Employment Branding in Recruiting, Talent Management

Employment Branding (also referred to as Employee Branding and/or Employer Branding) is an important topic which has recently garnered much attention from both academic scholars and practitioners alike. In the continuing war for talent, organizations are seeking to develop any and all competitive advantages both in national and Global contexts. These organizations must make considerable investments in their public perception and image in order to attract the most highly talented individuals. In so doing, issues of Talent Acquisition, Talent Management and Human Resources become more apparent and salient.

How an organization both designs its Employment Branding strategy and its execution can have both positive and negative effects on its ability to attract and retain its talent.

For example, issue of the psychological contract become more important once an employee is recruited into an organization, and its effects are seen quantitatively in retention and engagement metrics. Additionally, brand strength, the ability to localize marketing messages to local culture, dilution of brands due to the use of as flexible workforce and implications on issues of Diversity and Inclusion and Talent Management especially in generational contexts become issues worthy of discussion.

To gain some insight into this subject, this paper will provide a review of selected pieces of the Employment Branding literature as well as more focused analysis on the concept of the psychological contract that is formed when an employee is attracted by an organization.

It will also provide insight into the relationship between Talent Management practices and the ability of an organization to manage its Employer Brand.

Employment Branding: A Background

The subject of Employment Branding gained recent attention in the early to mid-nineties with the exploration of effective recruiting practices and with the growing interest of organizations on how to create a sustainable human capital advantage.

Traditionally, employment branding is not a subject that was studied by Human Resource academics. However, the subject bridges several fields that are not necessarily considered to be familiar subjects by the profession. Employment Branding can include the fields of Psychology, Marketing, Advertising, Talent Acquisition, Human Resources (compliance and legal based) and Human Capital Management (Talent Management).

Of course, with recent technological advances and the movement of the hiring process more gradually to online and electronic methods, Information Technology became and has become an integral part of the strategy and execution of an Employment Brand.

Due to the current intersection of several fields however, little agreement is found on the definition of branding terminology. The focus of different field scholars also differs and thus the perspective. And although field intersections can be a very beneficial feature in multi-disciplinary topics, it may take some time before real breakthrough in the subject of employment branding are made because scholars are not using the same definition for the subject and thus there is some measure of disagreement and confusion.

Industry has been taking considerable leaps in the execution of their brands however. This can be seen in the dedication of considerable time in mainstream certification courses to the subject of employment branding. For example, the Human Capital Institute, a global organization representing Human Capital and Talent Management practitioners dedicates almost thirty percent of its Human Capital Strategist (HCS) certification to the strategic management and execution of Employment Brands. Organizations such as Sodexo, Southwest and Enterprise Rent-A-Car take the position that their employment brands are a key strategic advantage and a major driver for their internal human resource policies. In fact, Southwest sees it as a key contributor to its commercial success.

Driving this trend, the internet is providing more freedom of expression about organizations and their employment practices. Organizations are becoming more aware that they can no longer control their brand (commercial or employer), and that they can either refrain from actively engaging their applicants and constituents or they can invest in their branding both internally and externally while mitigating any negative effects that may arise because of dissatisfaction of the process. Thus, employment brands are no longer simply a human resource issue (or a Marketing one), but they are a far-reaching strategic key for any organization that wishes to succeed.

But what are the driving forces of an Employment Brand?

Components and Drivers of an Employment Brand

We use Miles et. al.’s definition because it seems to fit well into our discussion, and to illustrate the importance of how we define Employment Branding.

Miles and Mangold define an Employment Brand as the “process by which employees internalize the desired brand image and are motivated to project the image to customers and other organizational constituents”.  This definition is more suitable for our purposes, because inherent in it is the understanding that an employment brand is controlled by the employees and not by the employer.

This is a key strategic position to undertake for any organizations wishing to be effective in the management of their brand, and has major strategic and tactical implications. More specifically, its implications are evident in the effects of the psychological contract exhibited by employees in the post recruitment phase.

The components of an employment brand as with any other organizational initiative begin with the organization’s mission and values. After all, they entail what the (marketing) messages will be and how they will be executed. In other words, they guide the organization’s desired image and brand. What does the organization wish to be known for, or more importantly—in the context of employment, what is it doing well? A strategic top-level discussion of this must always take place in the beginning stages to ensure that the correct message and delivery of this message is executed.

Once a desired image is decided upon and understood, suitable internal and external modes of message delivery and communication must be considered and executed. From the employee’s perspective all interactions with the organization are pertinent to its brand image. Thus, Human Resource practices, management actions and attitude, culture strength and type, employment conditions and methods of message delivery are key tactical factors. For external applicants and potential employees, an alignment with their personal values and individual culture as well as suitability to their wants and needs are dominant variables to be considered. It is at this stage where the psychological contract begins to develop, and where strategy and execution become overwhelmingly important.

