Original Article

Employer branding and market

segmentation
Received (in revised form): 19th May 2009

Lara Moroko
is a brand and strategy researcher at the School of Marketing, University of New South Wales, Sydney, Australia. She has
held consulting positions in the fields of corporate and employer branding strategy.

Mark D. Uncles
is a professor at the School of Marketing, University of New South Wales, Sydney, Australia. His research interests
include brand management, retail analysis and consumer behavior.

ABSTRACT Over the last decade, firms large and small have begun overtly branding
themselves as employers as well as purveyors of goods and services. Drawing on an
investigation of employer brands in practice, we examine how market segmentation
is being used implicitly by managers and how established techniques for market
segmentation can be applied more extensively in the employer branding context.
Further, we posit that using a range of segmentation approaches in concert can
strengthen explicit links between employer branding and the broader strategic goals
of an organization. In particular, the use of a combination of generic types of market
segmentation should help the firm to be more efficient and effective in attracting,
retaining and motivating both current and potential employees.

Journal of Brand Management (2009) 17, 181196. doi:10.1057/bm.2009.10;

published online 25 September 2009
Keywords: employer branding; market segmentation; current employees; potential
employees; employee attraction; employee retention

INTRODUCTION

Correspondence:
Lara Moroko and Mark D. Uncles
School of Marketing, University
of New South Wales, Sydney
NSW 2052, Australia
Tel: +61 (0) 2 9385 3510
Fax: +61 (0) 2 9663 1985
E-mail: lara.moroko@unsw.edu.au;
m.uncles@unsw.edu.au

Market segmentation is a key concept in

marketing thought and practice, and this
has been so for many years.14 Typically,
this concept is discussed in terms of final
consumers or clients, who differ from one
another according to their geography, purchase and usage behavior, decision-making
processes, demographics, lifestyle, psychographics, personality and motivation. In
response to these differences, organizations
develop market segmentation strategies in

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the belief that it is more profitable to treat

certain groups of consumers differently
than to treat them all alike. Here we consider how a similar logic might apply in the
context of employer branding, a context
that is focused on the package of functional, economic and psychological benefits
provided by employment, and identified
with the employing company.5
Employer branding has gained favor
as a management tool over the last
decade. Even as firms face global economic

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Moroko and Uncles

conditions that are both difficult to forecast

and subject to extreme variance, the need
to attract, retain and motivate staff remains.
Employees who can respond to challenging
and intense competitive environments are
valuable in every market cycle, and arguably more so in times of significant change.
Acquiring, keeping and engaging these
value-adding employees has seen many
firms working harder at promoting themselves as desirable employers to potential
and current staff. Globally and locally, firms
as diverse as Microsoft, LOreal, Deloitte,
Procter and Gamble, GlaxoSmithKline,
IKEA, UBS and Google are using employer
branding in explicit and formal ways to
secure, retain and motivate desirable
employees as part of their broader competitive strategy, as are not-for-profits such
as the Red Cross and governmental organizations like the US Army.6
Previous studies indicate that employer
brands are seen to display groups of
attributes.711 These attributes, or packages
of functional, economic and psychological
benefits, underpin the brands positioning
in practice, serving as a firms employer
value proposition.12,13 It has been noted,
from a human resources management perspective, that particular bundles of benefits
can be used to pursue an employer of
choice strategy to attract and retain staff.14
This raises the question Can we use preferences for bundles of employment benefits
to segment the employee market, much the
same way as marketers use preferences
for product benefits to segment consumer
markets?
Moreover, if the productconsumer
relationship applies to the employee
employer brand, then it follows that other
segmentation bases, such as geo-demographic, socio-demographic, life cycle,
lifestyle and psychographic factors, as
understood by marketers, could also be
applicable to employer branding, and,
that various generic types of market

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segmentation in addition to those proposed

in the human resources literature15 might
be generally applicable, informative and
strategically useful.
Based on an empirical investigation of
employer branding (see Research Procedure), we examine the market segmentation approaches that are used, implicitly, in
current practice and the ways in which
market segmentation approaches can be
applied, explicitly, to employer the branding
context (see Interpretation). Further, we
uncover how, by using several market segmentation approaches together, human
resources and marketing managers can
determine which employees to target for
attraction and retention, how they may be
targeted, and factors that may disrupt the
seamless attraction and retention of desirable staff (see Discussion). First, however,
it is necessary to consider the range of
market segmentation types available to, and
used by, marketing practitioners.

