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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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Introduction

Over the past half a century the world has become increasingly globalised, highly competitive and there is a huge pressure to innovate. Also, this period is coincided with perhaps the biggest revolution since the industrial age – The IT revolution. Due to this, the world has become highly interconnected and accessible. For the organisations, the availability of talent is not limited by geographical boundaries and for the candidates the choice of employer has grown drastically. The war for talent has become a reality as organisations are fighting for the best talent. Thus, human capital provides them the necessary competitive edge that no other technology or process can provide. These organisations are increasingly reviewing their employee relation strategies in order to attract, motivate and retain the workforce. This ability of the organisation to attract, motivate and retain talent has become an important strategic component for their corporate success. Hence, it has become crucial for these employers to have a sound and comprehensive human capital strategy to act as a key differentiator amongst its competitors.

In the light of these developments, firms have started applying branding principles and practices in the area of human resource management. This application of branding principles to human resource management has been termed as Employer Branding (Backhaus and Tikoo, 2004). Firms appear to be spending considerable amount of resources in various employer branding campaigns which indicates that they are finding certain value in these practices (Backhaus and Tikoo, 2004). The employer brand can be defined as the package of financial, economic and psychological benefits provided by the employment and identified with the employment company (Ambler and barrow, 1996). The relationship between the employee and employer is a series of exchanges that forms an integral part of the business model. The employer brand denotes the reputation of an organisation as an employer rather than a broad corporate brand reputation.

Employer brand is of significant strategic importance. A powerful employer brand not only attracts talent but also improves employee relationships at the workplace, leads to better productivity and loyalty. It also helps in increasing the service life of employees and decreases the job hopping rate (Yang Chunping and Li Xi, 2011). Although there is growing popularity of the topic in the human resource diaspora, a small body of literature do exists on the topic, but there are a lot of gaps in terms of academic research on employer branding. Accordingly in this study, we tried to bridge this gap by identifying the impact of employer brand on employee engagement within the Indian IT sector. We examine the correlation between the dimensions of employer branding and the engagement drivers in this sector.

Literature Review

What is employer branding?

A brand is a name, design, symbol or sign or combination of them which is intended to identify the products of a seller or an organisation and which differentiates it amongst its competitors. Branding was only used to identify or differentiate among tangible products but over the turn of the twenty first century it has also been applied to differentiating people, places and firms. The term Employer Branding was first coined by Ambler and Barrow (1996) in their paper. They conducted in depth semi structured interviews with respondents from 27 companies and concluded that the concept of brand can also be applied to employment situation. They defined employer branding as the package of functional, psychological and economic benefits provided by employment and identified by the employing company. In 2004, Dr. John Sullivan defined employer brand as a targeted, long-term strategy to manage the awareness and perceptions of employees, potential employees, and related stakeholders with regards to a particular firm. He says that the employer branding strategy only works when consistent effort is made towards sound image and business management that would make the organisation a good and attractive place to work. On the same lines the Conference board report 2001, proposes that the employer brand establishes the identity of the firm as an employer and it also highlights the firms policies, behaviours, and objectives towards that of attracting motivating and retaining the firm's current and potential employees. Employer branding is viewed as an emotional attachment and identification between the firm and its employees (Crain, 2009). These definitions indicate that employer branding involves promoting a desirable image of the organisation as an employer, both within and outside the organisation. Since there are so many dimensions of employer branding, the focus of this study plays an important role. Employer branding, in this study is operationally defined as an inductive character of the organisation that propels the existing employees to show gratitude towards its employer via increased contribution and engagement.

Developing an Employer Brand

The term employer branding is the application of branding principles to the area of human resource management. But building the employer brand is not an easy task. The brand is carefully crafted through various strategies and is portrayed to the outside world via various channels. The image built for the outside environment should be supported by the internal image that the organisation has. Employer brand is a promise to the candidates about the tangible and in tangible benefits that the firm would provide, thus when the candidate enters the organisation as an employee that promise needs to be upheld. Thus we can view the employer brand as a set of promises that can be viewed from the external environment and a set of internal process supporting those promises in terms of tangible and intangible benefits. Thus building an employer brand not only focuses on the external environment but also on the internal environment.