As we defined it earlier an Employment Brand is in the minds and employee messages (externally and internally) that are delivered to internal and external stakeholders by those employees.  In other words, a brand image lives in the psyche of the organization’s human capital. Thus, knowledge of the desired image and effectiveness of meeting the expectations of the formed (at the hiring stage) psychological contract are factors to be considered. These two factors stem from the strategic brand decision, company values and mission, and methods of message delivery discussed earlier.

A factor which is rarely discussed in the academic and professional arenas is the implication of Employment Branding in a Global context. Although this particular factor is not prevalent for the large majority of institutions, it is becoming a more important factor for Multinational Enterprises seeking to attract and retain the best talent. Issues of mixed messages, cultural differences and diversity are directly related to an organizations’ Employment Brand in its ability to attract local high talent, and in its ability to meet employee requirements to satisfy any psychological contract formed.

It is not clear from the literature if employment branding best practices require the preferred Talent Management process of “Standardize, Globalize, then Localize” or if employment branding requires a different approach. However, it is clear through our investigation of the topic that more empirical research is needed.

The effectiveness of these components are measured by several qualitative and quantitative metrics. For example, turnover (retention) is a dominant factor especially in the stage of establishment of the employment relationship, and much attention must be paid to this metric. As time passes and the employment relationship matures, employee satisfaction, engagement and productivity become metrics of choice to measure the strength of a given brand. However, because we take a view incorporating both internal and external brand effectiveness, one can argue that factors such as favorable reputation and customer satisfaction as well as general business success are good as components in the outcome of an employment brand.

Regardless of how we measure the success of an employment brand externally or internally, the inherent long-term failure of employment branding may be found in the concept of a psychological contract. This is a central issue to branding in general. We discuss this in the upcoming section.

The Psychological Contract

We define the Psychological contract as the “mutual beliefs, perceptions and informal obligations between an employer and an employee” (see Onway et. al., 2005). In essence, the psychological contract is the unwritten promise created by the Employment Brand of a particular organization. When an organization claims that it is a great place to work because of its people, an inherent assumption in the mind of the potential employee evolves into “we take care of our people and appreciate them”.

When the organization claims that it’s a fun and relaxed atmosphere, the message sent is “we’re a low stress environment where having fun is appreciated and reflected in our activities”. As you can see the message sent to an applicant and later an employee has direct effects (intuitively) on the message perceived by that employee. Issues of unsatisfied psychological contracts occur when the difference between what is promised and what is delivered is vast or generally inconsistent

This effects of a psychological contract are not seen in the recruitment or talent acquisition phase because the delivery of the promises has not been executed as of yet. This creates an interesting dynamic: Overpromise and under-deliver—and retention, engagement, satisfaction and productivity are at a high risk of being reduced; under-promise—and over deliver (or deliver exactly as promised) and you increase the risk of not attracting the right talent for your organization.  If we were to visualize the relationship between those two trends, we would be akin to comparing it to a chemical reaction under a fragile equilibrium. Our interest as practitioners should lie in the maximization of both trends, and to eliminate or mitigate any negative effects caused by both sides of the branding equilibrium.

This provides us with an even more interesting conclusion: An organization with sub-standard employment practices that invests heavily in its Employment Brand and attracts top talent would feel the negative effects of an unsatisfied psychological contract almost immediately, thereby contributing to even larger investments in Employment Branding to ensure higher ability in its attraction of top candidates. This creates a cycle of what we will term negative synergy.

This organization would actually experience negative effects from its Employment Branding strategies and efforts. An argument can be made that they would be better off not investing in an Employment Brand. If the expectations are not provided and heightened, then the organization can still meet basic expectations and would thus satisfy their psychological contract. “We’re not promising anything” the organization would be effectively communicating; “Well, I’m not expecting anything” the employee would effectively respond. There is considerable evidence to support that unmet promises cause a heightened negative effect that would not exists had the promises not been made initially.

This is an important point to note because it guides our strategic perspective on employment brands in general. We can draw two major points from this proven trend.

The first being that if an organization decides on implementing a successful brand it must use its actual strength and promise only what it will deliver. The second is that Human Resource professionals can use Employment Branding as a driver to improve their internal Human Resource systems and policies. They can through qualitative then quantitative analysis, measure the difference between the applicant’s (now employee) expectations and how successful they were in meeting them. If there are visible differences then they can use this opportunity to increase buy-in for internal policy or system changes. Of course, the easy method would be to simply not promise all the things that were not met, but then that would be a lost opportunity.