GENERIC TYPES OF MARKET

SEGMENTATION
Marketers have long believed that, by
grouping consumers who are alike in
important ways, product offerings may be
better tailored to meet consumer needs and
wants, and in so doing increase sales and
revenue. The ways in which markets
have been segmented for the purpose of
identifying desirable groups of consumers
are innumerable, particularly given the
impressive rise in the availability of consumer and consumption data for specifying
variables and calibrating segmentation
models.
Most marketers are familiar with segmentation based on the target consumer.
Indeed, the Segmentation-targeting-positioning (STP) framework is an enduring
feature of marketing thought and practice.16
Examples range from attempts to treat
heavy buyers differently from light buyers
(using knowledge of past buying and usage

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Employer branding and market segmentation

experience as a basis for segmentation) to

the challenge of satisfying the differing
needs of Generation X (Gen X) and Generation Y (Gen Y) (with demographics and
psychographics as the bases of segmentation). In these approaches the firm is
reactive, charged with developing products
and services in response to external
consumer markets. That is, products and
services are developed in response to the
needs, wants, preferences, tastes and
whims of consumers, and the impact of
influencers, family, friends, peers and social
norms.
However, there is a forceful argument
that we should move beyond strictly consumer-centric methods of segmentation.
This is apparent, for instance, in the Bock
Uncles taxonomy of segmentation. Of their
five generic types only two are strictly consumer-centric, whereas the other types are
firm-centric or a mixture. Specifically, five
types of segmentation are described in their
taxonomy: product feature segmentation
refers to the benefits sought by consumers
and their impact on preference formation;
consumer interaction segmentation describes
the effects of person-to-person interactions
on preference formation; choice barrier
segmentation recognizes that consumers
may be prevented from fulfilling their preferences possibly through the effects of
imperfect information, and inadequate
awareness, knowledge or perception; bargaining power segmentation exists when
consumers differ in their ability to negotiate
attractive prices, terms and conditions; and
profitability segmentation exists when consumers provide different levels of actual or
potential profit to the firm.1722
Examples of the five generic types of
segmentation are shown in Table 1. We
provide examples for product-consumer
relationships, before later exploring the
generic types in terms of employee
employer relationships. To be consistent,
the examples listed in Table 1 mirror the

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four industries featured in the research

reported later: pharmaceuticals, financial
services, semi-government utilities and
transportation. It is important to appreciate
that these types of segmentation focus on
the firms strategic vision and ability to shape
the external market, as well as the relative
power of the firm and the consumer in
the exchange process. For these reasons, we
believe that there is particular merit in considering the BockUncles taxonomy.
When a firm undertakes employer
branding as a strategic activity, the product
they are branding is the employment experience that the firm offers, and the customers of this brand and product are
prospective and current staff. Given that
employer brands are perceived to display
groups of attributes in a way that is analogous to consumer brands this raises the
question mentioned earlier, Can we use
preferences for bundles of employment
benefits to segment the employee market,
much the same way as marketers use preferences for product benefits to segment
consumer markets?. Furthermore, if the
productconsumer relationship applies to
the employeeemployer brand, then is it
possible that other generic types of segmentation, such as those outlined in the taxonomy (Table 1), also apply? 25
To understand how we can improve on
employer branding outcomes, we investigate four employer brands in detail. This
enables us to uncover the market segmentation approaches from the taxonomy that
are valid in the employer branding context,
find the market segmentation approaches
that are implicitly evident in current
employer branding practice, and consider
the way these segmentation types might be
applied, both by the firms in the study and
by organizations more widely.

RESEARCH PROCEDURE
To gain an empirically based understanding
of the operation of employer branding, we

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Awareness of product and

product features, experience
and trial purchase, knowledge
of side effects and allergic
reactions, responsiveness to
advertising
Power of channel, pharmacy/
drugstore/convenience store,
distance from competing
stores, presence of generics
Purchase quantity,
repeat-purchase rates, price
paid after coupons/discounts

Choice barriers

Bargaining power

Profitability

Health-care professionals,
doctors/pharmacists,
household/partner preferences,
best-buy reports

Pack size, dosage strength,

dispenser type, ease of use,
pills/tablets/capsules, chemical
composition, taste/flavor, price
charged

Product feature
preferences

Consumer interaction
effects

Pharmaceuticals (eg pain relief

products)

Generic types of market

segmentation

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Deposit size, amount borrowed,

duration of patronage, interest rate
margins, fees/charges, servicing
costs

Risk profile, credit worthiness, ability

to repay loans, level of competition
for customers patronage,
significance of financial agent/broker

Knowledge of financial products,

awareness of switching costs,
delegation of decision-making to
financial planner, responsiveness to
advertising

Household/partner preferences,
friend/workmate recommendations,
professional advisers, financial press

Interest rates, terms of credit, access

to funds, liquidity, online versus
over-the-counter transactions

Financial services (eg bank accounts)

Table 1: Generic types of market segmentation and example variables23,24

Prompt/reliable bill payment,

fees/charges, servicing costs

Industrial/domestic usage, heavy/light

usage, regulation/deregulation,
competitive intensity

Awareness of switching costs,

awareness of product bundling
options, ability to appraise/
compare prices

Other customers, network

externalities, semi-government
regulators, legislators, quality and
service-level reports

