T h e J o ur n a l of B r a n d M a n a g e m e n t V o l u m e 4 N u m be r 3

Th e employer brand

Tim Ambl er* and Si mon Barrow

* Address: London Business School, Regents Park, London NW1 4SA; UK;
Tel: +44 1 71262 5050; Fax: +44 1 7 1 724 7875; TAmbler @ lbs. lon ac. uk http://www. lbs.lon. ac. uk
Received (in revised form): 30th October, 1 996

Tim A mbler is Grand Metropolitan Senior Fellow ported towards bringing these separate disci­
at the London Business School. plines of human resources (HR) and brand
Simon Barrow is Chairman of the manage­ marketing into a single conceptual frame­
ment communica tion consulta n ts, People in work. On the one side, the employer can be
Business. seen as a brand with which the employee
develops a closer relationship. Employee, and
thus corporate, performance will be influ­
ABSTRACT enced by awareness, positive attitudes toward
Th is paper tests the app lication oj b ra n d man­ the 'brand' , loyalty and trust that the 'brand'
agement techniques to h uman resource manage­ is there for the employee.
ment (HR). The con text is set by defining the Marketing, reciprocally, is moving to an
'Employer Brand' concept and reviewing current increasing recognition that there should be
HR concerns. Pilot q u a litative research is re­ greater p e ople o r ientation and less exclu­
ported with top executives oj 2 7 UK companies, sive focus on short-term transactional eco­
who were asked to reflect on their HR practices nomi c s . I t is easier, cheaper and more
and the relevance oj branding. profitable to keep existing customers than
Th is explora tory research indica tes tha t mar­ recruit new ones . ! Marketing essentially has
keting can indeed be applied to the emp loyment the function of achieving corporate obj ec­
situa tion. Bringing these Ju nctiona lly sep a ra te tives, typically profit, through meeting the
roles closer together wou ld bring m u tu a l benefit customers ' own obj e c tive s . Substituting
and lea d to comp a ra b le peiformance m eas u res, ' employe e s ' for ' customers' is p e rhaps a
eg, trust a n d commitmen t. Strong corpora te eq­ small step but not one, as will be seen, cur­
Top:
uity with the bra nd's customers can improve the rently recognised by British industry.
Tim Ambler
return on HR, while a t the same time improved The two goals should b e mutually rein­
Above:
HR ca n imp rove the ret u rn on b ra n d eq u i ty forcing: c ontinuing good relationships be­
Simon Barrow
from external customers. Formal, larger scale re­ twe en the c omp any and its customers
search would be required to substa n tiate the reci­ necessarily involves the employees.
proca l benifi ts from a closer a lign m e n t oj HR Following a discussion of relevant mar�t­
and marketing practices . ing concepts , the 'Employer Brand' (EB) can
be defined. Some current HR concerns are" "
noted which the EB concept might assist be­
INTRODUCTION fore reporting the findings of qualitative re­
Annual rep orts frequently extol p e ople as search interviews with top executives of 27
the comp any's most imp ortant res ource, UK companies, who were asked to reflect on
and/or its brands as its greatest assets . Nur­ their HR practices. While it is not currently The Journal of Brand
Management. Vol. ..j. N o . 3

ture both of these, and the bottom line part of their HR thinking, most respondents 1 IJ96. pp 1 85-206.
© Henry Stt'wart Publications.

should take care of itself. The research is re- found the EB concept helpful and relevant . 1 3 50-23 1 X

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Figure 1 Link
between quality of
employees and
( Best people \
quality of
product/service

Best appl icants Best shops

Best word
of mouth
J
In the words of one leading retailer among satisfaction. The importance of supplier and
the respondents, ' if we have the best shops, or customer relationships increases as a func­
with the best people, then we have the best tion of profit margins and the number of
word of mouth and receive the best applica­ customers . A myriad of buyers in a low
tions and then we will have the best shops' . margin business such as a supermarket
Figure 1 , captures the virtuous circle we are would not make for partnership in the sense
seeking. that McKinsey has with its clients . The EB
The paper c oncludes with prop osals for concept has most application in high val­
further research to substantiate the benefits, ued-added, service businesses: the higher
and identify the disadvantages , from a closer the salaries and the fewer the number of
integration of marketing and HR thinking employees, the more each employee rela­
and practices . I t is expected that there will tionship with the employer matters.
be considerable variation in the optimal mix Relationship marketing marks a shift, in
between industries and companies. The re­ principle, away from exclusive short-term
search needs to show not j ust the general economic concern with immediate transac­
picture but how c ompanies can select the tions toward long-term building of brand
mix of HR and brand disciplines most ap­ equity which Ambler4 has expressed in rela­
propriate to their circumstances. tional terms . In practice, there is constant
tension between short-term and long-term
considerations . Feldwick s has questioned
DEFI N I NG THE E M P LOYER B RAND whether the brand equity concept is needed
Berry defined relationship marketing as ' at­ at all. He is right that the literature is con­
tracting, maintaining and - in multi-ser­ fused. He is also right that the value of an
vice organisations - enhancing customer asset should be distinguished from the asset
relationships' . Kotler2 shifted from his tradi­ itself. Thus if, for the moment, a neutral
tional microeconomic orientation to seeing term, 'XXX' is used, for the intangible asset
the marketplace as a 'network of value-laden which good marketing creates, the financial
relationships' . valuation of XXX is not the same as XXX.
Kotler and Armstrong3 see relationship Nor is any other set of measures of XXX
marketing as reflecting the goal to deliver the same as XXX.
long-term value to customers, and the key In Feldwick's analysis, marketing perfor­
measure of succ ess as long-term customer mance needs to be measured by a combi-