Backhaus and Tikoo (2004) developed a three step process to develop an employer brand. First the firm should develop a key set of values and conceptualize them so as to offer them to prospective and current employees. These values will be central to the message that would be conveyed by the employer brand. But this value proposition needs to be developed after a thorough audit of what the firm believes, its mission and vision, its best practices and the important elements of what makes a great place to work. Second step is a straight forward step of external marketing this value proposition focusing solely on prospective candidates. This external marketing is done via various channels like advertising, hiring practices and strategies. Third, and the last step consist of internally marketing the employer brand. This involves delivering on the promises made to the prospective employees. This step also entails embedding the value proposition in the culture of the organisation.

Sullivan (2001), talked about the key elements that forms a successful employment brand. He listed eight such elements. First, a culture of sharing and continuous improvement. This forms the foundation of the employment brand that the senior management team encourages measures and reward the sharing of best practices. Second, a balance between good management and higher productivity. By sharing its best practice the firm must look good to the outside world but this shouldn't come at the expense of decreasing productivity, thus a fine balance needs to be maintained amongst these. Third, obtaining public recognition. Through this the organisation appears to be more credible amongst its target audience and thus public recognition contributes highly towards building an employer brand. Fourth, employees proactively telling stories. When the current employees speaks highly of the firm they work in they become its flag bearers and their messages spread faster than anything else. Fifth, getting talked about. When a hype is created about an employer it creates positive publicity towards the employer brand. Sixth, becoming a benchmarking firm. When different firms look upto an organisation it to benchmark against, it effectively build a sense of huge brand in the competitors mind. The processes that the organisation builds should become industry wide benchmarks. Seventh, Increasing candidate awareness of best practices. Just building the best practices is not the entire story, the organisation should be able to widely publicize them and create a buzz about them. Eight, branding assessment metrics. Once an employer brand is built, it needs to be measured and continuously improved. The relative success of the brand needs to be measured regularly so that any required course correction required, can be done instantly.

Hewlett associates also defined five steps towards building a strong employer brand. First step involves understanding the organisation, this entails in depth audit of the entire organisation to understand the best practices, values system and the culture. Second step involves creating a compelling brand promise for the employees that is in line with that for the customers. Third is to develop metrics to measure the fulfilment levels of the brand promise, but external and internal. Fourth, aligning all the practices and processes to mirror the brand promise developed in the earlier stages. Fifth and the final step involves executing and updating.

We understand that developing the employer brand is not an easy task as it involves pulling the entire organisation, its culture and all its people in one direction. Such a humongous task takes more than years of practice and reinforcements. General Electric has been building a people centric organisation since the world war 1, and now has a brand that is difficult to imitate by its biggest competitors.

Benefits of employer branding

Several studies looked at the benefits and the advantages of employer branding that could be achieved by organizations as they become "an employer of choice”. First, creating and maintaining favourable customer image along with decreased employees' turnover (Lenaghan and Eisner, 2005; Minchington and Thorne, 2007). It's clear that today's companies need to actively cultivate their brand internally and create a culture that resonates with their brand values in order to keep top talent. Second, strengthening the organizational financial performance (Becker and Huselid, 2001). Robust branding practices can increase the stock prices by 36%(Lippincott via LinkedIn). Third, increased shareholders' returns (Shellenbarger, 1998). Employer branding can impact the bottom line as well. Fourth, creation of positive identity and positive reputation (Luthans and Peterson, 2002). 69% would not apply to the job with a company that has a bad reputation, even if they are unemployed (Glassdoor). Fifth, enhanced recruitment, retention and employee engagement (Backhaus et.al., 2004; Barrow et. al., 2005; Edwards, 2010; Love et.al.,2011; Michington et. al., , 2007; Van Mossevelde, 2010). Recruiters who represent a strong employer brand are twice as likely to receive responses from candidates they contact (Careerarc). In an organization with a strong employer brand, the new hires are less likely to leave within the first 6 months and hence are more engaged.

