The first common denominator and probably the strongest is trust
Trust between the employee and the employer is critical to build a sustainable business
Professor Jagdish Sheth, Charles H. Kellstadt Professor of Marketing and Global Business at Goizueta Business School, Emory University, was recently conferred the first Global Management Guru award 2011 by Birla Institute of Management Technology. During his visit to India, Prof. Sheth talks to People Matters about the many parallels between employer branding for employees and product branding for customers
Your contribution to marketing both in terms of areas of consumer behavior and customer relationship has been revolutionary. In your opinion how do these apply to employer branding?
There is a very strong parallel between customers and employees when we look at the way the relationship is built between them and the companies, be it service or product providers or employers.
The first common denominator and probably the strongest is trust. Customers are willing to engage with a company when there is trust. That is especially true in service Industries but applies to many others as well. In all service industries, the customer looks for trust in the employee that delivers the service. We trust the people that represent the organization; we do that with banking, with life insurance, with lawyers, with doctors, accountants etc. The trust that is built between the customer and the person representing the company should have a mirror trust between the employee and the employer to be sustainable over time. For example, during the recession period, many companies broke that trust with their employees and today those companies are suffering the consequences, with their employees becoming transactional with their work. There is a double negative to that - on the one hand, it has led to increased attrition and on the other hand, resulted in increased unhappiness. The parallel is enormous even taking trust alone.
The second one is commitment. The same way that customers have expectations from a service or product providers, employees have expectations from the employer. Companies need to be able to commit to expectations from their employees after recruitment. Employers need to invest in training and education, in culture orientation, in career planning and development, even before the employee asks.
The third parallel refers to the reverse relationship. In marketing we have seen that commitment cannot be one way. What should the customer do to make sure that the service or product providers keep giving best services/products? We have seen customers give in three ways: the first, customers begin to give more business to the same company, what we call the share of wallet increases and customers choose to have less suppliers and concentrate more on business; the second, the customer begins to buy additional products from the company and giving an opportunity for them to cross sell; Thirdly and most importantly, customers provide references and this targeted word-of-mouth can create immense value to the organization. The same is true for the employees, they also need to give back to the employers to maintain the relationship: firstly, they need to contribute more as they grow with the organizations, secondly, they need to engage in many more activities other than the ones they were hired for, sometimes from being a specialist to being generalists, and finally, they should be the best ambassadors for their companies for future employees.
You developed the principle of the ‘Rule of 3’ for competitive advantage and survival of organizations and you then applied the same for competitiveness of countries too. Does the ‘Rule of 3’ also apply to employers?
The ‘Rule of 3’ offers a universal model. In industry after industry, the three strongest companies usually control 70 to 90% of the market. The three “giants” will be surrounded by “specialists” that will own niche areas. It is tough to survive as a mid-sized player. The same happens with attracting and retaining talent. If you look at the concentration of employees, most likely a large number of employees work for the largest three companies, then the number drops considerably. There is also a trend that people who like to work with a niche player as the type of benefits and access to specialized work is higher. So when it comes to employer branding again, either you have the scale to offer opportunities across the world as the bigger players do, or you have the niche specialization to attract talent that wants to work in that specialized environment. Companies left in the middle will struggle to attract and retain people for their businesses.
What are the trends you are seeing as the world emerges in a new phase of growth?
The first trend is that more and more power is shifting towards emerging markets – especially large countries like Turkey, Brazil, Malaysia. The business challenges faced in these economies are very different from those faced in the western countries. Concepts learned from these economies are not necessarily applicable to emerging markets. Here the needs are too heterogeneous and require special consideration. Some aspects are useful, especially the processes, infrastructure, technology. What is not useful is the mindset. For example, in the west there is still a misconception of China and India offering low quality or being low cost economies without resources or talent; they have not understood the power of these economies to innovate and many proven examples are there in pharma, automobile, etc. Future lies with emerging markets and developing countries. Think local act local is the new motto.
The second trend is the new look of leadership. Here the best combination is a mix of emerging and western with equal status. In science this is already happening. In management it is still not there.