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nation of: current performance, diagnosis of consumer buys a holistic package of bene­
current trends, the brand's chances of future fits, including the ec onomic and psycho­
profits and, perhaps, a valuation of the brand's logical - notably satisfaction.
current worth. In the accounting model, that Gardner and Levy, l O as well as King, note
translates into the current performance and that a brand has a 'personality ' from the
the state of XXX, or perhaps the change in consumer's point of view. This is echoed by
XXX since the start of the period. In all the Kosnik's 1 1 emphasis on the trustworthiness
confusion, there is a loose, but not consen­ of brands. His ' CRUD ' test assesses the ex­
sual, drift towards 'brand equity' being the tent to which brands are Credible, Unique,
least bad label for xxx . The 1 99 1 , Market­ Reliable and Durable. The brand-as-person
ing Science Institute working paper6 is, to concept is essential to understanding the re­
some extent, an imprimatur. While shared lationship between employers and their staff.
language might make marketing a little easier, In the late 1 980s, employees ceased to see
progress requires challenge to accepted think­ IBM as trustworthy. 1 2 The p ersonality of
ing. The implicit question is whether 'equity' IBM had become self-centred and stodgy.
adds anything to 'brand'. The 'Employer Brand' can be defined as
The thinking behind branding is far from ' the package of functional, economic and
new. San Bernardino of Siena,7 the medieval psychological benefits provided by employ­
theologian, was among those who discussed ment, and identified with the employing
markets, marketing and fair pricing. He company' . The ongoing companyl em­
summarised c onsumer benefits from the ployee relationship provides a series of ex­
goods/services purchased as virtuositas (func­ changes of mutual benefit, and is an integral
tion) , raritas (scarcity or market price) and part of the c ompany's total business net­
complacibilitas (psychological benefits) . work.
These three basic properties are unchanged The benefits the EB offers employees par­
today. Aaker8 expresses the value of branding allel those that a conventional (product)
to the customer as interpreting/processing of brand offers to consumers:
information, confidence in the purchase de­
cision and use satisfaction. developmental and/ or useful activities
The functional benefit - virtuositas - of (functional) ;
a spade is not the quality of the spade, but material or monetary rewards (eco­
what the spade will do for us, eg, help us dig nomic) ;
better. The economic benefit - raritas - is feelings such as belonging, direction and
not just the price of a product but how good purpose (psychological) .
a deal it represents. Finally, the psychological
benefit - complacibilitas - is not just image The EB also has a personality, and may be
but how much it enhances our feeling of positioned in much the same way as a prod­
well being. A diamond ring may do more uct brand. Accordingly, traditional market­
for the feelings of both the purchaser and the ing techniques, particularly research, should
recipient than can be measured by economic be, mutatis mutandis, applicable.
or functional benefits or any 'image' . Where the c ompany brand and the
The distinction b e tween brand and c o nsumer b rand are the same brand (eg,
product was summarised by King: 9 ' a prod­ Shell) , the EB is also the same. Its person­
uct is something that is made in a factory; a ality vis-a-vis the consumer should be con­
b rand is something that is bought by a cus­ sistent with its personality as seen by other
tomer' . I n other words , the product com­ parts of its business network, eg, its em­
prises the functional b enefits and the ploye e s , if it is to be trus t e d . If an em-

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p l oyer h a s many c o ns u m e r brands a n d DOES THE E M PLOYER B RAND

d o e s n o t m a r k e t a c o nsumer b rand under C O N C E PT ADD ANYT H I NG?
the c o mp any name, eg, Unilever, then the There are three main groups of c o ncepts
E B b e c om e s , in this p er sp e c tive , s i mp ly which are similar to the EB :
another brand being marketed to a distinct
s e gm e n t , namely, the employe e s . As fo r corporate culture and identity;
any other brand, 1 3 the value of the EB de­ internal marketing;
p ends on t h e i mp o rt a n c e ' cu s t o m e rs ' (in corporate reputation.
this case employe es) assign to b e nefits the
c o mpany is able to deliver and its differen­ After reviewing these in turn it will be
tiation. shown why the EB concept adds value.
The question can now b e addressed as to
whether a brand, or the EB, needs the addi­ Culture
tion of ' e quity' when discussing it as a c or­ Olins 1 4 has also suggested that HR tech­
porate asset. niques increasingly resemble those of tradi­
C onsider a new brand: NB. At the time tional marketing and that b o th these
it is l a u n c h e d i t has no XXX (as a b ove , p romoti onal activities concern the identity
the intangible asset c reated by good b rand of the corporati o n . It might therefo re b e
marketing) in the sense that any measure­ s ensible to bring them together. While
m e n t , financial o r o t h e rwise, o f XXX is Olins is concerned with corporate identity,
zero : no awareness, no loyalty, no p e netra­ such visual imagery should represent the un­
t i o n , no market s hare e t c . T h re e ye ars derlying reality of the organisational culture.
later, suppose NB is a great success. NB is The o rganisation's ' culture ' may be de­
e x a c tly t h e same a n d its marke t e r s dare fined 1 5 as the values that support the organi­
n o t change i t . NB has now a c quired sig­ s ational purpose and strategy or corporate
nifi c a n t marke t s hare, a p remium p r i c e , identity. Indeed, Mills 1 6 suggests that the
high awareness a n d l oyalty a n d positive at­ collapse of IBM in the 1 980s and early 1 990s
titu d e s . XXX, i n o t h e r words , h a s was due to two failures of c o mmitment (to
c h a n g e d b u t NB h a s n o t . I t follows t h a t its customers and its employees) . By damag­
s o m e l a b e l w i l l b e n e e d e d t o distinguish ing the loyalty of employees, they damaged
the brand asset fro m the b rand itself: ' e q­ customer satisfaction. Using M c Kinsey re­
uity' will do nicely. search on mid-size, high growth firms, Clif­
EB e quity is therefore the intangible asset ford argues that the active management of
in the minds o f existing and p otential em­ culture is a primary driver of success. 1 7
ployees that has been built up by good mar­ An improvement in employee motivation
keting and HR p ractice s . It can b e s h o uld lead to improved employee p erfor­
measure d , j us t a s any other brand equity mance which should, in turn , lead to im­
can, and valued. The sale of a c ompany in­ p roved customer relatio nships and thus
volves the transfer of employee brand equity strengthened brand e quity which should
which may b e raised o r diminished by that have an impact on motivation, completing a
sale similarly to the consequences of the sale virtuous circle. Companies with strong cus­
of a product brand. tomer relationships and b rand equity tend
B e fo re c o nsidering s o m e c u r re n t H R t o be characterised b o th by p o sitive em­
c o n c e r n s , c o n c epts similar t o EB are re­ ployee relationships and superior long-term
viewed t o establish whether EB adds any­ p e rforman c e . 1 8 The imp ortance o f culture
thing or whether existing ideas are merely is very clear; the issue is h ow it c a n b e
being re-Iabelled. proactively managed.

