK sought to manage branding messages before they could grow organically and take on the personas of either SmithKline Beecham or Glaxo Welcome. Through a structured brand development process, the company intends to define and deliver a new global employment brand. Slated to roll out in the Fall of 2001, the new GSK brand reflects not only the vision of the new corporate brand, but also reflects and supports the behavior and values of its employees. The Strategic Employment Branding Process Most established companies spend money generating awareness about themselves and their jobs, if not developing an official employment brand. They use

various media to create this de facto employment brand, including newspaper classifieds, Internet banners, company Web sites and word-of-mouth. A large company can easily spend millions of dollars per year promoting not only their specific job openings, but in some cases, how well they compensate, how well they treat employees, and information on various other benefits. In spite of these efforts, most de facto employment brands are weak and indistinguishable. Consider powerful product brands such as Coca-Cola, Kelloggs and BMW. These brands generate strong images and evoke feelings about their associated products that make them special and desirable. Few, if any, employment brands have the same power and intensity as these product brands do. In the past, this was justified by relatively uncompetitive employment market conditions. However, todays employment market conditions justify strong, effective employment brands. Most companies, though, continue to fall short by not taking a strategic approach to their employment branding efforts. As a result, they are missing their ultimate potentiala competitive advantage in the employment marketplace. Companies have learned from successful product branding experience that good strategy begins with positioning and results in differentiation.5 Positioning defines those positions that a company wants to occupy in its competitive market, whether its a product market or an employment market. Companies vying for the same pool of labor cannot share the same positions. Otherwise, the positions become marginalized and add little value to the employment proposition. Lets take fictitious company GenericCo, which competes in a specific employment market. GenericCo chooses to offer higher salaries than any of its competitors in this employment market. Here, salary is the companys strategic position. And in the short run, it would seem to give the company a competitive advantage. All else equal, workers will be more inclined to seek employment at GenericCo than at any others in the market. In the long run, however, others will also offer higher salaries, or higher bonuses, or some other compensation solution. These strategic reactions will ultimately negate the competitive advantage GenericCo first enjoyed.

Believe it or not, this effect occurs quite frequently. Without thought to positioning, companies offer and promote employment attributes that are highly transferable in competitive industries. Most firms can pay more, most can offer a new type of benefit, and most can offer longer vacation time or even flexible work hours. If an advantage is gained through any of these attributes, it is transient. So positioning matters. Successful positioning results in sustained differentiationthe basis of competitive advantage. But positioning is not necessarily easy. Occupying a differentiated position entails producing and delivering differentiated employment attributes. By definition, these attributes are hard to come by. If they werent, they would be easily replicated. So what positions should my company consider in its employment markets, and how should we get there? This question is the very beginning of the strategic employment branding process. The strategic employment branding process starts by looking within the firm. The firm must understand its attributes as an employer. These attributes may be in the form of values and culture (low stress, exciting jobs, fast career development, etc.), as well as practical characteristics (accessible by mass transportation, desirable geographic location, financial stability, etc.). Then it must consider the employment market landscape and ask the following questions: Of these existing attributes, which ones differentiate us from our employment market competitors? Which ones (in isolation or in combination) are sufficiently proprietary or unique to us so that they cannot be easily copied? Can my combination of attributes be condensed into a simple yet powerful message? Are we lacking attributes that we feel are critical to our positioning in the employment market? If so, can we realistically develop these attributes? The objective of this activity is to leverage the firms core employment strengths and to identify opportunities to develop additional core strengths; then, to select a market position on the basis of clarity and sustainable differentiation. The next section of this paper

