Monday 23 January 2012

What role does branding play in Employment Marketing?

My view of employer branding is that it is a limited realisation of what marketing principles could offer HR.  Its narrow focus on recruitment, and particularly recruitment advertising, reflects the interests of those involved in employer branding. Recruiters who think branding is all there is to marketing are in dialogue with advertising and recruitment agencies who think recruitment is all there is to HR.    
In order to understand the importance of brand in the marketing of employment, we first need to look at how people make purchasing decisions. For each of these purchasing behaviours, there is a seller’s marketing function looking at the transaction from the other end of the telescope. Their marketing strategy will cover developing the product, formulating the brand and advertising, choosing the appropriate routes to market, and setting a price that will appeal to the consumers they are targeted, and also meet the business plan.


f.m.c.g.

Semi-durables
Consumer
Durables
Major purchases
Business purchases
Low cost                           >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>                      High cost
Simple pricing                  >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>              Complex pricing  
Subconscious decision   >>>>>>   individual conscious decision >>>>>  Collective conscious decision


Fast-moving consumer goods. These are bought by habit. They are the kind of things you throw in the supermarket trolley with little conscious thought, such as breakfast cereals, canned drinks and toiletries. But the purchasing choice is not a random one; consumers are influenced by advertising and develop loyalty to their brand. The visual side of branding – product name, logos, package design – is essential to identify the product, and remind consumers of the advertising. When asked about their reasons for brand choice, consumers may find it hard to express; that’s why focus groups were invented. Items are low cost, and pricing is straight forward.
The visual identity of the brand, conveyed by the logo and the packaging, is the only means of communication with the consumer at the moment of purchase. Imagine if all soap powders were sold in unmarked plastic bags; how could you differentiate one brand from another?

Semi-durables. Fashion items are a good example. The brand is important, but consumers devote more conscious thought to the product choice e.g. does this suit me? The brand covers a wide range of products. Items are higher cost than f.m.c.g., but still one price for a simple transaction e.g. a £500 pair of shoes. 
Whilst the marketing function will want to develop a strong brand identity, the brand identity does not feature prominently on the product. The products selected must be consistent with the brand; the vendor cannot swap randomly from “bargain basement” to “high-priced luxury”.
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Consumer durables.  These are occasional purchases of expensive items. The purchaser is likely to put a lot of conscious thought into their choice. If buying a mobile phone or laptop, they are likely to read some special magazines, ask their friends what brand and model they have bought,perhaps have a list of questions to ask the shop assistant. The cost is high, and the pricing is often more complex than a spot price. Are there running costs or consumables costs to consider, and is it worth taking out the extended guarantee?
For the marketer, the marketing strategy will place great importance on product, as the features of the product are important to, and will be subject to prolonged assessment by, the consumer.  Product features will also be reviewed by consumer magazines and websites, and PR to professional reviewers is important. In distribution channels where sale staff might answer consumers’ questions, part of the marketing plan will be training those sales people to sell the product.