Reliability of supply, ability to

meet peak demand, service
contracts, peak/off-peak pricing,
environmental footprint, carbon
offsets

Utilities (eg water, gas, electricity)

Frequency of usage, mode/class of

travel, yield categories, quantity/
frequency discounts, servicing costs,
price sensitivity

Frequent traveler status, purpose of

travel (business versus leisure),
travel agent, corporate travel buyer

Switching cost effect of frequent

traveler points and benefits of
alliance partnerships, ability to use
online booking systems, delegation
of booking to a personal assistant
or booking clerk

Travel group size/composition, levels

of crowding, risks posed by other
travelers, preferred carrier policies

Frequency, number of routes,

flexibility, ease of booking,
check-in speed, staff friendliness,
recognition by staff/crew, in-transit
entertainment, security, leg room,
comfort

Transportation (eg railways, airlines)

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Employer branding and market segmentation

Table 2: Interviews carried out at the participating

organizations
Industry

Pharmaceuticals firm
Financial services firm
Semi-government utility
Transportation firm
Totals

EB process
managers
interviewed

Employees
interviewed

15
13
15
15
58

10
10
10
11
41

gathered data from four organizations on

their employer branding processes. The
firms represent a broad range of industries
(as detailed in Table 2). The primary source
of data were semi-structured in-depth
interviews. We carried out the interviews
on-site at each of the firms. All the interviews followed an interview guide consisting of open-ended questions designed to
probe aspects of the process (for example
internal marketing, the role of leadership,
support of line management, alignment of
internal and external values and communications and so on). This ensured consistent
interview data that would facilitate
interpretation, while also allowing for
opportunistic exploration of themes with
respondents where appropriate.
Interview data were gathered from
those staff we identified as being involved
in the day-to-day management of the
employer branding process, for example
human resources, marketing, brand, internal
and external communications and employee
relations staff. Individual respondents were
identified at each organization with the
help of a key informant. Suppliers heavily
involved in the delivery of the explicit
or implicit employment brand (for example external advertising, design, human
resources and recruitment agency staff )
were also interviewed. Each respondent
was asked how the employer branding
process worked within the organization and
about the parties that participated in the
process. They were asked how the relevant

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parties interacted at each level of seniority

and the type of planning, communication,
measurement and reporting structures that
were involved in the process.
Employees from each organization, who
were not involved in the management of the
employer branding process, were also interviewed to gather data on the impact that the
management of the employer brand was
having on the target audience. These respondents (see Table 2) had a variety of functional
positions, levels of seniority and lengths of
tenure. In addition to discussing the operation
of the employer branding process (or the way
the organization markets itself as an employer
to current and potential staff ), these respondents were asked what attracted them to the
employer, whether the employer had delivered on the initial attraction factors and the
key drivers that helped to attract and retain
staff more generally.
The interview data were supplemented
by additional sources such as documents
(for example, internal and external brand
guidelines, employee handbooks, recruitment advertising, employee/recruitment
brochures, employer branding strategy and
planning documents, employee engagement, turnover and recruitment reports and
so on), multimedia data (intra- and extranet pages, induction videos and other staffdirected video presentations), and other
material (promotional materials relating to
company values, such as posters, t-shirts and
screen-savers, audio messages to staff and
so on). Typically, the collection of this supplementary data was prompted by comments by the respondents. For example, if
a respondent referred to a particular piece
of internal communication or a strategy
document, then best efforts were made by
the researchers to collect and incorporate
these data into the study.
The interviews ran, typically, from 60 to
90 min, during which time field notes
were taken by the interviewer. At the conclusion of on-site data collection, the field

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notes were reviewed by the interviewer for

emerging themes on the operation of the
employer branding processes at each of the
firms. This helped to guide additional data
collection (particularly with respect to auxiliary data). Once data collection was complete, we coded the verbatim transcripts of
the audio recordings of the interviews,
along with field notes and auxiliary data.
Common themes within the coded data
were identified and examined for similarity
to arrive at the initial range of segmentation
themes. These segmentation themes were
then compared with the BockUncles
taxonomy to establish which segmentation
types in the taxonomy could be validly
applied to the employer branding process.
The data were then systematically reexamined for evidence of the segmentation
types being used explicitly or implicitly
at each firm. As a last step, key informants
at each of the firms were presented with
the analysis and discussion, and we asked
them to confirm that the content was representative and the findings resonant and
relevant.26,27

INTERPRETATIONS
Based on the data, and the research procedure just described, we consider the segmentation types that can be applied validly
to the employer branding context, and how
they apply. We then examine the segmentation types being used explicitly by the
firms in the study and the segmentation
types implicitly evident in the employer
branding processes of the firms.

