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, 181–196. 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 the belief that it is more profitable to treat

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.1–4 Typically,
this concept is discussed in terms of final
consumers or clients, who differ from one
another according to their geography, pur-
chase and usage behavior, decision-making
processes, demographics, lifestyle, psycho-
graphics, personality and motivation. In
response to these differences, organizations
develop market segmentation strategies in
certain groups of consumers differently
than to treat them all alike. Here we con-
sider how a similar logic might apply in the
context of employer branding, a context
that is focused on ‘the package of func-
tional, 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

© 2009 Palgrave Macmillan 1350-23IX Brand Management Vol. 17, 3, 181–196

www.palgrave-journals.com/bm/
 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 argu-
ably more so in times of significant change.
Acquiring, keeping and engaging these
value-adding employees has seen many
firms working harder at promoting them-
selves as desirable employers to potential
and current staff. Globally and locally, firms
as diverse as Microsoft, L’Oreal, 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 com-
petitive strategy, as are not-for-profits such
as the Red Cross and governmental organ-
izations like the US Army.6
Previous studies indicate that employer
brands are seen to display groups of
attributes.7–11 These attributes, or packages
of functional, economic and psychological
benefits, underpin the brand’s positioning
in practice, serving as a firm’s employer
value proposition.12,13 It has been noted,
from a human resources management per-
spective, 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 pref-
erences 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 product–consumer
relationship applies to the employee–
employer brand, then it follows that other
segmentation bases, such as geo-demo-
graphic, 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
182 © 2009 Palgrave Macmillan 1350-23IX Brand Management
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 Proce-
dure’), we examine the market segmenta-
tion 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 seg-
mentation 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 desir-
able 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 con-
sumer and consumption data for specifying
variables and calibrating segmentation
models.
Most marketers are familiar with seg-
mentation based on the target consumer.
Indeed, the Segmentation-targeting-posi-
tioning (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
Vol. 17, 3, 181–196

experience as a basis for segmentation) to
the challenge of satisfying the differing
needs of Generation X (Gen X) and Gen-
eration Y (Gen Y) (with demographics and
psychographics as the bases of segmenta-
tion). 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 con-
sumer-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 con-
sumer-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 pref-
erences – possibly through the effects of
imperfect information, and inadequate
awareness, knowledge or perception; bar-
gaining power segmentation exists when
consumers differ in their ability to negotiate
attractive prices, terms and conditions; and
profitability segmentation exists when con-
sumers provide different levels of actual or
potential profit to the firm.17–22
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
© 2009 Palgrave Macmillan 1350-23IX
Employer branding and market segmentation
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 firm’s 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 con-
sidering the Bock–Uncles taxonomy.
When a firm undertakes employer
branding as a strategic activity, the ‘product’
they are branding is the employment expe-
rience that the firm offers, and the ‘cus-
tomers’ 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 anal-
ogous 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 pref-
erences for product benefits to segment
consumer markets?’. Furthermore, if the
product–consumer relationship applies to
the employee–employer brand, then is it
possible that other generic types of segmen-
tation, such as those outlined in the tax-
onomy (Table 1), also apply? 25
To understand how we can improve on
employer branding outcomes, we investi-
gate four employer brands in detail. This
enables us to uncover the market segmen-
tation 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
Brand Management Vol. 17, 3, 181–196 183
184
Table 1: Generic types of market segmentation and example variables23,24
Generic types of market Pharmaceuticals (eg pain relief
segmentation products)
Product feature Pack size, dosage strength,
preferences dispenser type, ease of use,
pills/tablets/capsules, chemical
composition, taste/flavor, price
charged
© 2009 Palgrave Macmillan 1350-23IX
Consumer interaction Health-care professionals,
effects doctors/pharmacists,
household/partner preferences,
best-buy reports
Brand Management
Choice barriers Awareness of product and
product features, experience
and trial purchase, knowledge
of side effects and allergic
Vol. 17, 3, 181–196
reactions, responsiveness to
advertising
Bargaining power Power of channel, pharmacy/
drugstore/convenience store,
distance from competing
stores, presence of generics
Profitability Purchase quantity,
repeat-purchase rates, price
paid after coupons/discounts
Financial services (eg bank accounts)
Interest rates, terms of credit, access
to funds, liquidity, online versus
over-the-counter transactions
Household/partner preferences,
friend/workmate recommendations,
professional advisers, financial press
Knowledge of financial products,
awareness of switching costs,
delegation of decision-making to
financial planner, responsiveness to
advertising
Risk profile, credit worthiness, ability
to repay loans, level of competition
for customers’ patronage,
significance of financial agent/broker
Deposit size, amount borrowed,
duration of patronage, interest rate
margins, fees/charges, servicing
costs
Utilities (eg water, gas, electricity)
Reliability of supply, ability to
meet peak demand, service
contracts, peak/off-peak pricing,
environmental footprint, carbon
offsets
Other customers, network
externalities, semi-government
regulators, legislators, quality and
service-level reports
Awareness of switching costs,
awareness of product bundling
options, ability to appraise/
compare prices
Industrial/domestic usage, heavy/light
usage, regulation/deregulation,
competitive intensity
Prompt/reliable bill payment,
fees/charges, servicing costs
Moroko and Uncles
Transportation (eg railways, airlines)
Frequency, number of routes,
flexibility, ease of booking,
check-in speed, staff friendliness,
recognition by staff/crew, in-transit
entertainment, security, leg room,
comfort
Travel group size/composition, levels
of crowding, risks posed by other
travelers, preferred carrier policies
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
Frequent traveler status, purpose of
travel (business versus leisure),
travel agent, corporate travel buyer
Frequency of usage, mode/class of
travel, yield categories, quantity/
frequency discounts, servicing costs,
price sensitivity