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Figure 2
Internal marketing done BY Classification of
internal marketing
Department Whole organisation

Internal marketing done TO

Department Type I Type II

Whole o rganisation Type III Type IV

Internal Marketing ganisation) . The marketer is the internal

The literature on 'internal marketing' does p rotagonist of the end customer: 'to effec­
not make the direct brand/employee man­ tively serve as the advo cate for the con­
agement comparison. Internal marketing sumer at various levels of the hierarchy and
(1M) is defined as ' marketing to employees a c ross functions , the marketing manager
of an organisation to ensure that they are ef­ must initiate, develop, nurture and sustain a
fectively carrying out desired programs and network of relationships with multiple con­
policies' in the American Marketing Associ­ stituencies within the firm' (p. 356) .
ation's dictionary. S ome will rej ec t this Foreman and Money distil typ e IV 1 M
somewhat manipulative understanding of into thre e factors : employee development,
marketing and employee relationship s . rewards and a vision in which employe es
Kotler defines 1M a s 'the task o f successfully can believe. They have difficulty, however,
hiring, training, and motivating able em­ in distinguishing 1M from good HR prac­
ployees to serve the customer well ' ; still tices partly because the extent to which
somewhat uni-directional. 1 9 employees should be truly involved in deci­
1M has been widely noted, mostly in the sion-making has yet to be formalised and
context of services marketing, but not seri­ will vary from organisation to organisation.
ously researched. 2 o Foreman and Money 2 1 The three types of internal marketing ben­
classify 1M into a 2x2 matrix based on who e fi ts they extracted were, for comparison,
does the 1M and to whom it is done: the employee development (function) , rewards
entire organisation or a specific department (money and/or economic benefits) and vi­
(see Figure 2) . sion and/ or something to believe in (psy­
Type IV 1M (the whole organisation ap­ chological benefits) .
plying 1M to itself) is the variant closest to
the theme of this paper. I t is also furthest Corporate reputati on
from the populist view of 1M, being merely D owling2 4 includes a number of employer
the means by which the marketing depart­ aspects in his work on developing the cor­
ment persuades the rest of the organisation porate brand. His framework of alternative
to do what it wants . Gronroos 22 sees 1M as positioning themes and the factors affecting
type IV. Every individual (employee) should employees' perceptions of corporate image
be treated as a customer and every customer and reputation are shown in Figures 3 and 4.
as a member of the company. The c entral box in Figure 4, labelled 'Em­
Hutt 23 applies relationship marketing to ployees' images and reputation of the c om­
1M in the Type III sense (the marketing de­ pany ' , represents an intangible asset for the
p artment applying it to the rest of the or- company which needs to be nurtured if

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The e m p l oyer brand

Figure 3 Organisational Attributes Price

Alternative
• SIze bargain
positioning themes
• technology leadership • value (best price/performance)
• innovation prestige (high price/high quality)
• people (best employees)
Geographic
• flexibility (adaptable to customer requests)
• regional versus global scale
Stakeholder benefits
Competitors
• rational appeals (based on organisational
market leadership (biggest market share)
attributes
•

• psychological appeals (a consequence of • challenger (firms which aspire to become

the market leader)
being associated with the organisation)
follower (forms which imitate the strategies
environment-oriented
•
•

of leaders of challengers)
• community-orientated
• niche marketer (firms which serve parts of
Customer/stakeholder group
the market where they avoid clashes with
• heavy, medium, light user the major firms)
• particular industry sectors • exclusive club (the top 3, the top 6, bulge
• particular sized customers bracket etc)

U se/ application

• full or unrestricted range of

products/ services
• level of relationship/ commitment to
customer
Source: D owling ( 1 994)

performance is to be maximised. This is the these from other corporate actIvIties. EB

EB equity in the minds of its employees , rec ognises the similarities between HR and
j ust as the awareness of, attitudes a n d be­ regular (product) brand marketing thus per­
haviours towards a product brand such as mitting, in principle, their functional skills
Shell is the brand equity of Shell. to be used in each others' areas.
Trust, for example, has been singled out
What does the E B concept add? as a key dynamic for firms in their relation­
All these approaches share recognition of the ships with employe e s , 25 and is also the
importance of the intangible asset made up principal construct in relationship market­
of the relationships between the corporation ing. 2 6 Cruise O 'Brien 2 7 proposes that trust
and its employees, between employers and is ' sustained by reputatio n . Reputation is
the identity they present to the world. developed on the basis of the observation
Clearly they have much in c ommon. The and assessment of consistent behaviour over
EB concept uniquely synthesises them into a time . . . . Reputation has thre e important
single term which can be actively managed c omp onents in the c ontext of the firm -
(as can 1M) and measured as EB equity (a c o mp etence, c onsistency and integrity ' .
development of 1M) . Culture, 1M and repu­ Figure 5 reproduces her analysis o f trust
tation overlap but essentially dijJerentiate into cognitive and affective components .