THE VALIDITY OF MARKET

SEGMENTATION APPROACHES
IN THE EMPLOYER BRANDING
CONTEXT

186

communications fall into two categories:

remuneration benefits and more general
experiential benefits. For example, a firm
may highlight the level and potential for
remuneration and the ability to be rewarded
for performance through company share
and bonus schemes, or the ability to effectively package remuneration for optimal
tax benefit. As with any price-driven
strategy, it is often easy for competitors to
match remuneration benefits and reduce
the firms competitiveness. Consequently,
other experiential benefits are also offered,
including: education, training and support;
the opportunity for promotion and travel;
flexible working hours, childcare and
parental leave; and autonomy, security and
other work culture and practice related
benefits. The following quotes demonstrate
how these benefits can help to attract and
retain staff:
I was a bit nervous coming back into the
industry being out of it for a couple of years
post baby and baby brain and everything
associated with it. It was just wonderful,
so family friendly. They were so helpful,
inviting, everyone was so welcoming.
Nothing was a drama whatsoever. I had
to work an extra day for training and they
were so apologetic it was just ridiculous.
(Pharmaceuticals Firm, Sales Representative)
It just means that if you are the type of person
who is motivated to go somewhere, you
dont have to sit around for 5 years saying
oh when is that person going to leave?
there are plenty of cases where people come
in and have just gone up and up and up. So
thats the reason I think people stay here.
(Financial Services Firm, Client Manager)

(a) Product feature preference For

employees

(b) Interaction effects Between

employees and their reference group

The type of employment benefits or features typically espoused in employer brand

Employees rarely make choices about their

employment prospects in a social vacuum.

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Employer branding and market segmentation

As has been seen with consumers,28

a potential employee will often turn
to a reference group when choosing
between employment offers, or indeed
when choosing between several acceptable
employers to which they may apply for
work. This group can consist of family or
a spouse, peers or social cohorts. Therefore,
in terms of the labor market, it is crucial
for the employer brand to be viewed favorably by the group that the potential
employee will turn to for advice and
approval, as well as being viewed favorably
by the target employee. Beyond attracting
the employee, positive associations of the
employer brand across reference groups can
also aid in retention, as demonstrated in the
following quote:
If you take the dinner party index: I would
go to a dinner party and I meet someone
and they say what do you do? and I say
I work in HR at [company] and they go
oh my, fabulous, whats it like to work
there, you must get free travel, you must
get fascinating work . There seems
to be quite an aura and our engagement
results tell us very much that people like
to say they work here because it obviously
gives them some sort of pride. I suspect the
pride is generated from peoples reaction to
them saying that they work for [company].
(Transportation Firm, HR Manager)

only admitting employees who meet or

exceed these benchmarks. Choice barriers
are also used to enhance retention. Delayed
bonuses, long service leave and lucrative
retirement or retrenchment packages serve
as golden hand-cuffs, tying employees to
the firm when they might otherwise be
tempted into looking for other employment opportunities. The following are
examples of both exit and entry barriers
at play:
[Talking about internal promotion outcomes]
I always ask what happens if you dont get the
job that you apply for will you go outside?
Now, the majority of people say they wont
go outside because of the length of their
tenure with the firm. They have been here
for such a long while that their retrenchment
packages are really, really tying them into the
firm. (Semi-Government Utility, External
Recruitment Consultant)
We dont hire graduates We dont have
any graduate program if you are going to
hire graduates you need to have meaningful
and decided programs in place. It needs to
have a purpose. It needs to have a future
and an outcome. Given the nature of our
business, we look for experienced people.
We look for the industry experience, their
therapeutic experience and the demands
of the business are you need that now.
(Pharmaceuticals
Firm,
Recruitment
Manager)

(c) Choice barriers Employer-imposed

Employers, through hiring and remuneration policies, can impose barriers to both
entering and leaving the firm. Firms can
set general benchmarks for prospective
employees as well as role-specific requirements such as education qualifications,
relevant experience and residency or
visa status. Many firms go as far as to
evaluate psychometric and intelligence
profiles against company-wide standards,

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(d) Bargaining power Employee-based

Although choice barriers can impart
power to the employer when selecting and
retaining key employees, some groups of
employees can also exercise their own
power in this relationship because of the
rarity of their skill, level of seniority, relevant experience and qualifications. The
higher the demand for these attributes
within the company, or indeed within the

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broader employment market, the greater

the bargaining power the employee can
exert:
But as far as the other parts of the organization
go I think they are seen as support people,
they are supporting the engineers. So the
engineers are at the top of the tree and
there are all these people that are helping
us. Im an engineer too by the way. Part
of the reason why I did environmental
studies degree after I did my engineering
degree and then I did my MBA. I see the
benefit in having a broad understanding and
expertise. I dont necessarily do engineering
work as such and that is a problem with
these organizations is that engineers are the
ones that people look up to and encourage.
(Semi-Government Utility, Client/Project
Manager)