“We’re not meeting our promises so let’s use this feedback to do better” would be the concept at use. This later suggestion is based on the premise that organizations traditionally don’t change unless they have to. The best way to drive change (in an organizational context) is to relate it to their ability to perform for their stakeholders (especially their owners or stockholders).

Thus the Employment Branding process itself can become a key strategic driver for the continuous improvement of human capital and Human Resource practices in a given organization. This is a compelling opportunity.

Let us then discuss some general examples to help illustrate both issues of psychological contracts and their relationship to Talent Management and Human Resource practices.

The Psychological Contract in the Diversity Context

Organizations are beginning to understand the necessity for a diversified and inclusive workforce. This can be seen in the increase of Diversity and Inclusion rhetoric in professional, academic and mass media contexts, but is more visible in the type of attraction methods used by organizations and especially multinational enterprises.

As with all successful corporate diversity programs and per our discussion earlier about the components of an Employment Brand, an organization must begin by identifying its goals, mission and values. It can then decide on the most strategic desired brand image that it will require in achieving its mission and values.

The argument we make in this section is that as part of that process there is an unavoidable risk of breaching the psychological contract. In other words, in the context of diversity and inclusion, brand strength can be detrimental even if the apparent psychological contract has been met.

A good example of this is Enterprise Rent-A-Car. Enterprise is considered to have one of the most attractive employment brands for young aggressive professionals.[1] However, one must question their generational diversity efforts from the images displayed on their careers website. Although they are not explicit in their attraction for young professionals (that would be illegal in the United States according to Title VII and others federal and state laws) the culture created from their particular employment brand is one which is attractive to young male professionals. OF course, they simply state that Enterprise is just a good place for anyone to “start a new career”, but the effect itself is one of attraction of young males.

As a thought experiment let us consider this particular case. You are a female in her mid-career and you are dissatisfied with current opportunities in your field. You decide to apply and consequentially are accepted as an underwriter at a local enterprise rent-a-car all the while your psychological contract is developing towards the idea that this is a diverse place suitable for all ages, sexes and career points. This is what Enterprise claims in their branding messages after all. Once you begin your new assignment, filled with enthusiasm and excitement, you find that 98% of their employees are under the age of 25 and male, and thus a culture inevitably develops that reflects this.

How would you feel?

Most employees in this position would feel that Enterprise is not (bold added for emphasis) a place for all generations and career points regardless of Enterprise’s efforts to 1- make it so and 2-say that it is so. Whether the perception of a psychological contract has been met or not is independent of what the organization feels but is mostly dependent on what is actually happening.

The example illustrates the weaknesses of an Employment Brand in the diversity context. Organizational cultures—like brands are not in the control of the organization. Of course the organization can guide both of them to where it would like them to be, but in the end they both reside in the psyches of the employees and thus are controlled by the employees and their social networks.

In this case, you, the female professional, came into the organization with expectations that were not met, regardless of the effort (real or not) that was undertaken to meet them. On the other hand, Enterprise claim that their workplace is a great place for anyone to work, yet their brand attracts young male professionals in large doses which effectively limits the flexibility of the culture and dooms it to be young and male dominated.

Although unproven and potentially controversial, one can make an argument that Enterprise seeks young male candidates for their branch positions, but due to government laws and regulations cannot explicitly say so. Instead they create a brand which is attractive to young male candidates and explicitly say that it simply a great place to start a career regardless of your current career progression. However, there is no direct evidence to support this theory.

When an organization develops a strong brand in the context of diversity it is bound to be weakened by its internal status and existing culture, thereby contributing to the failure of meeting the psychological contract for some constituent groups. Thus we can conclude that in the context of diversity, an organization needs to either state their diversity position accurately or dilute the diversity portion of their branding messages. However, if they wished to be truly successful and as stated earlier, they can use their brand as a driver for their internal policies and practices and change internally to reflect the brand that they espouse.

The Psychological Contract in the Talent Management Context

We define Talent Management as the deliberate strategic Human Resource management practices that concentrate on attracting, retaining and developing the high potential employees of any given organization. Although, this definition is not entirely based (word for word) on any single academic or professional article, a strong argument can be made that there is no general agreement on what talent management actually is.

Consequentially, we define High Potentials (HIPOs) as the key and critical members of any given organization that contribute the most to the organization’s success.

In the context of talent management it is intuitive to see how not meeting the expectations and satisfying the psychological contract of a given employee can be detrimental to an organization.

For example if an organization espouses that it develops its employees and provides opportunities for them to develop themselves and then does not provide them the time to do so the feeling of a breach of the psychological contract could be in effect. This type of situation is a common occurrence and is a contributing factor for high turnover rates in fast pace organizations that attract highly talented individuals. This is because high talent traditionally tends to enjoy self-development more than the average employees and so would be prone to be attracted to organizations that brand themselves as organization with excellent development opportunities.