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Major purchases.  These are very expensive items that are bought rarely, such as a car or a house. The amount of conscious thought applied to the choice is usually in the realm of “agonising”. The consumer will be very specific about their needs, and put a lot of time into product selection. The pricing issues are complex. The consumer considers not just the initial price, but finance options, running costs and likely resale value. When buying a house, the purchaser will consider factors that they are not directly purchasing, such as what is the neighbourhood like, how good are the local schools? The decision will affect other purchasing decisions, such as commuting costs.
Brand, in the sense of logos and trademarks, are a minor part of the marketing plan. For example,  house builders will have a marketing strategy that will define the sector of the market they are targeting, the areas and locations, and the features of the houses will be geared to the lifestyles of the target groups. They will have a logo, but that is infinitely trivial when it comes to buying and selling houses.    
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Business purchases. When companies purchase things, the purchasing decision is very overt and rational, as it usually involves several people. Detailed reports are written, and alternative products are carefully evaluated. The cost is high, and the pricing complex.
The marketing plan from the manufacturer is likely to be very sales-led, and with great emphasis on the product.  An organisation is not going to buy capital equipment, or buy in a service that is critical to their business plan, on the basis of an eye-catching logo on a website or in a brochure.
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So what has this got to do with HR and employment? If someone is choosing a job, what kind of purchasing decision are they making? Admittedly they are “purchasing” with their time and effort rather than their money, but they are nevertheless choosing between employment products. I don’t think it’s a fmcg kind of decision – they don’t just recognise your logo on an advert and say “Yes – that’s the one for me!  I think for most people it is somewhere on the scale between consumer durable and major purchase. Before committing to a decision they will want to know what the features of the job are – what will they have to do? They will be thinking long-term as to whether this job fits into their life plan, and will it enhance their own “resale value” to future employers.  They will be making a thorough assessment of the pricing structure of the employment product. The starting salary is only part of the picture; what about the future earnings prospects, the benefits, the non-financial features such as terms and conditions.
With any purchasing decision, one consideration for the consumer is what kind of people also buy the product. With the employment product, you are going to be spending most of your week with people who made the same purchasing decision. That is a more significant relationship than with the neighbours you will gain when buying a house.    
As with consumer durable purchases, the consumer of the employment frequently re-evaluates the purchase. With a car, you will re-evaluate your choice when you buy fuel (should I buy a hybrid engine model next time?), when the servicing bill is presented, when the holiday luggage won’t fit in it, when you need more or fewer seats as family needs change, when friends and colleagues buy a new car, when you see new models advertised. If you really made the right choice for you, the questions might be infrequent, and always answered positively. How often do you re-evaluate your job?  If you feel it is just the right job for you, the questions might be infrequent, and always answered positively.  But the range of issues, the degree of emotional commitment to the job and the duration of the working relationship mean that you will re-evaluate your job choice with more deliberation than when choosing a box of breakfast cereals or a pair of shoes. Every appraisal, every pay review, every particularly good or bad week at work, and comparisons to how friends and relatives are faring in their careers are all opportunities to decide whether to stay or change jobs.
HR is concerned with marketing employment as a continuing relationship with employment consumers. Recruitment is a part of that, and brand (in the sense of image portrayed in recruitment advertising) is a small component of that part.   