(e) Profitability Of the employee

for the employer
A final generic type of segmentation can
be found in the potential profitability of
the employee for the employer. This type
can be applied to groups of employees who
have skills, experience or knowledge that
are critical to the success of those areas of
the business driving profit growth. Alternately, segmentation can be based on the
capacity of individual employees to generate revenue or reduce costs, as demonstrated in the following quote:
I think particularly when we go out and seek
someone in a proactive way, its because we
really need them If you are somebody
who can generate and manage appropriate
revenue then there is no reason [to not start
in a senior position] if you could relationship
build and all that sort of stuff. (Financial
Services Firm, HR Manager)

It is evident that the generic segmentation

types described in Table 1 are applicable to
the employer branding context, but which

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of these were actively and knowingly used

by firms in our study? Furthermore, which
approaches were at play but not proactively
managed by the firms?

THE EXPLICIT AND IMPLICIT USE

OF MARKET SEGMENTATION IN
EMPLOYER BRANDING PRACTICE
(a) Segmentation types explicitly
used by firms in the study
Managers responsible for employer branding
processes at all four firms in our study used
some segmentation types for strategic purposes. Predominantly, segmentation was
used as a financial tool. Age, for example,
was used as a common choice barrier proxy
to understand the financial implications
arising from the firms employee profile.
Those firms with a relatively high number
of staff nearing retirement used age segmentation to assess their retirement payout
liability. Other firms targeted young graduates as cost-effective sources of employees
in labor-intensive industries that required
skilled employees. Interestingly, most firms
did not move beyond the observable factor
of age in these analyses (the exception being
the pharmaceuticals firm). For example,
attitudinal data regarding working beyond
the legislated retirement age, or in fact
retiring/semi-retiring before this age, went
largely unexplored, despite well-publicized
policy debates about the need for greater
flexibility around retirement ages. Similarly, the desired career benefits for experienced graduates moving toward junior
management levels were not investigated
for the purposes of providing attractive
career paths (and bolstering retention) for
this significant group of employees, in spite
of well-documented differences between the
attitudes of Gen Y and Gen X graduates.
Profitability segmentation was also used
at the financial services and pharmaceuticals
firms as a way of identifying specific job

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roles and staff that are profit drivers for

the firm. These roles and staff enjoyed
additional focus with respect to attraction
and retention strategy. Only one firm purposively moved beyond segmentation types
that naturally relate to the firms perspective
(that is choice barriers and profitability) and
used segmentation from the employees
perspective to attract and retain strategically
important staff. The pharmaceuticals firm
was able to attract and retain a highly experienced, credentialed and knowledgeable
salesforce who, despite typically working
with only one product line (in some cases
for more than a decade), were engaged,
motivated and effective. This was achieved
in an industry that generally is seen as
having a high turnover of front-line staff.
The firm identified groups of employees
using product feature preference and consumer interaction types. The process began
with one employee returning to work after
having children. She required a part-time
position with flexibility, but that still offered
remuneration and challenges commensurate with her skills and experience. The
pharmaceuticals firm soon realized that
there were a number of potential employees
in this position, and created a bundle
of hard (policy-driven) and soft (discretionary management) benefits to keep
these employees engaged, while allowing
them to fulfill commitments beyond the
workplace. Through word-of-mouth, the
firm has become known for its familyfriendly attitude within its industry, and
has thus created a talent pool of potential
staff with appropriate knowledge and skills
attracted by a compelling product feature
bundle:
here I have seen many, many instances
in which the company literally says lets find
the solution and bending over backwards
be it job-share, be it if you want to start one
day a week and then that builds up to 3 or 4
days. Its an extremely flexible arrangement

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by negotiation with your employer like

your immediate boss. I think at the end
of the day everyone wins in that sort of
situation. (Pharmaceuticals Firm, Internal
Communications Manager)

Interestingly, if employer branding success is

defined in terms of attractiveness (for example
the employer is known and noticeable) and
accuracy (for example psychological contracts
are fulfilled), following the MorokoUncles
typology of employer branding success,29 the
pharmaceuticals firm displays the characteristics of success most strongly of the four firms
in the study. Imaginative use of segmentation
types and employer branding success appear
to go hand in hand.