will explain how to accomplish this all-important, yet oft neglected, first step called assessment. When it has decided on its position, the firm must go about developing its employment brand. This involves three additional stepsstrategizing, implementing and measuringthat will also be detailed in the next section. If positioned and developed properly, the employment brand can be the most powerful weapon the firm has in the war for talent: 1. By virtue of its differentiated position in the employment market, the company will attract more people than other undistinguished firms will. 2. Because its position is tailored and focused, the company will attract the people it wants to attract: people who share its values, culture and priorities. 3. When the company lives up to its brand image, it not only retains its people, it also motivates and energizes them. 4. The brand will make the company less reliant on expensive marginal employment attributes such as compensation and benefits. Clearly, these summarize the employment brands primary value. The icing on the cake, however, is that the employment brand can contribute to a firms competitive advantage in yet another significant wayby limiting agency costs. More specifically, the employment brand mitigates the two most common types of agency costs: adverse selection and moral hazard. Since agency costs are little understood outside of the academic world of organizational economics, a brief discussion of these issues follows and the concept of agency costs will hereafter be referred to simply as company costs. Controlling Company Costs Candidates are sometimes inclined to misrepresent themselves during the interview process by claiming skills, knowledge, achievements or other advantages that firms cannot easily verify. This problem results in adverse selection, the hiring of underqualified or misqualified employees. At times, employees also shirk their responsibilities and fail to put forth the effort they agreed to upon hire. This is moral hazard. Moral hazard is unpredictable and is often the simple result of an employee acting selfishly and opportunistically.

However, a poor manager or unorganized department may also contribute to moral hazard activity by hurting employee morale.

III.The Strategic Employment Branding Cycle

Assessing, strategizing, implementing and measuring the Employment Brand Assessment Companies that do not know what their employment attributes are, or what they should be, enter the cycle at the assessment stage. Here, the firm assesses its actual and perceived employment attributes based on feedback from its direct constituenciesemployees and prospective employees. The firm also looks at its competitive landscape to assess its competitors employment attributes. Note that the firms employment market may differ from its product or service market. In other words, the firm may compete for human resources against a different set of companies than it does for product market share. Therefore, the firms competitive landscape is the employment market in which it competes, not its product (service) market. The firm can attain a comprehensive view of its perceived employment attributes through a combination of segmented surveys and focus groups. Surveys can be mail, phone or Internet-based, and are best suited for descriptive research. Participants should include current employees, past employees and a sampling of outside professionals in the firms employment market. Focus groups of employees and outside professionals can subsequently be used to gather more detailed and qualified information. Gifts of moderate value should be used to incentivize participation. This research is quite important. Top managers may misperceive or overstate the firms employment attributes because of their insular positions. They also may receive perks and benefits that others in the firm do not, further skewing their perceptions. Without gathering detailed and qualified data, managers are unlikely to make an accurate assessment of what the firm has to offer to employees and prospective employees. Assessment does not end here, however. The firm should use the same research techniques to assess its employment market competitors. In this regard, former employees (those who fled to a competitor)

may be especially insightful sources of information. While reviewing the competitive landscape, particular attention should be paid to competitors employer brand positioning. How effective are they in those positions? What efforts is each competitor making to entrench itself in a particular position or to move itself to another? Once information is gathered on the firms attributes and its competitors attributes, it becomes the basis for an analysis that leads to decisions on how to position the firms employment brand. The information can be analyzed using any of several strategy frameworks. The SWOT framework (Strengths, Weaknesses, Opportunities, Threats) is one that can easily be adapted. First, the firm identifies its employment attribute strengths and weaknesses. Then the firm identifies possible positions for its employment brand in the context of the competitive landscape. After considering competitor threats, the firm can select among these possibilities a position that builds upon its strengths and provides maximum opportunity for sustainable differentiation.*6
* Understanding competitor positions and threats is a critical part of the assessment stage. This can be accomplished by an exercise similar to the one General Electric instituted under Chairman Jack Welch. In GE's exercise, called Destroy Your Business (DYB), each business unit assembles a cross-functional team that benchmarks competitors and examines how they operate. Then, each team presents GE's top executives with a hypothetical business plan that a competitor could use to essentially destroy GE's customer base. In addition, the teams propose how they would change their existing business models in response to these threats. This exercise helps GE develop very practical and reality-based strategic plans. Likewise, employment branding strategy should be based on realistic analyses of competitor threats.