Wednesday 11 January 2012

We have already got Employer Branding – isn’t that enough?

I did get the concept of employment marketing into print before employer branding came along, though only in letters to professional journals. It was not until 1996 that I had full articles on employment marketing published, and by then employer branding was catching on.(These articles are reproduced below, see blog for 3 January and 26 December.)  So I view the rise in popularity of employer branding with mixed feelings. It is applying a marketing technique to some of what HR does, which makes it an ally. My antagonism to employer branding is that by applying some of marketing to some of HR, it blinds HR people from seeing the possibilities of using all of marketing across everything that HR does.
One obstacle that both approaches share is the general ignorance of marketing amongst HR practitioners (at least in the UK). Most see the terms “marketing” and “branding” as synonyms for each other, and both meaning “advertising and promoting.”  I am not going to attempt authoritative, detailed definitions here – if you are an HR person who has never read a marketing textbook, go and read one right now.  
The current Wikipedia definition of employer branding is good enough. “Employer branding has been defined as the sum of a company’s efforts to communicate to existing and prospective staff what makes it a desirable place to work, and the active management of a company’s image as seen through the eyes of its associates and potential hires. “
There’s nothing wrong in that. It’s a good idea to have a positive brand image rather than a bad one. We would all like to be perceived as good places to work. It then gets seen as the concern primarily of the recruitment function and, for big organisations, also the concern of corporate affairs. For many HR practitioners, the mechanisms by which you manage employer branding are the recruitment channels you use, the look and feel of the recruitment website, the organisation’s mission statement and code of company values, and the PR efforts of the organisation. Some HR people put too much emphasis on the visual aspects of company logos, advert layout, etc. – reflecting the kind of branding relevant to fast-moving consumer goods. ( In a later blog, I’ll discuss the relative contribution of the visuals; branding in the sense of trade marks, logos and packaging, to employment.)  
So what does employer branding not pick out of the marketing toolkit? Quite a lot, I think.
In many cases, HR practitioners do not have a target section of the labour market in mind – “we want the brand to appeal to people”. Great – you’ve narrowed it down to a species.  Just applicants from homo sapiens need apply!  For companies like national supermarket chains, they might justify appealing to “the general public” as their product brand does, and their recruits come from a very broad range of the labour market. For many organisations, there are particular groups that you want to attract because they are key to your business.
Once you have identified those sectors of the labour market, you can do some competitor analysis, and research how your product offering (all aspects of the careers and jobs you offer) are perceived by the relevant employment consumers. This can bring in the marketing approach to pricing to ensure that your remuneration is competitive for the employment consumers you need to attract and retain. The marketing discipline of product development can identify if certain aspects of the work you offer appeals or discourages the employment consumers you need to attract. For example, does it involve using leading-edge technology that will have an additional appeal? Perhaps the work you have to offer involves using legacy technology that is a negative factor that you will have to compensate for in offer aspects of your offering. 
The brand reality exists in the minds of potential and current consumers. Their perception can be influenced by things you do to the product, its pricing or promotion. The brand is not something unilaterally decided by the organisation and then transmitted one-way to the consumer.
It seems for most HR people who want to do employer branding, the idea of a never-ending interaction between employment product offering and consumers’ expectations is a bit too complicated. Let’s just start the process in the middle and invent a brand.  For example, here is a quote from a 2007 CIPD paper on employer branding:-
“Employer branding begins with the creation of an employer brand image, what an organisation’s senior managers want to communicate about its package of functional, economic and psychological benefits..”  
 The CIPD’s other employer branding publication in 2007 “Employer Branding: A no-nonsense approach” saw developing your employer brand as basically a project. Get buy-in for the project, get a budget for research, choose an agency to help you, within a few weeks you will have a new web site and a smart logo, and that’s employer branding done – simples!
A further limitation of the employer branding approach is that even when done very thoroughly, it assumes there is only one branding strategy within marketing. The assumption is that employer brand must be an example of multi-product branding. This is where all products of a company sit within one brand; BMW cars is a good example. Other companies go for the approach of multi-brand products, where individual products have their particular brand. The diverse products of Procter and Gamble epitomise this approach. Could there be circumstances where an employer should opt for a  multi-brand strategy?  If an organisation has acquired a subsidiary with a very different ethos and profile of workforce, keeping separate identities might be the best option.  To offer an example from personal experience, I worked for the UK subsidiary of a Far East corporate. In its home country, the corporation was a household name, a major employer able to offer long-term careers, and was strong on in-house training. Within the UK market, our subsidiary was small, unknown and rapidly growing. In the UK we attracted people who saw their career as something they managed by moving through different companies.  Trying to impose the parent company’s brand and employment products would not only be inappropriate, it would actually deter the kind of people we needed – entrepreneurial and comfortable with risk. The parent company brand might appeal to those who wanted a risk-averse corporate career, but we could not deliver that in the UK subsidiary. Different employment products pitched to different target market segments cannot be the same brand.  
The role of the marketing function is not to manage the brand. Their role is to get people to buy the product. Brand is only an intermediate step in the process. Applying marketing to employment means every change HR makes is making a marketing decision.   

Tuesday 3 January 2012

“How marketing can sell your personnel product”

Article from “People Management”    13 June 1996.
“Viewpoint”
“How marketing can sell your personnel product”.