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mmb bl el er r & B a r r o w

Figure 4 Factors
CEO Leadershi :--1 Professional values I affecting
employees '
, perception of
Organisational
corporate image
Culture
and reputation
Competitors'
Formal activities

./
company
policies
Publicity

,
Employees' perceptions of customen
Advertising, product! and other external groups' reputation
service quality and brands of the company

Source: Dowling (1994)

These same measures c o uld be u s e d SO) .28 Thus awareness is part of the legiti­
equally to a s s e s s the external marketing mate measurement of brand equity even for
p erformance and the EB. Similar analysis employees.
would b e required for the other key c o n ­ E mployers do n o t p rovide employe e
structs of brand equity: awareness, a n d atti­ b enefits altruistically any more than they
tudes such as c ommitment and b ehaviour. provide p roducts t o cus tomers p u rely for
Brand equity c overs both existing employ­ customer satisfa c ti o n . B o th are means to
ees and those who the employer would like achieve their own ends, typi cally share­
to attract. While one would assume that all holder gain . There is growing recognition
existing employees at least recognise their that these ends are best served by taking a
employer's name, the word has two dimen­ long-term view of customer relationships
sions : breadth (the proportion of the p opu­ (relationship marketing) and, it is sug­
lation having any recognition of the name) gested, of employee relationships. The costs
and dep th (the ease with which it doe s of recruiting the best p e ople, training and

Cognitive (rational) Affective (emotional) Figure 5

Assessing trust in
Assessment of Faith in
an organisation
reliability care
competence concern
fairness openness
consistency support

Source: Cruise O 'Brien (1994)

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The e m p l oyer brand

Figure 6 UK France Germany

Comparative
Proportion of total
qualifications in
population qualified
1 994
to level:

NVQ-2 15 35 8
NVQ-3 11 14 47

Proportion off new

entrants qualified to
level:

NVQ-2 17 37 5
NVQ-3 13 15 62

Source: Skills Audit, 1 996, figs A8 . 1 6, A8 . 1 7

developing them can o nly b e re c overed if skills and educational levels are needed, as
they stay long enough to make a return o n well as greater c ommitment, flexibility and
that investment. stability. These concerns will b e examine d
in greater detail below.

SOM E C U R RENT H R CONCERNS Low s ki l l and educati on level in the

O rganisational learning, teamwork and workforce
sp eed of resp onse are p e ople factors that Figure 6 shows that 26 per cent of the UK's
will, at least in part, determine an organisa­ 1 994 population was qualified to NVQ-2 or
tion's success. 'Without exception, the dom­ 3 compared with 49 per cent and 5 5 per
inance and c o herence of culture [is] . . . an cent for France and Germany respectively.
essential quality of the excellent compa­ NVQ-2 and -3 are e quivalent to at least 5
nies .' 2 9 Pfeffer c oncurs : ' as other sources of G CSEs at Grade C and 1 . 5 A-levels respec­
c ompetitive success have b e come less im­ tively. The position is similar for new en­
portant, what remains as a crucial, differen­ trants though the c ontinually nsmg
tiating factor is the organisatio n , its p roportion of A-level passes, now 86 per
employees and how they work ' . 3 0 cent, indicates that this gap will close. The
Just as marketing is now widely seen as UK target for 2000 is to reach Germany's
being too important to be left to marketers, 1 994 NVQ-3 . To catch up, the UK will re­
so HR is , also, too important to b e left to quire radical improvement in the education
the HR function alone - line management of those entering the workforce, combined
must also take direct resp onsibility. In this with much better training for those already
paper H R will referred to in this wider, in work. This, in turn, is a long-term process
non-departmental, sense. which requires commitment and motivation
Recent downsizing headlines may have by both employers and employees. 3 1
exagge rated the issue which is, by its na­
ture cyclical. Nevertheless automation has Low employee comm itment
brought a c o n tinuing demand for work­ Today's best employees , like today 's cus­
forces which are smaller but better. Higher tomers, know they are in demand. They re-

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 Ambler & B a rrow

Figure 7
Employee
commitment in
different industry
sectors

Entrenched o Average o Shallow � Converti ble

Source: Jamie on and Richards( 1 996)

quire respect as indivividuals, understanding the long and short term resp ectively.
III

of their own career goals , training and the ' Shallow' means that they are likely to
mentoring to achieve them. More is re­ change but, unlike ' Convertible' , not yet on
quired from employees in terms of responsi­ the point of so doing.
bility, long hours of work and good Clearly the need for commitment varies
inter-personal as well as technical skills. by typ e of industry and role within the
However, employee commitment is variable company. Jamieson and Richards 33 cite the
(see Figure 7) . case of one maj o r bank in which customer
The expressions 'Entrenched' , 'Average ' , and employee commitment were measured
' Shallow' and ' C onvertible' are from across the c ompany's regional branches .
Hofmeyr who divided brand users into Figure 8 shows markedly higher customer
these four segments . 32 The first two are se­ than employee c o mitent levels . The au­
cure and unlikely to change brand allegiance thors believed this case to be representative.

Figure 8
Commitment levels
of customers vs.
E mD llOVEiest 25% 36%
employees in a
representative
case study

Customers 30% 29%

E ntre n c h ed o Ave rage o Shal low m Conve rt i b l e

Source: Jamieson and R i chards ( 1 996)

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 The e m p l oyer brand

Figure 9
27% 26%
Employee
commitment by job
type
Tec h n ical/Profess i o n 36% 23%

36% 23%

41 % 22%

III E nt re n ch ed o Ave rage o S h a l low m Conve rtible

Source: Jamieson and Richards 1 996)

