This article was published in the Human Resource Managers Yearbook 1997, published by AP Information Services, ISBN 0-906247-80-2. Notes added Dec 2011.
“Employment Marketing – An alternative to chasing bandwagons?”
David Price – Department Manager – Personnel, NEC(UK) Ltd.
Why do we need a new model of HR?
As a profession we seem to be continually agonising over our role. How can we be strategic? How can we influence the business? Whilst it is currently fashionable to warn against bandwagon techniques and theories, still seem addicted to them. Rather than a collection of modish techniques sold as panaceas, the profession needs a “meta-model” that guides us to choose the appropriate response to problems facing particular organisations. Ideally a model of personnel management should be universal - in the sense of that it should be applicable to all organisations that employ people, and enduring – in the sense that it should survive fads and fashions. Seeing our role to be marketers of employment can provide that model. ( in 1997, usage of “HR and “personnel” labels was fairly even – I alternated between the two, to include all the profession.)
What has marketing got to offer?
Like HR / personnel, marketing is a management discipline attempting to analyses and predict the behaviour of people. The process of marketing goods and services is a repeated cycle of identifying consumer needs, developing products that meet that meet those needs, and then pricing, distributing and promoting them effectively. If we see employees as “employment consumers”, who can exercise their free will when deciding when to join, and whether to stay with a company, the relevance of marketing is apparent.
The power of marketing as a model for personnel is that it does not assume that there is one way to strategic success. It is a “meta-model” that can be used to develop the right kind of employment products for a particular organisation to achieve its business objectives. The analytical approach of marketing, from deciding which business to be in, through segmentation of the market, to market research, is something the personnel profession should emulate.
Who are the consumers?
The labour market is made up of people who can choose where to work. They are consumers of employment. An organisation does not need to attract all employment consumers; it needs to attract and retain certain groups who have the skills needed to achieve its business plan. Your workforce, managers and managed, core and peripheral workers, are your current consumer base.
Understanding your customer’s needs.
Any HR department has vast amounts of information about its current customer base i.e. its existing workforce. Age profile, education level, length of service distribution, number of previous employers – all such information should be readily available from the personnel information system. Add to this the “soft” information gathered through day-to-day contact with staff: career aspirations, social attitudes, feedback on how your organisation compares to previous employers, and so on. In total you possess a database about your current customers that any marketer of goods and services would covet greatly. If necessary, this information can be added to by conducting attitude surveys amongst the workforce on particular topics, or the organisation in general.
This information is vital when it comes to prioritising what the personnel department should be doing. Base your strategy on the demands of your consumers rather than “best practice” or “acting as the corporate conscience”. Any personnel initiative that is met with a wave of apathy indicates we are guilty of giving our customers what we thought they should want, instead of finding out what they did want.
This is not to say that employment marketing’s sole concern is with keeping the current workforce happy. Changes in the business may mean you have to change the shape and composition of your workforce, and so we will need to know the consumer needs of other groups within the labour market.
What is the product?
Employment is a by-product of the organisations production of goods and services. What the organisation does generates the raw material of employment. Imagine everything that needs to be done to make your organisation work from the formulating the long-term business strategy to emptying the waste bins. HR’s role is to market that raw material as organisational structures, careers, jobs and sub-contracted work.
A key concept of marketing, the “marketing mix”, can guide HR through the process of marketing employment. This is the combination product, price, place and promotion that best meets the needs of an identified group of employment consumers – a “segment of the market”, to use the other profession’s jargon.
“Defining the product”.
When imagining all the work to be done in your organisation, visualise it as one job description of enormous proportions. How would you divide that up into careers, jobs and teams? What rationale would you use to find the dividing lines? That is how we define the employment product.
At the most fundamental level we decide whether we offer employment as a long-term career in our organisation, or jobs that can form an episode in a person’s career as they move between companies. “job” in the sense means something shorter in duration than a “career”, not lower in quality. Larger organisations have more scope to offer intra-organisation careers than smaller ones, but organisations can choose where to position themselves on this factor. The decision affects many other parameters of employment. It determines whether the remuneration policy focuses on internal comparisons or market comparisons. It determines the relative importance of succession planning and management development systems. It will influence the value placed on professional qualifications within the organisation.
The concept of defining the employment product can be applied on the level of individual jobs as well as the bigger issues of career structures. The influence of marketing is that in analysing jobs you relate what the organisation needs doing to who in the labour market would want to do that job. Looking purely introspectively within the organisation can result in jobs that become personnel’s “problem vacancies”.
“Pricing the product”.
The field of compensation and benefits is the personnel’s equivalent to total product pricing in marketing. The recommended retail price of a product, or the salary indicator on a job advertisement, are only the simplest means of informing the consumer of the approximate price. With the product, assuming it is a complex product like a car, the consumer needs more information upon which to base their purchasing decision: servicing costs, fuel costs, depreciation, etc. With employment, the consumer needs to be informed of salary structures, major benefits, fringe benefits, etc. The car buyer’s “total cost of ownership” can be compared to the employee’s “total remuneration package”.