Factors that attract talent

There have been several attempts to explore the reasons behind attracting talent to a given organization as well as the reasons that keep employees engaged within a chosen organization. The researcher identified the following factors from the review of literature as the key factors in attracting employees to an "employer of choice"; employer attractiveness as the degree to which an individual would feel a level of identification within a given organization (Ambler et al., 1996; Moroko and Uncles, 2009), prestigious employer (Ambler et. al., 1996), an employer that can reflect self-image "who I am?" (Aaker, 1997), a good working place (levering, 1996; Woodruffe, 2006), organizational corporate social responsibility practices (Turban and Cable, 2003), organizational image (Belt and Paolilo, 1982; Gatewood, Gown and Lautenschlager, 1993; ; Knox and Freeman, 2006; Martin and Hetrick, 2006; Tom, 1971; Turban and Greening, 1997), dynamic business process, organization cares about the well-being of employees, task variety, clear opportunities for long-term career progression (Terjesen, Vinnicombe and Freeman, 2007), personality fits within a given organization brand (Byrne and Neuman, 1992; Cable and Judge, 1996), positive reputation and profitability (Cable and Turban, 2003; Pretson and O'Bannon, 1997), the type of industry or sector of operation (Burman, Schaefer and Maloney, 2008), work – life balance and compensation benefits (EBI'S branding global research), industrial health and safety programs (Watson, 2010), organizational rewards packages (Bretz, Ash and Dreher, 1989), training and development opportunities as well as global assignment opportunities (Jain, Bhalt, 2015), fulfilling promises and obligations towards employees (Barrow and Mosley, 2007), organizational ability to differentiate itself from competitors (Backhaus et. al., 2004; Erlenkaemper, Hinzdrof, Priemuth and Thaden, 2003), attractiveness and comprehensiveness of the company's website (Sarabdeen, El-Rakhawy and Khan, 2011), the interaction between existing employees and the general public in the form of the word of mouth especially if the existing employees interact regularly with a social group of friends and relatives (Dowling, 2001).

A second view addressed by (Kucherov and Zavyalova, 2012) looked at employer brand attributes from four perspectives; economic factors (such as: high salary, fair rewards and bonus system, and appropriate work schedule), psychological factors (such as: strong supportive corporate culture, favourable relationship among employees, teamwork, objective evaluation of the work itself), functional factors (such as: training, career growth, career development and utilization of employees' knowledge and skills), and organizational factors (such as: market leadership, scope of international operations, products brand reputation, management style and reputation of top- management).

A third view addressed by, Mckinsey &Company (2001) who identified four grouping of benefits that help in attracting and retaining the right calibres. In this respect, current and potential employees are attracted based on the benefits that they receive from the employer. There four grouping of benefits are; emotional benefits (describe soft employment offering like: culture, empowerment and teamwork), rational benefits (address employment elements as: working conditions, career path, career development potentials and training offerings), tangible associations (products, services and organizational success) and intangible associations (organizational roots, organizational vision, mission and values). In their exploratory research (Chhabra and Sharma, 2014) identified compensation, career prospects, job profile, brand name, employee empowerment, corporate culture, supportive workmates, job security, recognition, and training as the core dimensions of employer branding. A fifth view looked at five different employer branding. The first value is economic value is likely to target current employees than potential applicants and includes; good salary, fair holidays, appropriate retirement packages (Berthon et.al., 2005). The second value is the development value such as good training opportunities, empowering and motivating environment, and a good supportive culture (Judge, Bono, Locke , 2000) as well as opportunities for promotion and development (Schnake, Williams and Fredenberger, 2007). Third is the social value that encompasses team spirit, friendly relationships, and respectable environment (Saari and Judge, 2004). The fourth value is the diversity value which refers to the interesting aspects of the job (Berthon et. al., 2005) which includes; challenging job tasks (Backhaus et. al., 2004; Towers Perrin, 2005) and task variety (Backhaus et. al., 2004). The fifth value is the reputation value (Berthon et. al., 2005) and includes company's reputation, and brand name products (Cable and Turban, 2001).

Employee engagement

Despite the apparent importance of engagement, relatively little academic research has been conducted in this area. Most of the references relate to work done by survey houses and consultancies. For example Hewitt, Bacon and Woodrow have defined engagement as ‘the measure of an employee's emotional and intellectual commitment to their organisation and its success' and believe it to be an outcome measure, as it describes how employees behave as a result of their interactions with the organisation. In addition, engagement is seen as going beyond job satisfaction, referring to an employee's personal state of involvement, contribution, and ownership.

One study (Harter et al., 2002) found that both employee satisfaction and engagement have a direct relationship to business outcomes. Their research involved 36 organisations, from a variety of public and private sector areas, and sought to examine the relationship between employee satisfaction, engagement and business unit outcomes. These included customer satisfaction, productivity, profit, employee turnover, and workplace accidents. Harter et al. (2002) defined engagement as referring to an individual's involvement and satisfaction with, as well as enthusiasm for, their work.

(Employee engagement and the effects of employer branding) – either put this under the previous heading or a new heading. We have to end the literature review stating this linkage

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