(b) Segmentation types implicitly

at play but not managed by firms
in the study
Product feature preference, interaction
effects and bargaining power segmentation
types were all at play in the firms, as evidenced by the quotes in the previous sections, but they were not fully leveraged by
the firms in the study.
Positive attitudes toward employee benefits (product feature preference) and the
general reputation of the firm in question
(consumer interaction effects) were highlighted as strong attraction and retention
drivers among the staff. However, these
staff did not have an accurate understanding
of the benefits offered by their employer
before joining the firm, despite thorough
information searches during their recruitment process:
I didnt know there was childcare here at
all and it was quite important to me. I was
ringing up childcare centres and they were
saying there is a waiting list if I was ever
thinking I cant move to city X because I
cant get childcare, it would have made all
the difference to me at that point. (SemiGovernment Utility, Client Manager)

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Even at the pharmaceuticals firm, where

word-of-mouth about job product
features was strong among potential staff,
there was still surprise on the part of
employees at the scope of relevant, desirable benefits:
I had no perception that the training was so
good. So intense and so nurturing. I underline
intense. They want to make sure you are the
experts, so thats really important as well if
you are going to work there and have that
confidence, its very good. (Pharmaceuticals
Firm, Sales Representative)

At the transport firm, product feature preference and consumer interaction effects
served to work against the organization.
Because of the lack of accurate communications to current and potential staff about
the employment product, rather than just
marketing communications about the consumer products, an exaggerated positive
view of the employment product features
and strong goodwill towards the firm set
expectations of the employment experience
that the firm did not deliver, leading to a
lack of engagement and motivation:
If a brand is iconic and its held up as being a
great company, then you think that, well
if you are seeing externally that everything is
fantastic then you think oh well its going
to be fantastic internally because they must
have produced that behavior. But clearly
that is not necessarily the case [at the firm].
Unless you were told otherwise unless
someone actually explains to you well its
not, this is what it is, this is the experience
youre going to have. (Transportation Firm,
Internal Communications Manager)

DISCUSSION: USING A VARIETY

OF SEGMENTATION TYPES TO
LINK EMPLOYER BRANDING TO
BUSINESS STRATEGY
It is clear from the preceding discussion that
various types of market segmentation are

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being used in employer branding processes

if not explicitly then at least implicitly. It
is also evident that marketers and human
resources managers working in this context
can drive their employer branding strategies
harder (and smarter) by thinking in terms
of the full range of segmentation types
that have been described here. We discuss
three situations in which this makes a
difference.

(a) Recruitment: Beyond grads,

juniors and entry-level employees
Many employer brand managers would
argue that the how to attract uses of segmentation are well understood and used
widely. Look no further than the marketing
of jobs in the armed forces of countries that
do not have compulsory military service for
instances of how the preferred product
features/benefits of the target market are
communicated to a broad target audience
to increase overall rates of application and
job-offer acceptance.30 Similarly, highquality graduates in business, law and engineering are bombarded with multi-media
campaigns promising exciting careers, promotion, travel and exceptional remuneration called into service is everything from
information evenings with cocktails to
funky YouTube videos.
It is true that at this entry-level end of
the employment market there is much targeted employer branding activity that is
generally successful in attracting suitable
candidates. However, there are some
serious strategic issues with focusing the
effort on understanding only this target
market and ignoring the bigger picture.
Firstly, the focus on entry-level candidates is at least partially predicated on the
view that a good proportion of these
employees will start at the bottom of the
firm, work their way up through the ranks
over a number of years and eventually
achieve middle or upper management positions. As most human resources managers

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Table 3: Bases of employer branding segmentation

Segmentation base

Segmentation level

Observable factors
Age

Examples
Baby boomers; Generation X; Generation Y

Seniority

Graduate; junior manager; senior manager; board member

Job type

Technical (eg engineer, client tax specialist); client facing (eg customer service, sales, call
center); central/support services (eg human resources, accounting/finance, marketing);
blue collar (eg factory, maintenance, production line, packaging, cleaning)

Permanence

Permanent; contract; casual

Employee lifecycle

Applicant; new starter; current staff; alumni

Tenure

Short/medium/long term (eg less than 12 months, 15 years, 510 years 10 years plus)

Physical location

Head office/subsidiaries; city/country/region

Unobservable factors
Career focus

Examples
Industry (ie want to apply their specialization in a particular industry); vocation (ie want
to pursue specialization in any industry); company (ie want to pursue opportunities
associated with the employing company, eg travel, remuneration, professional
development, flexibility in relation to industry/specialization)

Outlook on life stage

Young single; working family member; empty nester; pre-retiree; semi-retiree

Desired career benefits

Security/stability/predictability; change/growth/opportunity; education/professional

development, remuneration, flexibility (eg job roles, work hours)

will attest, this type of single-company

career path is increasingly rare and
indeed unappealing to many Gen Y
employees. Furthermore, this workforce
planning strategy assumes that the firms
future growth lies in a predicable trajectory
from their position today, that is, that the
skills, knowledge and experience that these
entry-level employees gather on the way
up will be exactly those needed to grow
the business in the future. Faced with
intense global competition, most firms do
not enjoy this luxury, needing at some stage
to re-skill at least part of their workforce
and hire new talent to cope with the
changing nature of their business.31
Breaking out of this over-emphasis at the
entry level requires a better understanding
of the product benefits and influences on
middle and senior management targets.