One caveat exists. During its assessment and analysis, the firm invariably observes that different employees have different perspectives and opinions about the firms employment attributes. With respect to its choice of brand position, no firm can be all things to all people. Sometimes in order to attract a certain type of person, the firm will resultantly (inadvertently) turn off another type who tends to work in a function or professional field that is critical to the company. For example, a company with an aggressive output-oriented culture may attract great salespeople, but repel scientists who take a more methodical and deliberate approach to their work. Like the pharmaceutical company that requires a great sales force and a top-notch R&D function, many firms face this challenge. They must recognize the paradoxical needs

among their different types (levels, positions, functions, work requirements) of employees. In the end, however, SWOT and other strategy frameworks enable the firm to use its assessment information to make well-thought-out and practical decisions on employment brand positioning. During this assessment stage, and in the upcoming strategy stage, it is imperative to align the employer brand with the overall corporate brand. Some argue vigorously that companies really only have one brand that is segmented to different audiences. Companies generally manage their brand identification across four audiences: customers and potential customers; business partners and the trade community; investors and the investment community; and employees and potential employees. Whether the employer brand is simply a segment of the overall brand or a sub-brand is really an issue of semantics. What is clear is the importance of developing a comprehensive branding strategy that leverages the equity of the Brand ID across all four of these audience segments. And while there will likely be opportunities to keep some of the messaging consistent, the fact is that all four of these markets are highly specialized and the actual value proposition will likely differ between each. Strategy Once a firm defines the brand position it wishes to occupy, it must strategize to determine how it will get there. This stage has a creative side and a practical side. The company must create a message. Then it must figure out how to get the message across to its target audience. Employment branding has a distinct marketing flair to it, and should be planned for in similar fashion to product marketing. Most successful marketers know that marketing is not a battle of products, but a battle of perceptions.7 Likewise, successful employment branding is more about affecting the prospective employees perceptions than it is about overhauling the company. The 22 Immutable Laws of Marketing (authored by Al Ries and Jack Trout in 1993) and The 22 Immutable Laws of Branding (authored by Al and Laura Ries in 1994) outline what many believe to be the crucial elements to creating a powerful marketing message. These elements must be just as thoughtfully and systematically applied to employment branding as they are to product marketing.

Once the message is determined, it has to be effectively delivered. Here again, a systematic and ongoing approach to communicating and promoting the message must be applied. Even companies that have been highly successful at promoting their product brands have traditionally fallen far short in doing the same for their employment brands. Employment branding cannot be a fair-weather project. The stakes are too high. Long-term costs associated with the branding effort should be identified and budgeted for up front. Just as importantly, managers must resist the temptation to back off from the branding effort when pressured to control costs. In the long run, even the strongest of brands will not overcome a poor organization. Employment brand perceptions are leveraged by peoples experiences. Companies must strive to live their brands. This is no easy task. It requires policy change, organizational change and cultural changeusually over a long period of time. The firm should address these issues in the planning stage by analyzing its options in terms of cost versus benefit, and then by generating support among key leaders. Company leaders should be able to envision the company living the brand it chooses to create. If they cannot, the company should do a reassessment, recognize its constraints, and reselect a position that is attainable. Implementation Among its brand-building activities, the firm will execute marketing programs and communication materials targeted to both external and internal audiences. To maximize the brands reach, a variety of effective media and channels should be utilized. Which specific media/channels to utilizeand how many resources to allocate to eachis a strategy decision predicated on the firms unique branding needs. And while no two companies will utilize the same exact mix, they will likely choose from the following broad selection: Recruitment Advertising Internet Newspaper Newsletter Radio Direct Mail Cinema / Theater Trade Journal Cable Television Outdoor / Mall Transit