Table 2: Interviews carried out at the participating
organizations
Industry EB process
managers
interviewed
Pharmaceuticals firm 15
Financial services firm 13
Semi-government utility 15
Transportation firm 15
Totals 58
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 inter-
views followed an interview guide con-
sisting 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 communi-
cations 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 exa-
mple 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
© 2009 Palgrave Macmillan 1350-23IX
Employer branding and market segmentation
parties interacted at each level of seniority
and the type of planning, communication,
Employees measurement and reporting structures that
interviewed were involved in the process.
Employees from each organization, who
10 were not involved in the management of the
10 employer branding process, were also inter-
10
11 viewed to gather data on the impact that the
41 management of the employer brand was
having on the target audience. These respond-
ents (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 respond-
ents were asked what attracted them to the
employer, whether the employer had deliv-
ered 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, recruit-
ment advertising, employee/recruitment
brochures, employer branding strategy and
planning documents, employee engage-
ment, turnover and recruitment reports and
so on), multimedia data (intra- and extra-
net pages, induction videos and other staff-
directed 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 sup-
plementary data was prompted by com-
ments 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 con-
clusion of on-site data collection, the field
Brand Management Vol. 17, 3, 181–196 185
 Moroko and Uncles
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 aux-
iliary data). Once data collection was com-
plete, 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 Bock–Uncles
taxonomy to establish which segmentation
types in the taxonomy could be validly
applied to the employer branding process.
The data were then systematically re-
examined 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 rep-
resentative and the findings resonant and
relevant.26,27
INTERPRETATIONS
Based on the data, and the research proce-
dure just described, we consider the seg-
mentation types that can be applied validly
to the employer branding context, and how
they apply. We then examine the segmen-
tation 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
(a) Product feature preference – For
employees
The type of employment benefits or fea-
tures typically espoused in employer brand
186 © 2009 Palgrave Macmillan 1350-23IX
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 effec-
tively ‘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 firm’s 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
don’t 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
that’s the reason I think people stay here.
(Financial Services Firm, Client Manager)
(b) Interaction effects – Between
employees and their reference group
Employees rarely make choices about their
employment prospects in a social vacuum.
Brand Management Vol. 17, 3, 181–196

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 favo-
rably 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, what’s 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 people’s reaction to
them saying that they work for [company].
(Transportation Firm, HR Manager)
(c) Choice barriers – Employer-imposed
Employers, through hiring and remunera-
tion policies, can impose barriers to both
entering and leaving the firm. Firms can
set general benchmarks for prospective
employees as well as role-specific require-
ments 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,
© 2009 Palgrave Macmillan 1350-23IX
Employer branding and market segmentation
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 employ-
ment 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 don’t get the
job that you apply for’ ‘will you go outside?’
Now, the majority of people say they won’t
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 don’t hire graduates … We don’t 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)
(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, rel-
evant experience and qualifications. The
higher the demand for these attributes
within the company, or indeed within the
Brand Management Vol. 17, 3, 181–196 187
 Moroko and Uncles
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. I’m 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 don’t 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. Alter-
nately, segmentation can be based on the
capacity of individual employees to gen-
erate revenue or reduce costs, as demon-
strated in the following quote:
I think particularly when we go out and seek
someone in a proactive way, it’s 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
188 © 2009 Palgrave Macmillan 1350-23IX
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 pur-
poses. 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 firm’s employee profile.
Those firms with a relatively high number
of staff nearing retirement used age seg-
mentation to assess their retirement payout
liability. Other firms targeted young gradu-
ates 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. Simi-
larly, the desired career benefits for expe-
rienced 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
Brand Management Vol. 17, 3, 181–196