As might be expected, commitment levels METHODOLOGY

rise with seniority, as shown in Figure 9. Low This exploratory research took the form of
commitment among customer-contact staff semi-structured depth interviews with re­
has clear implications for customer service spondents from 27 companies in a variety of
levels, 3 4 and it is in this area that proactive industry sectors, mostly services. The com­
management of an organisation's EB could panies are listed as Appendix A and include
potentially have the greatest positive impact. consultants, financial services, retail, com­
munications, alcoholic drinks, pharmaceuti­
HR Summary c als and footwear. The respondents were a
Many UK organisations are faced with the convenience sample of clients and contacts
need to achieve ever higher quality stan­ of People in Business, a London-based man­
dards in their products and/or s e rvi c e s . agement consultancy.
They rely on their employe es to deliver Statistical considerations were not a fac­
these imp rovements , and comp et e with tor in this qualitative study. The obj ectives
each other for the best talent. At the same were to:
time, skills levels are not increasing to the
level of, for example, Germany. Employee ascertain each company's overall ap­
commitment is variable, and may well be proach to these issues;
lower than that of customers . These fac ­ gauge the reaction to the EB as an inte­
tors are unlikely to be o f equal concern to grating (HR with marketing) frame­
all c omp ani e s . High customer- contact, work.
high employe e, value- added busin e s s e s ,
s u c h as consultancy, would be more likely The discussion guide for the interviews is
to be affected by culture and employe e attached as Appendix B and covers:
morale, than those where lab our is little
more than manual dexterity. As developed ( 1 ) the existence of the EB, and its compo­
economies shift inexorably from the pro­ nents;
duction of goods to servi c e s , and greater (2) the importance of the EB to the c om­
valu e-added servi c e s , these concepts are pany, and its influence over HR policy;
seen as becoming more important. (3) positioning of the EB;

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 A mbler & Barrow

(4) measurement of employee relationships; ' We have a lot of turf wars - it is b e ­

(5) the main obstacles to developing the cause b oard members themselves o nly
company's reputation as an employer. work as a team about 20 per cent of their
time - they take care of their own busi­
These headings were used o nly to p rovide ness, not of the company as a whole.'
the structure for the interviewers and were
not read o u t to resp ondents . The inter­ 'We must practise what we preach, other­
viewers were b r iefe d not t o intro d u c e the wise it c ould be dangerous.'
EB p hrase b u t to use, in the blank s p a c e s ,
whatever w a s the closest term already in Language was an issue. The EB is not cur­
that employer's lexicon. In other words, the rently part o f the thinking o f H R and
intro d u c ti o n to the interviews s o u gh t to c ommunications professionals, though they
identity, and then, adopt whatever language were familiar with marke ting language in
the resp ondent already u s e d for this topic. general. Clearly, the introduction o f mar­
I n the event, firms did not seem t o have keting language t o these interviews
their own language for this concept and c o l o u re d the ensuing disc u s si o n . On the
'EB' was quickly adopted. other, there is no rec ognised common lan­
The respondents were mostly at the level guage available today to c over a c o mpany 's
of functional department head, with re­ identity, culture, brand and reputation as an
sponsibilities encompassing human re­ employer.
sourc e s , marketing, and/ o r internal This methodology was designed to be ex­
communication. While largely familiar with ploratory : the researchers were not seeking
marketing c oncepts, resp ondents found to prove the case for the EB concept but to
their application to H R n ovel and some­ test the water of its acceptability. 35
times uncomfortable. Some warmed to the
EB c o nc e p t as they though t about it, and
some did not. FINDINGS
To o m u c h weight has not b e e n p u t o n O nly limited evidence was found o f at­
individual c omments . A s noted above, the tempts to manage the employment experi­
testing o f hyp o th e s e s was not s ought, but ence as a whole. Managing any integrated
rather t o establish the range of resp o n s e s . process, including the EB, is cross-functional
The views o f individual respondents will and therefore p olitically delicate. In order to
not always b e representative of their com­ be managed coherently and holistically the
panies and the c o mpanies may n o t repre­ EB would need to b e c hampioned by a se­
sent U K employers as a w h o l e . F o r nior management figure.
examp l e , t h e s e fo u r statements all c o m e Now to turn to the experience and views
from t h e s a m e c o mp any i n t h e s e rv i c e of the respondents, with an emphasis on al­
sector: lowing respo ndents ' comments to speak for
themselves. Findings are presented under the
'People in the organisation do not believe following headings:
in the company's stated values - they are
j us t an emp ty statement from top man­ The Employer B rand - its significance
agement.' to employers;
Managing and measuring the E mployer
' Our values are the driver of our business, Brand;
everybody follows them and they are em­ O bstacles to developing the Employer
bedded in our people.' Brand;

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 The e m p l oyer brand

The E mployer B rand - its significance ' Co rp o rate culture is a bit like an ele­
to employers. p hant - you know it when you see it.
C ultures are not necessarily terribly capa­
Most respondents seemed to associate the EB ble of definition. People understand them
closely with corporate c ulture, and were not and can talk abo u t them, but it's quite
always clear as to the b ou ndary between the difficult to label them in the way that you
two concepts. The items identified most con­ can put a label on a brand. You c an 't im­
sistently as key c omponents of the EB concept pose c ulture on different brands .'
were awareness and psychological benefits.
Most respondents also rec ognise d the im­ ' Th e EB is s o intertwine d with c ulture
portance of the EB c oncept, although only in that I find it hard to separate them.'
a vague way, with low priority. Other pres­
sures and needs were given higher priority. ' The EB concept reflects the culture . D o
you really want t o distinguish b etwe e n
' We are doing very little (nothing) to pro ­ them?'
mote a n EB within the fi r m . I t is s o m e ­
thing we n e e d t o w o r k o n , b u t I h ave ' O ur EB is p ro bably not that stro n g ; we
more pressing issues.' h ave a high turnover rate, partly b ecause
today our c ulture is not well articulated.'
' Frankly we h ave s o muc h t o d o at the
moment with the merger that we j us t ' Th e E B must b e c o nsistent with the
want to g e t t h e basics right. A n EB c o n ­ c onsumer brand, which is t h e p illar and
c e p t is nice, b u t not essential .' the values of the corporation.'