Employee Communications Referral Program Recognition Program Orientation Materials Brochures, Flyers, Posters Company Intranet Promotional & Specialty Video Production Premiums Exhibit / Display Unit Multimedia Presentation Event Marketing Career / Job Fair Telemarketing Open House Trade Show / Conference Special Events (Sporting) Online Company Web Site Direct E-mail Events & Promotions Banner Advertising Content Sponsorship College Relations Image Advertising Brochures & Binders On-Campus Promotions Sponsorships Implementation is the follow-through of strategy, and thus appears simple enough. However, it is often the stage where processes fall short, as companies fail to deliver the time, effort and resources required to fully implement their well-conceived plans. Corporate strategic plans often fight for prioritization, and many end up never getting the necessary support to get off

the ground. Even those that do face the risk of being cut short or executed unevenly. Effective branding does not occur overnight or by piecemeal application. It requires thorough and consistent execution. Employment branding simply will not work without the companys full, sustained commitment to implementation. In the next section, we will discuss the nature of the employment branding process using a simple and recognizable metaphormarriage. Like a successful marriage, a successful employment brand creates a dynamic and evolving relationship between two parties; like a failed marriage, a poor employment brand creates a static and unimpressive relationship. And as with people, employment brands stand the risk of getting a bad reputation if they fail to deliver on their promises. Measurement Implementation, however, is not a guarantee of success. The best plans have failed before, and will again. In employment branding, there are a number of external and internal factors that can influence the brands efficacy: A competitor positioning itself in the desired brand space first; An advertising campaign that inadvertently sends the wrong message; Core business problems resulting in layoffs and restructuring. Any of these and other factors can derail the employment branding effort. The firm that is implementing an employment brand must regularly step back and ask itself these critical questions: Are we creating the brand we want to create? How are peoples perceptions changing as a result of our branding efforts? Is the brand achieving the perceptual effects we want it to have? What factors are currently affecting our brand?

The Strategic Employment Branding Cycle*

ASSESSMENT

MEASUREMENT

STRATEGY

IMPLEMENTATION
* It should be noted that this 360-degree cycle is useful to strategic processes and initiatives of various sorts. We use this framework because it applies very well to the process of employment branding.

In part, these questions can be answered anecdotally. However, measurement tools should be used to supplement and quantify the anecdotal evidence. Again, surveys and focus groups are effective tools and can make use of various media (Internet, direct mail, feedback cards, etc.) to reach their intended audiences. Measurement closes the loop in the Strategic Employment Branding cycle. Measurement reveals new information to the firm and begs it to ask the question, how should we adjust our strategy to improve the brand? The answer to this question not only sets the stage for a new cycle in the Strategic Employment Branding process, but also helps the firm evaluate its relationship with collaborating vendors (including Employment Marketing & Communications firms, discussed below). Armed with information, the firm reassesses its strategy and key supporting vendors, and thus begins a new cycle in the Strategic Employment Branding process. This cyclical process results in continuous improvement of the employment brand, and enables it to maintain or improve the competitive advantage it provides to the firm. The Role of Firms Specializing in Employment Marketing & Communications The Strategic Employment Branding cycle requires competencies that most firms do not have, and activities that they are simply unable to undertake alone. Firms specializing in employment marketing and communications can assist in this process. Each stage of the cycle can take advantage of tools and competencies that they offer. In the assessment stage, these marketing and communications firms specialize in design, implementation and analysis of surveys and focus groups. This includes administration of all logistics and technology, including computer (Internet)-based surveys. In the strategy stage, these firms are strong in the creative development of brands. They select and integrate the images, words and other creative elements that enable brands to stand out clearly and to effectively reach a desired position. In the implementation stage, a marketing and communications firm can help clients select and utilize the media channels that are best suited to reach desired

audiencesthis is both a strategic and tactical valueadd to brand implementation. And they design corporate Web sites for branding functionality and use their media experience to help clients make informed channel decisions. On a tactical level, there are a number of administrative and logistical efforts involved in these communications which clients are eager to offload to a third party. The measurement stage involves tactical and analytical work in the form of follow-up surveys and studies. Firms specializing in employment marketing and communications are experienced at conducting the surveys, reporting the results, and then consulting on what the clients response should be.

