Impact of Effective Employer Branding on Recruitment and Selection Processes - Literature review Example

Impact of effective employer branding on recruitment and selection processes Introduction The present business environment is continuously evolving and the existing notion therein is changing at a rapid pace. These progressing developments tend to have significant impact on the job market. Collins (2001) emphasised that the competition level in the labour market is increasing tremendously and recruitment and retention of employees within a firm has become a serious concern for various organisations. It was also determined that sourcing new employees for filling critical job roles in organisations for meeting growth projections is also taking difficult shape. The current situation in the employment market is often being referred as ‘war for talent’. Collins and Stevens (2002) further contributed that the talent war is most prominent in the area of knowledge workforce. The authors define knowledge workforce as employees who have necessary education and skills such as computer knowledge that are essential for driving organisational growth, performance and innovation in the changing global economy. The financial crisis of 2007-08 had significant negative impact on the labour market globally but as the national economies are recovering in terms of growth, employment opportunities are emerging at a rapid rate. The growing opportunities in the job market has made the situation complicated for various firms to retain their existing employees as companies are vying for better workforce by means of attractive compensation packages. However, the situation is relatively more complicated considering other factors such as demographic changes, voluntary retirement of nursing employees and relatively small number of employees interesting in succession (Collins and Stevens, 2002). Cappelli (1999) argued in this regard that not only economic factors but also socio-cultural factors play an important role in increasing demand for external talent. Cappelli (1999) acknowledged that employee turnover is growing at organisations because attitude of employees towards workplace is changing and their commitment towards a single firm is declining gradually. Mass layoff during recession and changing staffing pattern (greater employment of contractual employees) has made individuals more concerned regarding their personal career growth and development opportunities instead of security associated with life employment at a particular firm (Cappelli, 1999). Collins and Kanar (2013) emphasized that workers are continuously evaluating their employment choices within and outside their current organisations for advancement of their professional skills and improvement in individual marketability. Therefore, the current struggle within firms is not only about retention of existing employees but also about acquiring the best of the available workforce. Consequently, recruitment as a human resource practice is increasingly gaining importance for its contribution towards organisational growth and competitive advantage thereof (Taylor and Collins, 2000). Employer branding is presently being evaluated as one of the HR tools to differentiation and gaining competitive advantage for attracting fresh talent by most academicians, organisations and scholars (Cable and Turban, 2001; Collins and Stevens, 2002; Lievens and Highhouse, 2003). It was further gathered that the emerging literature on employer branding has been heavily drawn on marketing theories associated with consumer brand equity. In this paper, employer branding has been discussed in an elaborate manner considering its impact on individual decision making regarding employment opportunities. Cable and Turban (2001) emphasised that brand of an employer is considered significantly important when individuals evaluate their employment options. The paper will assess key literature associated with employer branding and develop understanding regarding role of employer brand in attracting and retaining talents in an organisation. Theoretical perspective on employer branding It has already been discussed that the essence of employer branding has been drawn from the branding theory of marketing. Organisational brands generally convey the benefits associated with a product and service to the potential consumers; likewise, employer brand reflects the potential benefits associated with employment in the specific organisation for an employee (Ambler and Barrow, 1996). Branding is generally defined as the process of developing a unique image and offering name to a product or service in order to develop special position of the product in consumer mind. Branding is usually done with the help of advertising campaign that has an unswerving theme and should be controllable by the organisation. Branding is a very broad subject and has multiple definitions thereof. However, the generalised idea of the same with respect to attraction, recruitment and retention thereof implies that the sole purpose of branding an employer or an organisation from HR perspective is to reflect the viewpoints of current and potential employees that their requirements related to the job will be fulfilled by the employer. Employer branding is similar to product branding in several aspects. For instance, consumers purchase brands for the purpose of product differentiation and superiority; in a similar manner, brand equity of an employer helps potential employees to evaluate and differentiate between organisations (management) and contribute towards their employment oriented decisions (Collins and Stevens, 2002). In this regard, Berthon, Ewing and Hah (2005) interjected that employers with high brand equity are perceived as comparatively attractive with respect to those having low brand equity by job seekers. The appraisal of any employer brand is actuated by certain factors such as employee perception and awareness about the employer that can possibly be developed by means of word of mouth, personal experience and marketing campaigns (Wallace, et al., 2014). The practice