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These groups may be difficult to attract

given that they are likely to have greater
bargaining power, can be hard to identify
when they come from a range of backgrounds and industries, and can be difficult
to reach through mainstream marketing
communications. However, as demonstrated by the pharmaceuticals firm in our
study, successful targeting of these types of
employees is possible. Using insights into
life-stage and career benefit factors, and
understanding the role of family and social
influence on decision-making, this firm was
able to provide a compelling employee
value proposition to a well-defined segment of employees.
An important consideration here is the
use of both observable and unobservable
bases of segmentation, examples of which
are shown in Table 3. Moving away from

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Moroko and Uncles

strictly observable bases of segmentation

commonly used at the entry level (like age,
degree, university, grade point average,
location and income level) allows for greater
finesse in pinpointing employment experience features that are desirable to the target
market and their reference group. The
unobservable bases of segmentation include
factors such as career focus, perceived life
stage and desired career benefits. Although
quite hard to assess, these factors are detectable using attitude research techniques,
such as in-depth interviews and focus
groups.
In creating a broad understanding of
employee benefit drivers and building
employment experiences that are appealing
across the spectrum of seniority in the firm,
greater strategic flexibility is achieved. If,
for example, the business plan dictates a
significant move into a new line of business,
market or region, the strength of a balanced
employer brand can attract the employees
needed to fuel the new venture at all
levels, quickly drawing in employees with
advanced skills and experience.

(b) Strategic workforce planning:

More than just filling empty
workstations
Three of the four firms regarded segmentation as a tool for workforce planning in a
financial sense. This appears to be commonly referred to in general practice as
workforce segmentation indeed the segmentation of employees based on role type
and cost to the firm is an established strategic human resources tool. A small number
of leading-edge companies are going further than this they are also segmenting
employees and job roles based on their current profit contribution to the business.32
Roles that are classified as business critical
are allocated more resources for attraction
and retention programmes. While this may
not seem to be a revolutionary approach
to planning, in practice it is markedly

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divergent from the transactional view of

recruitment in many firms, that is, when
an exiting employee is replaced by an
employee with a similar skill set, qualifications and experience, and workforce planning does not routinely occur beyond a
rudimentary level.
Systematic, strategy-based workforce
planning is not commonly practiced, and
yet this type of planning would be advantageous when developing a coherent
approach to employer branding.33 Understanding who to attract to the firm as well
as how to attract them is a direct bridge
between the employer brand and the business plan. For example, there may be little
point in attracting domestic engineers based
on local industry, tax and lifestyle benefits
for a Californian firm if the bulk of future
earnings are to come from onsite engineering projects in China and India.
Marketers of packaged goods products
have long used this type of strategic segmentation to arrive at manageable, profitable and some would say optimal product
portfolios. Not all products with a large and
reachable consumer market will contribute
equally to a firms profitability and strategic
path. Consequently, those product ideas
with lower or slower profitability projections, or those divergent from the strategic
direction, will be rationalized.34 A similar
logic applies for strategic workforce planning. By being vigilant about the mediumto long-term business plan, human resources
managers can use the employer brand to
seed a firm with the best mix of employees
to deliver on objectives now and into the
future.

(c) Minimizing disruptions to

attraction and retention: Leveraging
choice barriers and acknowledging
bargaining power
Having selected the most strategically
appropriate employees to target, and marrying this with the employment product

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Employer branding and market segmentation

Strategic Business Plan

Who to
attract/retain

Skill set, experience, job type, location, seniority required to enact business plan

Disrupters

Seniority, qualifications, work and pay conditions (eg: golden handcuffs)

Profitability Segmentation

How to
attract/retain

Bargaining Power and Choice Barriers Segmentation

Product Features and Interaction Effects Segmentation

Product features, benefits, potential, scope and social desirability

Market/Target Segment Preference

Figure 1: Employer branding segmentation as a strategic lever.

features and benefits these employees prize,

a firm may still be struggling to fulfill its
attraction and retention goals. To complete
the picture, therefore, employees should
also be segmented according to bargaining
power and choice barriers to entry or exit.
For example, profit-driving employees may
be attracted to the firm but not recruited
because of a culture of hiring on past performance rather than potential (an artificial
choice barrier to entry). Conversely, highly
sought after, experienced staff may be difficult to retain because of their broader
market demand (that is strong bargaining
power). Clearly identifying these employees
and understanding the benefit bundles they
seek offers an efficient method for minimizing the potential disruption to the
attraction and retention of these staff.
Given that every company has limited
resources to remunerate their staff (in salary
and benefits), it is useful to have a basis for
prioritizing employee-based programmes.
For example, a firm may be considering
onsite childcare as a means of improving its
attractiveness as an employer; however, it
may be the prospect of all-expenses-paid

