Regardless of the unpredictable business scenario in an uncertain economy, the war for talent continues. The key to a successful business is the ability to attract and retain top performers. Organizations try to distinguish themselves from the competition by identifying their strengths and projecting values to ensure that the company stays ahead of the rest and becomes a best place to work at all times.
With most organizations offering almost the same value propositions to employees and the intensified competition in the labour market to attract the right talent, companies are forced to think of strategies to get a distinct advantage in attracting and retaining employees.
At present, the Indian economy is going through a rough patch. Hence, a company’s brand image plays a key role in influencing a person’s decision to join a company. According to Randstad’ study, public perception of a company brand is even more important now because potential employees have experienced salary freezes, temporary lay-offs and even long periods of unemployment that makes it difficult to trust a company.
Undoubtedly, “Employer branding” is one of the most critical concepts of modern management that ensures a fine blending of the science of marketing with the art of enlightened human relations management. Employer branding is a process of placing an image of being a “great place to work” in the minds of the targeted employee pool and the development and communication of an organization’s culture as an employer in the market place.
It conveys an organization’s value proposition – the totality of its culture, systems, attitude and employee relations along with encouraging employees to embrace and share goals for success, productivity and satisfaction both on personal and professional levels. Organizations have been focusing on product brand for a long time but employer brand is a relatively new concept.
With the help of product branding, organizations try to develop a lasting image in the consumer’s mind so that they automatically start to associate quality with any product or service offered by the brand’s owner. However, employer branding is designed to create an image that makes employees want to work for a company because it is a well-managed firm where employees are motivated, continually learning and engaged with the organization.
Currently, Indian organizations have also started recognizing the importance of employer brand and are working seriously to develop a convincing proposition not only for potential employee pools but also for the existing employees. The growing focus can be gauged by employers’ attempt to participate in “Great Place To work” study and communicate its brand image to the target audience.
Organizations have realized that being a ‘great place to work’ helps them to create an image among exiting employees that the organization lives up to the commitment of employer branding, leading in employer brand consistency and also communicates to prospective employees that this organization is the right place for them to realize their dreams and potential. Moreover, the employees of a great place to work will choose not only to join the company and stay with it for a longer period, but will also identify with its vision and values and give it loyalty, commitment and performance.
The success of employer branding for any organization is the understanding of its core existence and what drives an employee’s desire to keep working for that organization. Irrespective of whether an organization has clearly defined it or not, every organization already has an employer brand. The key question in employer branding is whether organizations are clear about the distinctive benefits that encourage people to associate with them, communicate with them and deliver against their promises. By focusing on employer brand, companies can understand the attributes which are likely to attract new recruits to a business, allowing them to adapt their recruitment strategy accordingly.
We have seen that employer branding is an organization’s reputation or image as a desired place to work in the minds of current employees, active and passive candidates, customers and other key stakeholders. It embodies an organization’s values, culture and workplace environment and gives a promise to all stake holders like any potential advertisement. The employer brand is a commitment and promise to employees which assists in the development of a strong organizational identity and constitutes a psychological contract. The psychological contract consists of implicit and explicit promises that have been shaped by the organization in terms of the exchange agreement between employees and the organization. Employer brand plays a key role in shaping promises of employees and creates a tacit psychological contract with the organization.
Unlike “social” contracts, which comprise of broadly based beliefs about the obligations of those within a culture, or the “normative” contract, which is a sharing of beliefs among more than one person about the organization’s commitments, the psychological contract is crafted at the individual level of analysis involving one’s personal beliefs regarding the promises that have been made. These perceived commitments and psychological contract become fundamental understandings about what will happen in the future.
Employees can develop psychological contract at different touch points of employer brand. Generally new recruits create tacit psychological contract during the initial touch point with an organization and perceived promises of employer brand. Organizations have realized that recruitment process is one of the critical touch points where prospective employees experience employer branding initially and slowly create a psychological contract. It has been observed that new recruits understand brand promises, create an initial expectation and develop a tacit psychological contract by employer brand communication and adherence of brand values by its current employees.
For example, employees may develop a psychological contract that they will get an overseas posting from the organization during recruitment process where interviewers might have explained a lot on global foot print of an Indian MNC. The job applicants may infer employer brand values and expectation based on their recruitment materials. The organisation that emphasizes promotion and salary may be perceived as valuing dedication to career. It was found that new recruits infer more positive characteristics of employer brand about an organisation when exposed to a friendly recruiter than an unfriendly one.
Regardless of whether a psychological contract has been established in a manner that can be objectively verified, or not, the reactions to perceived breach are real. Breach of psychological contract is a strong input for new recruits’ decision to stay for long with an organization. Like any source of potential advertisement, the employer brand offers a promise, which if unfulfilled, can be a detriment to attracting the right candidates, and increases employee turnover.
Since employer brand is a double-edged sword, there should be adequate precaution while communicating its brand value to all stake holders and adherence of brand value by initial process owners. The success of employer brand is to create a positive psychological contract among new recruits which leads to a long stay with organizations.