H owever, many o f the res p o ndents also C o r p o rate p erformance was identifi e d by a
recognised the de-facto implicit existence of number o f respondents as a key p rerequisite
the concept, and the importance and p o ten­ for a strong EB.
tial of the EB if managed well.
' Pe rformance and reputati o n are impor­
' Certainly this branding c oncept exists . I t tant - you must b e successful as a busi­
is a function of t h e benefits w e c a n offer.' ness i n order t o h ave a g o o d EB - you
have to perform.'
' Yo u r questions h ave c e r tainly triggered
s omething, and I think I will work with ' I t is difficult for u s to build o u r EB, b e ­
the idea in the future.' cause we have not h a d good perfo r mance
during a c o uple of years .'
'An EB should be connected to the value
system in the company and could create a External and internal p e rcepti o ns can differ
substantial competitive advantage.' vastly:

C o r p o rate culture and reputation e m e rge ' I ' m n o t s u re whether we h ave a stro n g
over time regardless of whether they are ac­ E B . . . . We are p e rceived as b eing an in­
tively managed , a n d underlie c o rp o rate teresting, dynamic , p rogressive c o rp ora­
identity. C o r p o rate culture and reputatio n tion - external surveys show that 99 p e r
are firmly embedded i n management think­ c e n t o f the p eople t h i n k we a r e g re a t .
ing, and there some resistance to recognising H owever, our internal surveys s h o w that
the EB as a separate and distinct concept. o nly 1 4 per c e nt o f our employee s are

P a g e 1 96
 A m b l e r & B a rrow

happy working here ! ' value' , the culture and lifestyle it offers, and
the sense of j ob satisfaction and security it
Respondents singled out awareness and psy­ provides.
chological benefits as the foremost aspects of
EB in terms of enabling a company to re­ ' People stay because not j ust because
cruit, retain and motivate the best people. they have a very good remuneration
This thinking, however, did not necessarily package, but because the name looks
extend to a recognition that the employ­ good on the Cv.'
ment experience as a whole - including
but going beyond the recruitment experi­ ' People are honoured to be working for
ence - needed to be managed in a coher­ our company, you almost feel invited.'
ent and holistic fashion.
Awareness was identified as a key factor in ' Our employees are not motivated pri­
recruiting the calibre of applicants desired. marily by money, but more by the psy­
This was seen to be closely linked with the chological rewards.'
company's performance, market position,
reputation and product brand(s) . 'We hire from other multinationals for
local staff. When there j ust aren't enough
'There is not that much difference between good people to go around, as is the case
us and the competition in the way we go here at the moment, there is a value to
about our business, but everyone applies to employees above money associated with
us first because of our reputation.' future prospects, lifestyle and - perhaps
most importantly - status.'
'People come to us because they have
heard about us - the CLUB feeling is 'We are perceived to be a safe employer,
great.' we used to be a part of the public sector,
that is why people stay.'
'We wanted to hire 30 graduates and got
2000 applicants ! People are very much
aware of us and find our company very Measuring and manag ing the
attractive to work for.' Employer B rand
Many of the respondents identified the HR
'We have a great name in the UK, but function as the most suitable department for
when we go overseas it is different, no­ managing the EB, provided that it was
body knows who we are.' linked closely to the Chief Executive. In the
words of two respondents, HR would be in
'People j oin our organisation because we a good position to take on this role in their
are number one.' firms because:

In addition to awareness , the psychological 'HR is a part of the senior management

benefits of a strong EB were considered to team in each of the divisions, and it is also
be a key aspect of the concept. This was in a p art of the Executive Committee. We
part, again, linked to elements that derive recognise that we are responsible for
from performance, market position and gen­ coaching line managers .'
eral corporate reputation. Factors identified
included the prestige and standing of a com­ ' We have a very decentralised organisa­
pany, the feel-good factor of its 'name tion where we [HR] support the efforts

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The e m p l oyer brand

of managers. The EB should be created activity, including recruitment, training and

by middle managers and spread by them development, rewards , and performance
throughout the organisation.' management.

Others saw EB management as a cross-func­ 'We make sure that our remuneration,
tional task involving senior management as training etc is among the best in the in­
well as the HR, marketing, and corporate dustry - that is necessary if you want to
communication functions . In many cases, a attract the best people. We also have a
clear view on the locus of, and approach to, personal development plan for each em­
responsibility for EB management had yet to ployee.'
emerge.
'We have monthly reVIews , and we
' To what extent should the EB be led by benchmark.'
the customer end of the business and to
what extent should it be directed by the The second main tool for measuring the HR
top of the organisation?' function appears to be the internal survey.

None of the respondents' companies explic­ 'We are doing internal surveys every two
itly managed the EB as such. H owever, a years, and external surveys too. They
number of the participating companies had both indicate that the company is p er­
similar implicit understanding linked with ceived as a great place to work.'
HR practices and career prospects .
Respondents were frank about approaches
'We have rigorous recruitment to find the to HR and people management which seem
best people, we give them on the j ob to be less than systematic. Internal surveys
training and great opportunities for career were not always followed through.
development - they know that and we
don't advertise it.' 'We don't measure the HR performance
- not yet - but we will, given the
' For our top managers we offer career amount of customer complaints , absen­
prospects and general management expe­ teeism, and high turnover rates.'
rience early. We have a great brand name
as a company.' ' Our internal surveys show that 60 per
cent of employees are not feeling in­
Some recognised that the EB does need to formed, and 40 per cent are dissatisfied
be measured and managed. with their j obs.'

' Is EB worth measuring? It is like asking ' Our slogan is "Be a reputable employer"
- do you love your wife ' . and we try, but the video doesn't match
the audio about the culture and the per­
With H R identified a s the most appropriate ceptions - there 's a gap between the
leader of the cross-functional task of EB messages managers think they are c om­
management, it is not surprising that com­ municating and what employees actually
ments on measurement tended to focus on experience.'
HR activity. Benchmarking and internal
surveys were the most commonly cited ways Some respondents did think in terms of a
to measure the various components of HR number of standard marketing techniques,

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 A m b l e r & B a rrow

including the need for segmentation, the use 'We know that our communication must
of pricing (rewards) , and the importance of improve, but people are very sceptical -
professional communications. and not necessarily just the high achievers.'

Segmentation ' Our management all go to fancy presen­

' Our group comprises three quite differ­ tations courses - but they should instead
ent businesses, and each requires a differ­ learn how to communicate with their
ent sort of person.' people - internally.'