IV. The Strategic Employment Brand in Action

A holistic approach to living the Employment Brand The employment brands magic lies in the relationship it fosters between the firm and its employees. This relationship starts before a person is even employed and is built over a series of stages, resembling the marriage relationship process human couples undergo. A marriage can be understood as a series of bond-building experiences. These experiences, in most cases, serve to strengthen and preserve the relationship between couples. Similarly, companies have the ability to create bonding experiences for employees. These bonding experiences strengthen the employees commitment and feelings toward the firm. The marriage metaphor helps explain the firmemployee relationship stages more completely, and provides firms with a valuable guide on how to create an effective marriage with their employees. The six relationship stages in this metaphor can be classified as: First Contact; The Dating Game; Proposal; Marriage; Maintaining the Passion; and Anniversary. A brief discussion of each stage follows. The Firm-Employee Relationship Cycle: First Contact In the past, graduating students and established business professionals sought employment from a handful of blue-chip employers such as AT&T, General Motors, Xerox and Arthur Andersen. For these companies, hiring the best and brightestand grooming

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The Firm-Employee Relationship Cycle

FIRST CONTACT

ANNIVERSARY

THE DATING GAME

MAINTAINING THE PASSION

PROPOSAL

MARRIAGE

them for life-long careerswas a fait accompli. In short, attracting desirable candidates was a non-issue. But the rules, as we know, have changed. Success no longer belongs to a cadre of large, stable and well-known companies. Firms leave and enter the list of success companies frequently and forcefully. Large companies lay people off in droves, and startups grow by leaps and bounds. The marketplace of products, brands and employers has crowded. And the best and brightest no longer flock, but flow between companies, industries, technologies and opportunities that meet their frequently changing needs and expectations. Considering the numerous employment choices available to todays highly mobile workforce, the adage theres no second chance to make a first impression is particularly applicable. Firms must capture attention in the crowded and competitive employment marketplace, and simultaneously generate prospect interest. The prospective candidates who get away are often lost forever. They simply have too many options to choose from. The importance of competitive positioning cannot be overstated. Many companies today are able to provide empirical evidence of business success and can afford to pay people well. To stand out, an individual firm must deliver a unique and focused message. And to capture the continued interest of a prospective candidate, the firms choice of message and delivery must be memorable.

Firms can use advertising campaigns, public relations, brochures and word-of-mouth to promote their brands. But the crowded nature of the employment marketplace means that a firm must do more than simply put the brand in front of people to be successful at first contact. First, it must constantly innovate in the way it delivers its message, and not just rely on traditional channels. Second, it must have a message for passive job seekers, not just for active ones. To the extent that the firm reaches out successfully to this vast group of people and plants seeds for future relations, it will gain a long-run advantage. The bottom line: successful first contact is more a function of the brands message than of the brands ubiquity. The Dating Game After successful first contact, the prospective candidate and firm begin the dating gamea period during which both parties explore the potential for an employment relationship. The prospect, at this point, seeks deeper information about the company and its opportunities. Since his interest and time are valuable (and are in demand by other firms), he wants to conduct this due diligence as efficientlythoroughly and quicklyas possible. If he concludes that the fit is not right for him, he will self-select himself out of the relationshipbuilding process. If, on the other hand, he finds he has continued interest in the firm, he will seek to pursue the relationship-building process further.

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The firms interests are similar. To the extent that the prospect is able to self-select himself in or out of the relationship-building process, the firm will save time and will be able to allocate its recruitment resources toward the right candidates. This is an opportunity that every firm should seek to exploit for one simple reason: good candidates are scarce and can be gobbled up very quickly by a competing firm. The firm should do everything, therefore, to enable its prospective candidates to gather helpful information quickly and easily. A possible outcome of the prospects research process is that he retains interest in the firm even while finding no suitable, or exciting, job opportunities immediately available. In this case, the firm should use its applicant tracking / hiring management system just as someone might use a little black booki.e., to keep tabs on prospects. Those phone screened for specific skills or experience (qualified prospects) should be kept on the hook by direct contact or through third party recruiters until both the firm and the prospect are ready to pursue serious discussions about an opportunity. The employment brand plays a key role in maintaining or developing the prospects interest during this potentially long pre-interview period. To the extent that the brand is memorable and uniqueand to the extent that the firm actively manages the fragile relationship it started with the prospectthe firm will be able to recapture candidates over the long run that it otherwise would have lost to competitors. Once the firm has a bonafide opportunity that is of interest to the prospect, both parties evaluate the match through the interviewing process. The prospect officially becomes a candidate. If the interviews go well, the firm should use its employment brand to sweep the candidate off his feet. One way the interviewer accomplishes this is by explaining the employment proposition in detail and by introducing the prospect to other employees who provide evidence of its veracity. To the extent that the firm applies other unique and exciting ways of solidifying the candidates interest, the firm will maximize its chances of taking the relationship further. Since a good candidate is likely to have other employment options available, this part of the dating game is both necessary and important. Obviously, the candidate could lose interest in the firm if what he sees and

