It is often useful to apply the concepts of Brand Management to Human Resource
Management in order to address issues like skill shortages, improve growth and maximize profits. In
this essay, I explore the reasons behind companies opting for employer branding and try to
rationalize the importance of Employer Branding by employing concepts from established theoretical
frameworks.
1. Employer Branding
Course: Basics in Human Resource Management (EM1F4M22)
Professor: Monsieur Jean‐Jacques Hincker
Submitted by: Lov Loothra
Abstract: It is often useful to apply the concepts of Brand Management to Human Resource
Management in order to address issues like skill shortages, improve growth and maximize profits. In
this essay, I explore the reasons behind companies opting for employer branding and try to
rationalize the importance of Employer Branding by employing concepts from established theoretical
frameworks.
The term, “Employer brand”, was first used in a managerial context in 1990. But it was not until
December 1996 that an initial definition was published in the Journal of Brand Management by
Simon Barrow and Tim Ambler. In the paper, employer brand was defined as "the package of
functional, economic and psychological benefits provided by employment, and identified with the
employing company".
Information is omnipresent in our world today and it gives prospective employees a chance of
exploring the perks and privileges offered by an employer before they commit to the recruitment
process. Thus it becomes important for a firm to differentiate itself from its competitors in terms of
the value proposition it offers to its employees. It comes as no surprise, therefore, that research into
employer branding has gained a lot of momentum in the knowledge based industry.
An important reason for the aforementioned fact is that, in addition to increasing the number of
quality applications for any particular position, employer branding also helps in increasing the total
number of offers accepted by the candidates. This, in turn, helps a firm in cutting down its
recruitment and selection costs.
Furthermore, an increase in the visibility of the employer’s value proposition motivates the existing
workforce to continue with the firm and give its optimal performance. This sense of association and
pride in the employer’s brand leads to a reduction in the attrition figures of the firm which augments
the stability of the workforce. This helps the firm reduce the training and on‐boarding costs for new
hires. Moreover, with this enhanced stability, the firm can leverage upon its existing knowledge base
and level of learning which is critical in executing complex projects.
2. The message a firm uses in order to brand itself says a lot about its culture. Hence the actual content
used in the branding strategy can be leveraged to better engage the current and potential
employees with the culture and strategy of the firm.
Recent research indicates that, not only is employer branding useful, it is critical in our increasingly
knowledge‐based economy where skilled employees are often in short supply. Furthermore, since it
caters to both internal as well as external marketing it becomes as critical as the corporate and
product brand of the firm.
Moving further into this analysis of employer branding, I will take the help of a few well‐established
theoretical concepts to rationalize the need and importance of this field in human resource
management.
First, I will examine the Resource‐based view of the firm. This theory suggests that the resources at a
firm’s disposal can contribute to its sustainable competitive advantage. J.B. Barney’s research in this
field suggests that the possession of resources that are rare, valuable, non‐substitutable and difficult
to imitate allow a firm to move ahead of its competitors. Human Capital is the resource which can
create competitive advantage for the knowledge based. A firm can thus use external marketing to
create a distinctive brand which allows it to acquire distinctive human capital thus building its
competitive advantage. On the other hand, a firm can make use of internal marketing to help in the
development of a workforce that is hard for other firms to emulate. This puts it at an advantage in
terms of resources.
Moving on to the theory of psychological contract, the concept of such a contract traditionally
enforced loyalty in the workforce in lieu of job security. The recent trend towards downsizing,
outsourcing, and flexibility on the part of the employer has, however, led to a new form of
psychological contract whereby the employer provides workers with marketable skills through
training and development in exchange for effort and flexibility.
By examining this current trend, we can conclude that firms can make use of employer branding in
order to advertise the various employee benefits they offer. This includes training, career
opportunities, personal growth and development.