' Our group has a number of strongly Relationship marketing

branded businesses in their own right, al­ Some of the respondents saw the relation­
though within the group we would like ship with employees in terms similar to
to tie them into our group ideals.' those of relationship marketing, eg, trust,
commitment, shared values, and longevity
'We segment the market through our in­ of relationships.
ternal communication vehicles (eg, the
manager magazine) , which seek to de­ ' One of the lessons we have learned is
velop the same themes but in different that you must be up-front with people . . .
contexts , and targeted at specific internal people are not fools.'
groups.'
' I guess the Employer Branding concept
Pricing/rewards falls under the " style and shared values"
C o mp e nsation packages and systems have aspect of our strategy. It seems to fit into
long been the bedrock of HR activity but the themes of integrity, c ontrol ethos,
they can also be seen as analogous to pric­ teamwork/ collaboration and identifica­
ing products in the marketplace. The more tion with the customer.'
attractive the product, in functional and
psychological terms , the higher the e c o ­ ' Our business involves very few lateral
nomic price that c a n still provide user satis­ hires. We recruit our people from school
faction. In the employment context, firms - it's cradle to the grave.'
are well aware that higher functi onal and
psychological benefits permit greater flexi­ On the other hand, the relationship approach
bility in compensation packages. to the EB concept is far from universal.

'A change in the reward structure could ' I n our industry, people are only as good
be a factor in building a successful EB.' as their last deal.'

' People stay because they enj oy the per­ Obstacles to developing the Employer
sonal recognition - and they rec eive B rand
good pay.' Most of the respondents agreed that the con­
cept of EB was interesting, although some
The importance of professional held a negative perception of marketing in
communications general, as being 'artificial and manipulative' .
Internal newsletters and briefings are today
commonplace. Employees, both current and 'EB i s really just another gimmick, right?
prospective, are also key targets for any ex­ In my view these gimmicks are j ust for
ternal corporate advertising. incompetent managers.'

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The e m p l oyer brand

As noted above, a number of respondents' Weak HR infrastructure

companies were too short of time and/or Equally, weaknesses in the existing HR in­
resources to devote much attention to devel­ frastructure and c ommunication channels
oping their EBs . The awareness that, not were perceived as significant obstacles, and
unlike consumer brands , an EB would take a numb er of respondents voiced a reluc­
years of investment to build up, and yet still tance to ' build a house on poor founda­
be vulnerable to quick and crippling damage tions ' .
through some 'bad incident ' , induced some
wanness. ' Our reward and bonus structure i s in­
Some had deliberately avoided this path. consistent - some employees have re­
wards linked to targets and obj ectives, but
'We are not interested in building an EB; others do not.'
we have 1 00 per cent staff turnover p.a. It
is only c ollege kids that want to earn ' I feel we have a dodgy recruitment prac­
money to fund their studies.' tice - we should tighten our recruitment
policy because we are not attracting good
The main obstacles to the EB concept were quality candidates .'
seen as the lack of top level support and un­
derstanding, internal politics and differences 'An internal survey showed that only 60
of perspective (mental models) and weak de­ per cent of staff knew about the strategy
velopment of the HR infrastructure. ' blue book ' , some thing that divisional
managers were supposed to brief all their
Lack of top-level support and empathy people about.'
Due to its long-term nature, the EB ap­
proach requires top management commit­ These obstacles are substantial. Many com­
ment to the concept, and especially empathy peting claims are made for top management
between top management, marketing and attention and cross-functional alignment.
HR mind-sets.

' The biggest obstacle for a successful EB FU RTH ER R ESEARCH

is the lack of funding and buy-in from I nternal marketing, of which the EB con­
top-management.' cept is a development, has not been widely
researched. The fundamental empirical
' Senior management does not address the question is whether firms using brand and
issues that need action - they pick the marketing disciplines in their HR functions
flavour of the month. During more than achieve better performance. Conversely, do
two years we have had the same issues firms employing best HR practice in their
come up as a c omplaint in our internal (relationship) marketing programmes do
surveys - but nothing is done.' better?
Clarification is needed of the extent to
'We are weak in converting our vision to which corp orate culture can be and is
action, there 's too much p olitics in the being actively managed in companies . The
organisation.' findings here indicate that its exis tence is
rec ognised but the tools to manage it do
' T here is a gap between our Executive not exist. Issuing policy statements on val­
Managers and the managers that are sup­ ues and culture has little impact: what pre­
posed to execute what we are suggesting.' o c cupies top management, what they do

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 A m b l e r & B a r row

and what they ask about, is very influen­ ing as more relevant to situations of high
tial. profit margins and fewer customers , eg,
Whether EB, internal marketing, corpo­ consulting companies and investment banks .
rate reputation and culture are different The levels of sophistication of firms
things, or different labels for the same thing, within the same general area of the spec­
is less important than the c ollective c ontri­ trum differ substantially. This exploratory
bution they can make to the achievement of research indicates that industry leaders, ie
corporate goals . Clearly the concepts over­ those with the highest corporate brand eq­
lap. What then matters , assuming they do uity, are more conscious of their company
make a difference, is what management can name or brand, both explicitly in the exter­
do to enhance them. nal environment and implicitly in internal
The following research is needed: settings . Firms that follow an implicit EB
model seem to have a higher retention rate,
What, if any, active EB equity building particularly among their more highly skilled
programmes (under whatever name) people. In addition, these companies are
exist; able to attract the best candidates more eas­
To what extent the programmes are for­ ily in the first place, as reflected in the atti­
mal (written down and agreed by the tudes and career choices of p o tential and
Board) or informal; existing employees.
H ow they correlate with subsequent Overall, most respondents agreed that the
performance; EB concept is valuable in that it could bring
H ow such programmes comp are with the discipline and theory of marketing into
their product marketing programmes; the HR function, particularly:
The involvement, if any, of HR man­
agers in product marketing and the con­ putting the emphasis on getting the
sequences for those companies. product, ie the whole employment ex­
perience, right;
Empirically grounded evidence of s u c c ess consistency of brand experience (video
is more likely to lead to widespread adop­ matching the audio) ;
tion than the conceptual framework so far segmentation and umbrella branding;
establishe d . O n the other hand, the pur­ using pricing/compensation benefits ex­
pose of this paper was simply to test the plicitly to balance functional or psycho­
water. logical benefits;
the importance of professional commu­
nications;
CONCLUSIONS the techniques of relationship market­
It would appear that the EB c oncept exists mg.
implicitly within some corporations , how­
ever fuzzily. The underlying trend in re­ This last point is of particular importance. It is
sponses indicated a spectrum of high believed that the principles of relationship mar­
applicability where high skills and develop­ keting could allow marketing and HR activities
ment were crucial, eg, consulting companies to share a common framework: the principles
and investment banks, to lower relevance for of brand marketing can be applied, mutatis mu­
large-scale industrial and manufacturing tandis, to improving internal relationships and
companies where employee individuality is thus corporate performance. Conversely, the
less c onspicuous. This echoes Kotler and principles of HR management can illumine
Armstrong 3 6 who saw relationship market- customer marketing activities. Similarly, the