hears does not accurately reflect the brand image. And losing a candidate at this point means the firm wasted a good amount of its time and resources. Thus, it makes good business sense for the company to not only design an effective brand, but to ensure that it lives it out and consistently applies it. Proposal The proposal is one of the most cherished experiences in a marriage relationship. Happily married couples look back to that occasion as a symbol of the enthusiasm and excitement they share for being with one another. Indeed, it is not only an important step in a couples relationship, but it is a source of inspiration and encouragement during times to come. Popping the question serves an equivalent (if not as passionate) role in solidifying the relationship between the firm and employee. The job offer is a chance to wow the prospective employeenot just with a higher salary, but with a better opportunity in life. And its delivery should reflect this new opportunity: unique, exciting and unforgettable. By so doing, the job offer represents the beginning of a new and terrific experience, and becomes a potential source of motivation and encouragement for the employee in the future. If the firms employment brand promotes a high quality employment experience, then the firms job proposals should be high quality. Unfortunately, this tends not be the case in reality. Regardless of their efforts at developing any sort of employment brand, most companies pay little attention to the way they present candidates their job offers. Not only are spelling mistakes and other type-oriented errors common, but most offers are made in standard, plainvanilla fashion. These represent more than poor form; they represent missed opportunities. There has never been a good excuse for poor followthrough or mistakes in the offer process. Given the benefits of a strong firm-employee relationship, there is also no reasonable business case for making a less than memorable offer. The process itself need not be complicated or costly. Just as with a marriage proposal, a little creativity and attention to detail are all that are necessary. The CEO of a small firm might personally call the candidate to invite him to join the team. A hiring manager at a larger company could

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make the job offer in person, while showing the candidate to his new office. Even an over-the-weekend phone call from the human resources person could demonstrate the firms excitement at bringing a candidate on-board. In short, the job offer is a simple yet potentially strong foundation to the firm-employee relationship. Marriage Once the job offer is accepted, the firm must welcome, orient and integrate the new employee. This should include effective pre-onboarding communication between the offer and the first day of employment. Unless its brand message amounts to sink or swimyoure on your own, the firm should take advantage of this opportunity to create bonding experiences, thereby deepening the firm-employee relationship. As with the job offer, an effective honeymoon period should not be difficult to provide. From the moment she/he walks in on the first day, the employee should be provided with his basic tools and provisions: desk, phone, computer, network connectionsanything he needs to do his work. As simple an assignment as this may seem, it is rarely carried out flawlessly. What this amounts to is a subtle message that the firm does not care. It stunts the firmemployee relationship and plants a seed of guardedness that can grow over time, contributing to moral hazard and other company costs. The firm should go beyond the basics, however, and do all that it can to create bonding experiences during the employees first couple of weeks. Firm-specific training, introductions to other team members, and a tour of the work site are just a few easy steps that can deepen the firm-employee relationship. The same issues discussed in the proposal stage apply here. Firms should take this stage seriously, as it has the power to have long-term effectsboth positive and negative. In general, the more quickly and completely a new employee is empowered and made to feel part of the firm, the more positive an impact the employee will have during his career there. The opposite is true as well. If an employee is not paid attention to, and does not develop a strong sense of belonging when he joins the firm, he is less likely to stay motivated and committed over time. Indeed, this persons