of branding is borrowed from marketing and has been employed in human resource management for enhancing desirability of an employer to job seekers and potential employees (Backhaus and Tikoo, 2004). In other words, employee branding can be viewed as a blend of HR practices and marketing principles which has been developed based on the notion that consumer’s perception of a product or service is often reflected by means of employees’ perception of about the employer as a brand (Wallace, et al., 2014; Backhaus and Tikoo, 2004). Fyock (1993) pointed out that as advertising is employed to communicate various features of a product or service, employer branding is a variation of advertising technique where jobs as a product is marketed to potential employees as prospective consumers. Ambler and Barrow (1996) defined employer branding as a package that comprises various economic, psychological and functional benefits that can be acknowledged with the employing firm and reflect perception of potential employees. Cooper (2008) however, discussed employer branding in terms of a company’s offerings. He proposed that employer branding should be exercised as a long term strategy for management of employee perception and understanding regarding the organisation. He appended that employer branding can be considered as a communication method where brand positioning of the company is established in the marketplace of human resources (Cooper, 2008). Authors such as Einwiller and Will (2002) observed that no employer can undertake the branding process independently without including its business activities and stakeholders, namely employees. They further suggested that various stakeholders of a company including employees, investors and consumers are an essential part of employee branding which takes in account communication and organisational behaviour. Interaction between employer branding and decision making It has been observed that very limited research has been conducted with respect to employee branding yet strong evidence has been gathered by scholars. These evidences suggest that perception of potential candidates of an employer is strongly related to intention and behaviour of the applicants towards the organisation (Turban and Cable, 2003; Collins and Han, 2004). In this section, dimensions of employer brand have been discussed and relationship between these dimensions and choice decision of applicants regarding employer has been established. Dimensions Awareness: the success of employer branding is deeply associated with awareness of the recruit about the employer. Cable and turban (2001) highlighted that a job seeker should have sufficient knowledge of the existence and business activities of an employer before applying for job at the organisation. They further emphasised that awareness is elemental to employer branding as it helps applicant to establish specific association with the organisation. Researchers of HR practices revealed that candidates exhibit great degree of association with organisations that they are aware of compared to those they are less familiar with (Brooks, et al., 2004). Additional study by scholars suggests that familiarity of an applicant with a particular company affect development of either complex association or surface association during processing of recruitment activities of the company (Rynes, Bretz and Gerhart, 1991). Surface association: Surface association to employer brand involves overall evaluation of the brand and reflects its attitude. Collins and Stevens (2002) referred to surface associations as organisational attraction. It was gathered that organisational attraction is an important outcome among others that are studied within the purview of literature related to organisational attraction. A number of authors exclaimed that organisational attraction can be varied in nature; it can be towards job, employers and/or the organisation (Chapman, et al., 2005). A meta-analysis by Chapman, et al. (2005) revealed that attractiveness towards employer can have different reasons beyond characteristics of a job and organisation. Complex association: It has been ascertained that potential job candidates also develop definite associations regarding firms as employers. Complex association regarding employer brand can be defined as any apparent characteristic of any specific organisational element which reflects organisational behaviour and experience and is utilised by employer for decision making. Such kind of associations is considered essential because they serve the satisfactory needs of an individual regarding experience within an organisation. These experiences range from job experience to work environment (Collins and Stevens, 2002). Highhouse, Livens and Sinar (2003) further contributed in this regard by suggesting that complex associations related to employer brand is significantly different from those of products but in a broad sense, they bear certain similarities with consumer brands such as symbolic, experiential and functional values. Decision making The reaction of a potential applicant towards a firm’s recruitment policies, job application processing system, turnover decisions and others by means of word of mouth (positive or negative) and preference towards a particular organisation over its competitors have significant impact on employer brand equity and image. Barber (1998) categorised recruitment in three phases and explained that in the initial phase, candidates screen employees based on available information and scope of multiple opportunities. Collins and Stevens (2002) strengthened this argument suggesting awareness and various associations with employers thereof can have strong impact on decision making and applicants’ attitude at the particular point. Brooks et al. (2004) established through evidence that applicants with higher degree of associations with an organisation tend to exhibit interest and reasons for working in the firm. Additionally, Chapman et al. (2005) determined that surface associations such as organisational attraction have significant positive impact on decision related to