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The employer brand

measures used to assess relationship marketing enc ed above 3 7 would give grounds to be­
performance (awareness, trust, commitment, lieve that more intensive, active manage­
other attitudes and behaviours) can be used for ment of culture in this way is a s s ociated
HR, and vice versa. with stronger growth.
The Marketing Council was created in
the UK in 1 995 because many leading com­ ' We have been implicitly thinking, n ow
panies believed that marketing principles we have to be explicit to make things
were not widely accepted in British compa­ happen.'
nies. In that context, it would be surprising
indeed if the EB concept was welcomed by
the respondents on first acquaintance. Nev­ Acknowledgment
ertheless , it was found that both interest
and, in some firms, enthusiasm for the ide a . Tim Ambler would like to thank People i n B usi­
Those firms with marketing cultures have ness for sponsoring the fieldwork and for p roviding
little to lose from so implementing the con­ the Employer Brand concept. B oth authors thank
and acknowledge the considerable contribution by
sequences. At the least, their HR and mar­
C h ristian I ngerslev and Andrew Wise m a n , LBS
keting functions will gain better
students, who conducted the fi eldwork and desk
understanding of each other's disciplines . research, also by Souna Kang, of People i n B usi­
Furthermore, the McKinsey study refer- ness , who helpe d with the drafting of this paper.

APPEN DIX A - PARTICIPATING COMPA N I ES

ABB Lazard Bros & Co.

Arthur Andersen & Co. Marks & Spencer
AT Kearney McDonalds
Automobile Association McKinsey & Co.
Bain & Company National Westminster Group
Boston Consulting Group Pizza Hut (UK)
BT Pos t Office Counters
Coutts & Co. Reebok, China
Deutsche Morgan Grenfell Sal omon Brothers
Glaxo Wellcome Threadneedle Asset Management
Guinness Waterstones Booksellers
Henderson Administration WH Smith
ICL Whitbread
ING Barings

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APPEN DIX B - INTERVIEW G U I D E

We would like t o ask your views o n how the H R function manages things like employee
relationships, and your firm's reputation as an employer both internally and externally.

Existence of the Employer Brand

What language do you use internally, if you do, to describe the asset that is the firm's
reputation as an employer?
How would you describe this for people working in the firm?
How would you describe this for candidates?
Who are your main competitors and how would you describe their ?
Do different areas with the organisation have a different ?
How and why do you think they might differ?

Components of the Employer B rand

What do you feel is the basis of people wanting to continue or start working for your
company? Could you rank these from 1 down to 4? Two lists might be appropriate.
If you were to go about building this what are the key elements of the
process?
How does this differ from an organisation's culture?
What do you think are the parallels between this and your sales?
Why do you think that they should be different?
How long do you think it takes to build an effective and conversely
how long to destroy it?
How would you describe awareness of your company and attractiveness?
How would describe the involvement of trust in this ? (See Aaker, 1 995.)
What percentage of employment offers are accepted?
What is your turnover rate?

The i mportance of Employer B rand i n your company

What do you think are the key determinants of an effective staff member? Rank from
1 down to 4.
How would you describe the effect of the _______ for those already in
the job?
Is this
_______ becoming more important than in the past?
Is this
_______ able to increase retention? Why?

Influences on H R pol icy

Which executives in your organisation get involved in setting the human resource
strategy?
How is the budget for the human resources department determined?
How is the amount of funding for recruiting marketing determined?

Positioning of the Employer Brand

Who is your target market for this _______ internally and externally? Rank from 1
down to 4.
How often do these target markets change?

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T h e e m p l oy e r b r a n d

APPENDIX B - I NTERVIEW G U I D E (CONTI N U E D)

What is the target market for your competitor?
Who is better, you or your competitor, at attracting the best candidates?
What is your firm's salary position within the industry and overall? Are these target markets
made explicit?

Measuring employee relations h i ps

How does the organisation measure the performance of its human resources strategy
and the performance of the human resources department?
How do you measure the performance of the department?
Is the perception of your firm as a place to work measured?
What budget do you spend on ? How do you measure the return
on this investment?
How do you measure ?

Factors i m ped i ng the development of the firm's reputation as an employer

What are common obstacles in creating and maintaining this _________

internally and externally? Rank from 1 down to 4 .

Does the firm have a central which transcends cultural boundaries?
How does the differ according to locale?
How does this track social trends?

I nterviewee details
Title:
Approximate age:
Years at company:
Years in human resources/present function:
Reports to:
Size of human resources department:
People hired per year:
Number of employees in company:
Revenues:
Profits:
Position in industry:
Type of company (individual, national, multinational) :
Location:
Proportion of entry level, middle level and senior positions hired for?
What is the proportion of positions hired by role (eg, front office by department
and support stafl) ?
Industry sector:

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 A m b l e r & B a r ro w

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