company will experience more problems in work quality, employee turnover and moral hazard than it otherwise should. Employees who genuinely feel part of the team are the ones most excited about being on it. So for each additional employee who feels this way, the firm receives two major rewards in return: first, a more loyal and committed workforce; second, a workforce that thinks and acts more like ambassadors. As a result, the Company will reap more and better employee referralsan added weapon in its war for talent. It is clear, then, that firms paying attention to this stage of the firm-employee relationship can reap significant, long-term benefits. Maintaining the Passion A firms hires will typically follow a statistically normal distribution of cruisers, losers and stars: some will turn out to be ineffectual, others natural superstars, while the majority will fall somewhere in between. The effectiveness of the employment brand will help determine the marginal commitment received from this vast middle group. If the brand promotes (and delivers) exciting opportunities, challenges and learnings, then it will deepen the firmemployee relationship. If the brand is weak, a higher proportion of employees will lose sight of the big picture, disengage from the companys mission, and ultimately breed turnover and company costs. The previous two relationship stages are easy for the firm to overlook; this one, on the other hand, is just plain difficult to do. Maintaining an employees passion does not occur over a short or finite period of time. Rather, it is the fulfillment of the brands promise over the entire course of an employees career. Indeed, it is the firm living out its employment brand. Making it more difficult still, there is no one formula that can be systematically applied to every employee. Instead, each employee has his own set of circumstances and career needs that requires a tailored response from the firm. Still, the upside to maintaining the passion is significant. This stage in the firm-employee relationship gives companies the best opportunity to distinguish their employment brands. The firm that is able to consistently deliver a quality employment experience to

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its people will find itself with a terrific competitive advantage. Characteristic of having a strong employment brand, the firms attraction and retention costs will go down; hire-quality and employee productivity will increase; and company costs will diminish. Anniversary Wedding anniversaries are times at which people remember their vows and renew their commitments. Similarly, firms must continuously measure and assess their effectiveness at following through with the commitments embedded in their employment brands. Couples do not use the anniversary to rethink whether or not they belong together. Rather, they use it to reflect on the actions they take to make their relationships work. Continuing this metaphor, a firm should not use the anniversary stage to reevaluate its employment brand. A reevaluation of this sort factors in external analysis and is part of the companys strategic employment branding cycle (see section 4, The Strategic Employment Branding Cycle). Instead, the firm should focus its attention inwardto assess how well it is doing at creating and living out its employment brand. The firm should ask itself: How well is the employment brand being utilized? How can we communicate it better? Whom is it reaching and whom is it not? What channels can we use to promote it more effectively? Are people getting the right messages or are they getting something different? More specifically, the firm should look at its effectiveness at each and every one of the firm-employee relationship stages, from first contact to maintaining the passion. The firm can use surveys, focus groups and other types of studies to get answers to these questions. The implication is that over time, the firms most successful at implementing their employment brandsand therefore, most able to gain the advantages of strategic employment brandingare the ones that continuously seek to learn and improve. The Role of the Internet The Internet is a powerful tool that has the power to enhance each of the six firm-employee relationship stages.

The Internets role in the first contact stage is most apparent. The careers portion of a firms corporate Web site is usually one of the most visited, and every visitor to a firms corporate Web site can be considered a potential employment candidate. Indeed, the opportunity to learn about a firms employment opportunities should always be easily and directly accessible from the home page. Many large and well-recognized companies have a rich supply of potential candidates perusing their corporate Web sites to learn about their products, view press releases or gather investment information. Many of these potential candidates have first contact with the firm as an employer by clicking through to the careers section of the corporate Web site. Other firms have to rely heavily on first contact drivers: job postings, banners, ads, posters and other marketing vehicles that serve to drive prospective candidates directly to the careers section of the firms corporate Web site. The corporate Web site, however, is more than just a primary source of general information on the company and its jobs. In the dating game stage, it can be an interactive tool capable of drawing prospective candidates closer to the company. If developed well, it can be a medium of interaction between prospective candidates and actual employees. It can also be a source of customizable informationinformation tailored to the specific interests and questions of each visitor to the site. Useful information, at any time, with access to real people behind the brand: this is the untapped potential of the corporate Web site. Companies that tap into this great resource will have an added advantage in their quest to attract desired candidates. Firms can make great use of the corporate Web site in the proposal and marriage stages as well. Candidates with offer-in-hand can be given access to a special section of the Web site that deals with common issues and questions regarding benefits, work schedules and company practices, among other things. A direct e-mail correspondence between the hiring department and the candidate could help close the deal. And Intranet-based connections with the firms human resources department help new employees complete basic paperwork and learn company policies more quickly.