But it is not only development opportunities that could be in question but the entire Talent Management spectrum. This can include succession management, job rotation and change, career development and several other segments of the Talent Management spectrum.

The talent management context is the easiest to understand from the three sections we have chosen for discussion as they relate to the psychological contract for this exact reason. Internal policies in this context drive your brand messages, and most practitioners see the adverse effects if it is not so. For example, only espouse growth as a person in your company in your brand messages unless you had a structures personal and professional development plan system in existence. Only espouse, flexibility and convenience to family values if you have any active flexible schedule policy or if you provide excellent benefits for families etc. In the context of branding Talent Management practices, all an organization will need to accomplish is saying exactly what it currently does.

If an employer chooses to brand itself as a company that “chooses its leaders from within”[2] they should already be active in succession management and planning activities, otherwise they ensure complete breach of the psychological contract. In this context, it is even more important than the previous section for diversity, because the employer has direct control over this area of the brand. Unlike diversity efforts where efforts made may not always equal results received in the hiring of a diverse workforce.

We see effects of this potentially catastrophic component of an Employer’s Brand more salient than any other part of the brand component in levels of engagement and satisfaction. Or in the least we only measure this component there in this way because it is the only currently available method of measuring brand effectiveness internally in an organization. (Lewis et. al.)

It is clear however, that to satisfy any organizational promises in the context of Talent Management is to be consistent and to promise exactly what is delivered and not what the organization is trying or hopes to deliver.

In the Global context does that change?

The Psychological Contract in the Global Context

The short answer is, no it does not change—keeping promises is a universal value, and keeping promises is the underlying concept behind the psychological contract. However, the definition of what is a psychological contract and what is not could change, as well as the effectiveness of an Employment Brand in a particular culture or in another.

For example, an organization may wish to create a diverse and inclusive workforce which includes the LGBT community, and although these types of categories are not illegal in most countries, they are (unfortunately) still considered to be unacceptable in many countries. For a global organization where employees can take on international assignments or work in different regions, the failure to provide a safe and harassment free work environment in the host country can result in the perception of breach of psychological contract. To contrast, an employee who is considered to be a high potential in a host country, who was attracted to a particular organization due to its local values may find it difficult to accept that the same organization would permit the hiring and promotion of professionals that he/she believes are inadequate morally or socially.

This dynamic supports the Human Capital Institute’s idea of “Standardize, Globalize then Localize”, meaning that policies should be standardized in the home country, globalized because of their effectiveness, but that they may fail if not adjusted to local customs and culture.

To add, the contract itself may be formed without home country awareness that it did. For example the United States is an Employment at will Country (in general) meaning that employees are free to leave at any time without obligation, and that employers are also free to terminate employees without reason or contract. However, in some countries employment is expected to be permanent (this goes back to the Talent Management section). For a Global organization, simply the hiring of an individual in a host country signifies a psychological (and sometimes legal) contract. If an organization wishes to relocate or simply increase the quality of its internal talent it may cause a breach of psychological contract even if its Employment Brand does not promise this.

This later point allows us to conclude one additional major point in this paper: When an Employment Brand is created and promoted, cultural assumptions are made that become part of the psychological contract associated with that brand, regardless of employer involvement.

The implications of this conclusion is that an organization in a Global context must be vigilante at both the type of branding message and at what are the inherent cultural assumptions associated with any promise that is made in their branding messages. Not doing so can cause internal organizational strife in the host country and problems discussed earlier associated with breach of psychological contract.

In other words, Employment Branding rules discussed in this paper may not necessarily hold true in a global context but would need to undergo a cultural attunement.

Final Thoughts

Employment branding is an important topic which growing in importance as the competitive nature of the attraction and retention of high talent continues. However, branding one’s employment practices in an effective way is much more complicated than it originally seems. Organizations that do not pay particular attention to the satisfaction of any given psychological contract will suffer long-term damage to their reputation and general damage to their Human Resource budgets. Additionally, they will never be able to hold the only real sustainable advantage that good Human Capital practices provides.

The context of employment branding must be considered and the components of the brand must be broken down and understood. A great looking website is never enough, but conversely an understanding that the majority of an organization’s Employment Brand is carried in the psyches of its employees and not in the marketing materials that the organizations uses to send messages to HIPOs.

We also conclude that much research is needed in this subject as it applies to Global organizations, and that through basic thought analysis organizations can conclude that their current methods of Employment Branding may need adjustment so as to not breach any given psychological contract in effect.