available job choices. Corporate brand visibility Recruitment practices are considered as key activities of the HR department which has significant influence on perceptions about the firm as an employer and employer brand equity; even so, the conviction of job seekers can be influenced by a number of factors that are external to an organisation and its direct control. Corporate brand visibility has been discussed in this section in context of the paper because it was observed that it is one of the possible methods of outlining various non-HR factors that exert an impact on perception of potential employees towards employer brand. Generally, corporate brand visibility is related with impression of product and service brands of a company on potential employees’ job choice. However, in this paper, besides direct factors, indirect factors such as reference and word of mouth have also been taken in consideration so that their impact on development of brand associations in job seekers’ mind is established (Collins and Kanar, 2013). Aaker (1991) and Keller (1993) explained that corporate brand visibility is the extent to which firms create awareness of its name, logo and/or symbol by means of advertising and marketing campaign to stimulate purchasing behaviour and intension among consumers. Keller (1993) discussed corporate brand visibility with respect to core marketing whereas Barber (1998) tried to establish its implication with respect to job seekers’ preference. The author extended on viewpoints of Keller (1993) and argued that brand visibility rarely provide sufficient exposure to work environment and other workplace related attributes to job seekers. Instead, it develops positive insight about the brand in the mind of the potential employee with help of surface associations (Barber, 1998). Contrary to these viewpoints, authors such as Cable, et al. (2000) and Gatewood, Gowan and Lautenschlager (1993) exclaimed that prospective candidates eventually develop awareness regarding a particular organisation as employer via corporate advertisements. In this context, Cable and Turban (2001) argued that positive attitude of job seekers towards an organisation can be developed with greater visibility as this often act as a indication of quality of the company as employer. Gatewood, Gowan and Lautenschlager (1993) further pointed that organisation with greater amount of corporate visibility attracted comparatively more number of suitable candidates. Impact of corporate brand visibility on recruitment It is noteworthy that HR practices such as recruitment do not have independent existence and recruits who are interested working with a particular firm develop their interest through exposure to products or services of the company or its marketing campaigns (Collins and Han, 2004; Cable and Turban, 2001). Therefore, it is necessary to take in consideration the effectiveness of informative recruitment practices with respect to corporate brand visibility. Collins and Han (2004) and Collins (2007) witnessed and asserted that corporate brand knowledge and prior exposure to products and services of a company can moderate effectiveness of informative recruitment strategies. Collins (2007) further argued that relatively less informative recruitment practices can act as substitution of corporate brand visibility. Both the measures deliver less information regarding organisational culture and opportunities and instead enhance surface associations and awareness regarding employer brand. As these measures provide similar employer brand associations, it can be gathered that low information providing practices have positive impact on job seekers and enhances their interest about association with the organisation as employer. Contrastingly, it was further gathered that highly informational recruitment practices enhance the complex brand associations (Collins, 2007). Perspective of potential employee or job seekers Keller (1993) explained that potential employees have a propensity to evaluate various information regarding organisations for developing a multifaceted image of various employers. He appended that while considering employment decisions, the characteristics of employer brand from potential employee’s perspective can be classified as instrumental (functional) and experiential (symbolic). Based on these characteristics, potential candidates develop attractiveness towards an employer which further enhances valued of the brand to the candidate. Functional (instrumental) benefits of employer brand reflect certain specific characteristics such as organisational objective and various tangible factors that can be available or unavailable to employees depending upon the employer. From perspective of recruitment, these attributes include various motivational factors namely remuneration, training and development, compensation, job security and prospect of promotion (Lievens, Hoy and Schreurs, 2005; Cable and Graham, 2000). Experiential benefits lay emphasis on cognitive stimulation or sensory satisfaction with respect to employer brand and highlights experience of working with a particular employer. Beside employment experience, these benefits can include cultural factors within the organisation such as team accomplishment, travel opportunities and job diversity (Ambler and Barrow, 1996). The authors further explained that symbolic benefits are primarily related by means of intangible, abstract and subjective attributes such as personal growth, self respect and individuality. Consequently, it can be presumed that symbolic values focus significantly on intrinsic benefits such as personal development and expression, need of social approval and self esteem, from the employment (Ambler and Barrow, 1996). In this regard, an alternative perspective was developed by authors such as Berthon, Ewing and Hah (2005). They suggested five dimensions (benefits) of employer brand which can bear certain relevance to potential recruits. These benefits are social value, interest value, economic value, application value and development value. The interest value reflects that potential employees