The process of pricing must be subject to the internal constraints of cost and the external constraints of what the market will bear. This holds true for products, services and employment. The pricing structure should be judged in terms of effectiveness: does it attract and retain the kind of employee the organisation needs? To achieve this it must be seen as a fair pricing structure, but what is fair in the minds of one segment of the labour market may not suit another. “Fairness” in one context may be that everyone gets paid the same, in another it may be that pay is linked to performance, or that pay is linked to different market rates.
“Promoting the product”
We are obviously promoting the product when advertising in recruitment, but that is not the only circumstance when a marketing approach is beneficial. Communicating to employees on any employment matter is an exercise in promotion. The message has to address the employee’s needs, and in their language. Each new personnel policy or benefit is a change in the features of the existing employment product, and has to be communicated to the consumer. This is not the same as saying that flash presentations and a HR department logo will enable you to sell any proposal. Without the market research to ensure that the product meets the consumer’s needs, any slick “hard sell” is doomed to failure. (2012 readers will be expecting some mention of employer brand here. Brand is important, but most HR practitioners think that employer branding is all that is needed. The purpose of this article is to lead HR readers to look at all that marketing can offer us.)
“Placing the product”
In the sale of goods and services, “place” in the marketing mix denotes which distribution channel is most appropriate to the targeted group of consumers. Do your potential customers buy from department stores, by mail order, or from specialist stores?
In personnel terms, this element of the marketing mix can be viewed in two senses. Sometimes geographical place is a relevant factor: could the employment product be “sold” to employment consumers in a different place? Seeking labour markets with lower wage costs, or introducing home working are examples of varying the place of employment delivery. “Place” in the sense of a distribution channel is also useful in recruitment. If you are targeting a particular segment of the labour market, where do such people look for jobs? Do they register with agencies, scan the specialist journals or read the national press when job hunting?
Getting the marketing mix right.
Evidently the four factors of the marketing mix interact. They must be consistent with the needs of the consumers that the organisation wants to attract. This is best illustrated by a real-life example.
A marketing and sales division of a hi-tech company was situated in central London. It needed to set up a small R&D team of software specialists. The Divisional Director initially wanted to keep all his division together on the central London site. I advised him that the R&D specialists he sought were currently working out of town, mostly in the Thames Valley. He could probably attract them into London by offering them all very high salaries and fully-expensed company cars, but they would appear to be on an “over the top” package compared to any salary survey. Senior management would challenge the apparent extravagance of the package. It was finally agreed to set up a satellite office in Reading, Berkshire for the R&D team. The factors of product (employment in software R&D), price and geographical place interacted. When a consistent mix of these three factors was agreed, the final element of promotion was straightforward. (Advocates of employer branding could suggest that good employer brand would help the recruitment process. It would, but it would not help make the decision between the two recruitment plans. The broader employment marketing approach helps make the decision.)
Advantages of the employment marketing model.
I stated initially that any model of HR should be universal and enduring. Employment marketing can be applied to any organisation that offers employment, from the blue-chip multinational to the corner shop. Many of the HR techniques advocated as best practice were devised in large multinationals. Practitioners in smaller organisations often recognise that these are not suited to their organisations, but are left with no alternative model. Employment marketing offers them a credible framework with which to generate an employment strategy appropriate to their circumstances, and so can said to be universal. Employment marketing is enduring because it is an intellectual discipline with which to evaluate passing fads, rather than something swept aside by them.
You may have noticed that this article has unveiled no new “techniques”. A marketing approach makes all HR techniques available, even those that have become unfashionable, such as Management by Objectives, worker participation or life-time careers. What the profession needs to develop is its analytical skills of diagnosing what is appropriate, whether or not it is trendy. This sentiment is dramatically opposed to the current notion of “best practice”. Assuming that 360 degree appraisal, or competencies is good for all, and that by introducing them we will all be strategic, is a delusion. Offering the caveat that “we have to take organisational culture into account” is pointless, if in the next breath we say “of course, organisational culture can’t be defined, it just the way we do things around here.” Marketing gives you the intellectual tools and proven techniques for analysing the employment that organisations offer. That is something infinitely more pragmatic than hazy notions of culture.
It is not difficult to learn about marketing. For most HR people the essential first step is clear our minds of preconceptions that marketing is all about selling soap powder or commissioning TV advertising campaigns. The second step is to read a good introductory textbook on marketing, and draw your own parallels to HR. (As yet there is no textbook on employment marketing, but I am working on it!) This should be the vision on the Damascene road: if you see the light it will change your approach to HR forever. But do it now. As companies begin to realise that their people are the only source of competitive advantage, HR must adopt marketing before the marketing function takes over this key strategic area. (Despite 14 years elapsing since publication, this is still the case.)
David Price graduated in psychology and then studied personnel management at Manchester Polytechnic. He has worked in local government, the paper industry and the hi-tech sector, mostly as a personnel generalist. He is currently Department Manager - Personnel at NEC (UK) Ltd. Since 1997, I have also gained experience of the publishing sector.