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executive education at a world-class institution that provides a more compelling

employee value proposition to those
employees who are sought after by competitors and who are going to drive future
profits. Understanding and segmenting on
these disruptive bases may enable firms to
execute attraction and retention strategies
more efficiently and effectively.23,24

CONCLUSION: EMPLOYER
BRANDING SEGMENTATION
AS A STRATEGIC LEVER
An implication of the preceding discussion
is that by using all the available generic
types of segmentation when executing an
employer branding strategy there will be
synergistic benefit and leverage beyond
using individual types in isolation. The way
in which the segmentation approaches
inter-relate is shown in Figure 1, in which
the generic types are grouped in terms of
who to attract/retain (profitability segmentation), how to attract/retrain (product feature and interaction effects segmentation),
and disrupters (bargaining power and choice
barrier segmentation).

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Moroko and Uncles

At the very least, the interaction between

profitability segmentation (who to attract/
retain) and product feature and interaction
effect segmentation (how to attract/retain)
needs to be considered. Almost every
product feature of the employment experience comes at a cost to the firm (for
example childcare, retirement benefits,
flexible working hours, onsite cafeteria,
education assistance, mentoring, fitness
coaching, sabbaticals, healthcare and so on).
If it is clear which employees need to be
targeted, based on the business plan, then
better resource allocation decisions can be
made with respect to the range of benefits
the company offers. For example, a focus
on onsite childcare, job-sharing and paid
parental leave benefits are a misallocation
of resources for a firm needing to attract a
large number of graduates to perform highvolume work over long hours. These programmes are not only largely irrelevant to
the desired employees, but are a drain on
resources for the firm in terms of set-up
and ongoing costs. The opposite is true for
a firm that can function profitably with
long-serving staff working school hours,
possibly as part-time employees for certain
periods of time in their careers.
Understanding the influence of the factors that disrupt the easy flow of employees
into and out of the firm also serves to boost
the effectiveness of the strategy as a whole.
Choice barriers, in particular, are in the
control of the firm, and can be used to
counter the bargaining power of desirable
employees. However, if they are not identified and managed within the context of
the broader strategy, these factors can derail
even the most well-considered plans.
There are, of course, limitations to the
application of market segmentation in the
employer branding context and the research
on which the preceding discussion is based.
There are, for example, legal (if not ethical
and moral) barriers to segmenting potential
and current employees on the base of race,

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gender, age, ethnicity or disability. Furthermore, the extent to which firms are able
to quantify and investigate the various segments of current and future employees is
limited by the quality of available data.
Some firms regularly monitor employee
attitudes, and in-depth interviewing is routine, but this cannot be said for all firms.
To undertake meaningful investigations,
more firms must invest in the gathering,
holding and analysis of appropriate data.
Finally, as the firms in our sample did not
explicitly use a range of segmentation
approaches with respect to current and
potential employees, we are unable to
quantify the financial benefits of using
single or multiple segmentation approaches.
Nevertheless, financial appraisal would be
desirable.
Notwithstanding these limitations, we
believe that an integrated approach to
employer brand segmentation has the
capacity to offer firms information about
their needs and the needs of current and
potential employees that allows for dynamic
and strategic decision-making at a firmwide level. This flexibility, and the ability
to supply appropriate human capital to
meet future needs, has great potential to
underpin ongoing growth and profitability.

ACKNOWLEDGEMENTS
We thank the participant firms for giving
access to their employees and for being so
receptive to the investigation. The
thoughtful and useful comments from two
anonymous reviewers helped us to improve
the paper. A feature article on a similar
theme was published by the authors in
the Wall Street Journal, 23 March 2009,
R7R8.35

REFERENCES AND NOTES

(1) The strategic importance of segmentation is
emphasized in marketing textbooks see Dickson, P.

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Employer branding and market segmentation

(2)
(3)

(4)

(5)

(6)

(7)

(8)

(9)

(10)

(11)

(12)

(13)

(14)

(15)

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Aaker, D.A. (2007) Strategic Market Management,
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Dowling, G.R. (2004) The Art and Science of Marketing: Marketing for Marketing Managers. Oxford:
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Brand Management

(16) Dowling, G.R. (2004) The Art and Science of Marketing: Marketing for Marketing Managers. Oxford:
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(27) Creswell, J.W. (1998) Qualitative Inquiry and
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Management 16(3): 160175.

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(30) This is most apparent in countries without conscription or national service the United States,
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(32) Lavelle, J. (2007) On workforce architecture,
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Public Personnel Management 36(4): 371385.

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(33) Johnson, G.L. and Brown, J. (2004) Workforce

planning not a common practice, IPMA-HR
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369389.
(35) Moroko, L. and Uncles, M.D. (2009) Business
Insight (A Special Report). Employer Branding:
Companies have long divided consumers into segments; They should do the same with potential
and current-workers. Wall Street Journal 23 March:
R7R8.

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