develop certain perception and expectation from the preferred organisation such encouraging work environment, enticing work culture, innovative policies regarding employment and greater utilisation of employee ingenuity. The social value speaks of the extent to which the firm offers future employees healthy organisational atmosphere in terms of team management, open communication, amicable behaviour among employees and friendly and helpful work relations. Economic value is related to direct and indirect financial possibilities such as attractive remuneration package, better career prospects and job security. Development value recognises scope of personal and organisational development by means of career augmenting experience and team achievements. Last but not least, application value is related to the perception that the employer will provide scope of skill and knowledge application and development through mentoring, training and coaching to the potential employees (Berthon, Ewing and Hah, 2005). Authors such as Lievens, Hoy and Schreurs, (2005) further contributed in this regard by attaching three more benefits such as prestige, culture and travel. Cultural benefits indicate unrestricted and supportive work environment and organisational management. Travel benefits are associated with remuneration and experience employees gain from work related travelling. Prestige needs reflect that job appointment to a particular employer will enhance reputation and respect of the appointee. The authors further appended that anticipation of all these benefits by potential employees has a significant impact on the choice of employer by the potential recruits. However, not all attributes may have equal importance to all the candidates. Consequently, importance of various values namely functional and symbolic for different candidates should be established carefully as these values have long term impact on the employment of a potential employee (Ployhart, 2006). Employer branding: recent research on talent attraction Considering the increasing competition in the labour market, qualitative and quantitative researches have been undertaken in significant number to establishing relationship between employer branding and employee attraction and retention. In this regard, Kucherov and Zavyalova (2012) researched in various Russian companies and MNCs thereof in industries such as telecommunication, oil and gas, banking and professional services. The determined that only eighteen out of one hundred twenty three companies were categorised as preferred employers while the rest were not considered desirable. It was also established by the authors that organisations that are mostly preferred by employees and potential employees in Russia have relatively strong level of employee branding compared to other companies. It was also observed by the authors that strong employer brands invested significantly in various training and development practices and they have relatively less employee turnover ratio. Additionally, it was gathered that the organisations that have strong employer branding are relatively more engaged towards employees in terms of collaborative decision making as well as supportive management practices. Based on their research, Kucherov and Zavyalova (2012) indicated that cultural benefits and experiential values were observed to be main attracting factors to present and potential employees in various organisations in Russia. Wilden, Gudergan and Lings (2010) recognised in their study potential candidates in job market seek information about organisation more than what is available or provided by the same. Potential employees tend to gather greater amount of information about employer brand with the help of word-of-mouth and their peers. The authors expressed their concern that word-of-mouth and peer opinion are highly subjective and present high possibility of misinterpretation of the brand message projected by the employer brand. Wilden, Gudergan and Lings (2010) also highlighted that job seekers with certain amount of work experience exhibit little interest in employer branding while inexperience employees tend to value employer branding because of the strong impact of the corporate brand on their resume. Taking in account all these factors, a number of authors stated jointly that employer brand should communicate specific information to job market instead of general facts for being considered as attractive (Fyock 1993; W H Huang, W Y Huang and Chiu, 2011; Wilden, Gudergan and Lings, 2010). Other authors added that employer branding is an essential part of employee attraction and retention strategy and can be conducted in a number of ways such as sponsorship activities, public relation, social network, job portals, and recruitment advertising and so on (Carmichael 2009, Minton-Eversole 2009; Russell 2009). Conclusion The constantly evolving business world has led to significant rise in demand for competent workforce. However, the labour force is also undergoing significant changes and consequently is exhibiting preference towards brand name. Employer branding is not a recent concept but has been a lot in discussion in recent years as employees are no more ready to stay in a single firm for the purpose of job security. They are ready to change their employment choice to a better organisation that has greater brand value and equity in terms of market exposure. It was gathered from assessment of various literary works that there are certain factors which influence potential job aspirants’ choice of organisation. These factors are awareness and perception about the organisation. Employee branding has been heavily drawn from branding theory of marketing and implies that branding of an employer provides it greater exposure in the job market and is extremely constructive for HR practices, namely, recruitment. It was also observed that a number of organisations are preferred more by employees and job seekers than others irrespective of its objectives and features as they are only influenced by brand name. 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