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 pur-
posively 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 expe-
rienced, 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 con-
sumer 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 commensu-
rate 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 (discre-
tionary 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 ‘family-
friendly’ 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. It’s an extremely flexible arrangement
© 2009 Palgrave Macmillan 1350-23IX Brand Management
Employer branding and market segmentation
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 Moroko–Uncles
typology of employer branding success,29 the
pharmaceuticals firm displays the characteris-
tics 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 evi-
denced by the quotes in the previous sec-
tions, but they were not fully leveraged by
the firms in the study.
Positive attitudes toward employee ben-
efits (product feature preference) and the
general reputation of the firm in question
(consumer interaction effects) were high-
lighted 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 recruit-
ment process:
I didn’t 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 can’t move to city X because I
can’t get childcare, it would have made all
the difference to me at that point. (Semi-
Government Utility, Client Manager)
Vol. 17, 3, 181–196 189
 Moroko and Uncles
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, desir-
able 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 that’s really important as well if
you are going to work there and have that
confidence, it’s very good. (Pharmaceuticals
Firm, Sales Representative)
At the transport firm, product feature pref-
erence and consumer interaction effects
served to work against the organization.
Because of the lack of accurate communi-
cations to current and potential staff about
the employment product, rather than just
marketing communications about the con-
sumer 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 it’s 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 it’s 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 it’s
not, this is what it is, this is the experience
you’re 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
190 © 2009 Palgrave Macmillan 1350-23IX Brand Management
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 seg-
mentation 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, high-
quality graduates in business, law and engi-
neering are bombarded with multi-media
campaigns promising exciting careers, pro-
motion, travel and exceptional remunera-
tion – 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 tar-
geted 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 candi-
dates 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 posi-
tions. As most human resources managers
Vol. 17, 3, 181–196
 Employer branding and market segmentation

Table 3: Bases of employer branding segmentation

Segmentation base Segmentation level

Observable factors Examples

Age 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, 1–5 years, 5–10 years 10 years plus)

Physical location Head office/subsidiaries; city/country/region

Unobservable factors Examples

Career focus 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 firm’s
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.
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 back-
grounds and industries, and can be difficult
to reach through mainstream marketing
communications. However, as demon-
strated 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 seg-
ment 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

© 2009 Palgrave Macmillan 1350-23IX Brand Management Vol. 17, 3, 181–196 191
 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 experi-
ence 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 detect-
able 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 segmenta-
tion as a tool for workforce planning in a
financial sense. This appears to be com-
monly referred to in general practice as
‘workforce segmentation’ – indeed the seg-
mentation of employees based on role type
and cost to the firm is an established stra-
tegic human resources tool. A small number
of leading-edge companies are going fur-
ther than this – they are also segmenting
employees and job roles based on their cur-
rent 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
192 © 2009 Palgrave Macmillan 1350-23IX Brand Management
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, qualifica-
tions and experience, and workforce plan-
ning 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 advan-
tageous when developing a coherent
approach to employer branding.33 Under-
standing who to attract to the firm as well
as how to attract them is a direct bridge
between the employer brand and the busi-
ness 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 engi-
neering projects in China and India.
Marketers of packaged goods products
have long used this type of strategic seg-
mentation to arrive at manageable, profit-
able and some would say optimal product
portfolios. Not all products with a large and
reachable consumer market will contribute
equally to a firm’s profitability and strategic
path. Consequently, those product ideas
with lower or slower profitability projec-
tions, or those divergent from the strategic
direction, will be rationalized.34 A similar
logic applies for strategic workforce plan-
ning. By being vigilant about the medium-
to 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 mar-
rying this with the employment product
Vol. 17, 3, 181–196

Who to
attract/retain Skill set, experience, job type, location, seniority required to enact business plan
Disrupters
How to
attract/retain
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 per-
formance rather than potential (an artificial
choice barrier to entry). Conversely, highly
sought after, experienced staff may be dif-
ficult 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 mini-
mizing 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
© 2009 Palgrave Macmillan 1350-23IX
Employer branding and market segmentation
Strategic Business Plan
Profitability Segmentation
Bargaining Power and Choice Barriers Segmentation
Seniority, qualifications, work and pay conditions (eg: golden handcuffs)
Product Features and Interaction Effects Segmentation
Product features, benefits, potential, scope and social desirability
Market/Target Segment Preference
executive education at a world-class institu-
tion that provides a more compelling
employee value proposition to those
employees who are sought after by com-
petitors 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 segmen-
tation), how to attract/retrain (product fea-
ture and interaction effects segmentation),
and disrupters (bargaining power and choice
barrier segmentation).
Brand Management Vol. 17, 3, 181–196 193
 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 experi-
ence 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 high-
volume work over long hours. These pro-
grammes 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 fac-
tors 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 iden-
tified 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,
194 © 2009 Palgrave Macmillan 1350-23IX
gender, age, ethnicity or disability. Further-
more, the extent to which firms are able
to quantify and investigate the various seg-
ments of current and future employees is
limited by the quality of available data.
Some firms regularly monitor employee
attitudes, and in-depth interviewing is rou-
tine, 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 firm-
wide 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,
R7–R8.35
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