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There are no magic ways to maintaining the passion in the firm-employee relationship, but the Intranet is a dynamic medium that can be used to foster interactive communication among groups and individuals within the firm. If the Intranet is built into everyday workflow, employees can use it to build interdepartment and inter-division work relationships. Human resources could use it to identify and react to employee development needs. Individuals could use it to collect, analyze and report appropriate data. And the firm can use it as a supportive virtual environment for practically every conceivable employee need, including the need for fun and enjoyment. Lastly, a firm can use the Internet to gather information relevant to the anniversary stage. To find out how well the employment brand is being lived out, the firm can survey employees through e-mail and through its Intranet. It could use its corporate Web site to solicit anonymous comments from candidates and prospective candidates. And it could monitor what people are saying about the firm on message boards at third party employer information Web sites such as Vault.com and WetFeet.com.

are equally important and should be followed sequentially and perpetually to ensure continuous improvement of the brand. The firm must: Assess: Identify its employment attributes, analyze them in context, and choose a brand position that provides opportunity for sustainable differentiation Strategize: Create a message and determine how to get it across to the target audience Implement: Execute its communication materials, ad campaigns, promotional events and other programs Measure: Gauge its effectiveness at creating a powerful and desirable brand Building a robust employment brand requires the company to focus not only on its employment strategy, but more fundamentally on its relationship with employees. The firm-employee relationship consists of bond-building experiences created over several stages. These experiences serve to create and maintain employee commitment. As a result, the firm benefits from overall higher productivity. The experience stages are: First Contact: Company proactively attracts targeted prospects The Dating Game: Company solidifies the prospects interest by explaining the employment proposition in detail, and by providing evidence of its veracity Proposal: Company wows the prospect with an exciting career and life opportunity Marriage: Company orients, welcomes and integrates the new employee, creating strong roots for the firmemployee relationship Maintaining The Passion: Company delivers on its promises of exciting new opportunities, challenges and learnings Anniversary: Company measures and assesses its relationship with the employee, and takes action to improve the relationship when possible

V. Summary
A consolidated framework for action Strategic employment branding is a proactive and powerful initiative a firm can pursue to achieve sustainable advantage in any labor environment, and especially competitive employment markets. It requires the company to take its recruitment efforts to an entirely different levelto not only define its employment attributes, but to package and communicate them in a way that will allow the firm to occupy a differentiated position in a specific employment market. To summarize: Initiative: Strategic employment branding Objective: Superior recruitment and retention of a targeted labor pool Result: Sustainable competitive advantage in a specific employment market with long-term bottom line benefits to the firm The strategic employment branding process is essentially a cycle that involves four stages. These stages

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References
1

McKinsey & Company Report to Participating Companies, The War for Talent, McKinsey & Company, 1998: 61. Ibid: 9. Corporate Leadership Council Issue Brief, Employment Branding, Corporate Executive Board, December 1998: 4, 7. Ibid: 4. Kotler, Phillip, Kotler on Marketing, 1st ed. (New York: The Free Press, 1999): 57-59. CIO, Destructive Behavior, Meridith Levinson, Vol 13, Issue 19: 90-96. Ries, Al and Trout, Jack, The 22 Immutable Laws of Marketing, 1st ed. (New York: HarperCollins Publishers, 1993): 8-9.

About the Author

Jeffrey Hodes, Executive Vice President at Bernard Hodes Group, has more than 20 years of experience as a marketing and communications professional. Jeff is currently responsible for the agencys Northeast region, where his staff works with companies of all sizes to manage their recruitment brand and integrate traditional and interactive media into a strategic communications plan. From the first employee referral promotion to the first recruiting site on the Web, Jeff has been at the forefront in providing human resource professionals with the most innovative solutions to their recruitment and employee communications needs.

2001 Bernard Hodes Group, All rights reserved.

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