As a profession we are constantly urged to be more strategic. Many HR people have been convinced that the way to do this is to adopt “best practice” techniques whenever possible Recently a trend to question the benefits claimed by some techniques, and to topple management gurus from their pedestals, has become evident. If we now realise that strategic nirvana cannot come through re-engineered, competency-based, 360-degree appraisal, or whatever, where do we go next?
Marketing is a management discipline that aims to analyse consumers’ motivation, and so predict their purchasing behaviour. On the basis of such analysis, the marketer defines the product to satisfy different segments of the market, then prices, distributes and promotes the product accordingly. If we see employment as a product, and employees as consumers of employment, then marketing can provide a useful model of what personnel should be doing to be strategic.  
Some marketing approaches to personnel have been applied in recent years. In their book “Raising the profile: Marketing the HR function” David Clutterbuck and Desmond Dearlove aurgued that the function’s services should be professionally marketed within the organisation. And the Workspeak consultancy applies marketing principles to recruitment, such as accurate segmentation of the labour market. But whilst these variants show that there is interest in marketing, neither apply marketing as a model for the full spectrum of personnel services.
The power of marketing as a general model for personnel is that it does not assume 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. Many of the bandwagon techniques that have dominated the personnel literature to date assume a bogus universality. To use “the new psychological contract” as an example, it assumes that all organisations used to offer lifetime careers (untrue), that all organisations are now unable to offer such careers (also untrue), and that employees are ready to renegotiate their career expectations (doubtful). If personnel applied the analytical approach of marketing, and the idea of the segmentation of the market, such generalisations would soon collapse.  
For examples of the disillusionment with management and HR bandwagons, you need look no further than the 2 May issue of People Management. Almost juxta-positioned were an autopsy on re-engineering, Binna Kandola’s counsel that competencies do not suit all organisations, and a brave confessional piece on “best practice” going wrong (self-directed learning at Price Waterhouse).
HR theorists can do no more than preach that we should always take organisational culture and climate into account. Marketing gives you the tools to measure the expectations of your workforce, and to test whether your proposed innovations would meet them. Formal market research techniques such as surveys and focus groups, can supplement our informal knowledge of the workforce’s needs and aspirations.
Our function’s creditability is determined by the hit rate of interventions that are judged to be successful by our client organisation. Whenever you feel that a programme or project is hampered by unenlightened managers, and ignored by their ungrateful subordinates, stop! You are trying to push a product that they do not want.  A marketing approach does not mean finding some way of jazzing it up to sell it harder. It means you should find out what the client wants, and respond to that. When trying to integrate HR into business strategy, focus on what line management see as the main business issues. Asking the board to tack on HR’s pet concerns to a business strategy does not guarantee integration.   
Product differentiation, a key concept of marketing, gives another insight as to why bandwagon techniques are no salvation. This is the introduction of different features into products to satisfy various segments of the market. Some personnel theories have verged on saying that if we all adopt a particular cluster of techniques, we shall all be strategic. Remember HRM? That came close to saying that if you had performance management, flexible benefits and individual contracts you were strategic. If you didn’t, you weren’t.
But the breakthrough by which personnel becomes valued as a strategic contributor to the business will only happen by doing different things. I shall do things consistent with where my company is positioned in the labour market. These may be very different from what you will do in your company, but we could both be equally professional at marketing our employment products. Competitor analysis reveals which features are “industry standard” and offered by all, and the scope for features that differentiate one company’s employment product from its competitors.
Another key concept in marketing is the “marketing mix”. This is the combination of product, price, place and promotion that best meets consumer needs. “Defining the product” is what the personnel practitioner does in identifying core and peripheral employment, devising career structures, and job analysis. “Pricing the product” is known in personnel jargon as compensation and benefits. We are “promoting the product” not only when we advertise for recruitment, but when we communicate to employees on any employment matters.  We have been marketing the employment product all the time without realising it.
Whilst a marketing approach is not difficult to learn, its adoption by the personnel profession requires some jettisoning of mental baggage. In addition to questioning our current concept of best practice, forget the platitude “people are our greatest asset”. Assets are passive entities that organisations control totally. They can end up being stripped, liquefied or frozen. Who wants to be an asset? Seeing employees and potential employees as “employment consumers” recognises their ability to choose a different supplier of employment.
Most personnel people will also have to re-evaluate their view of marketing as consisting only of persuasion through advertising. If you have not already done so, read an introductory textbook on marketing. At the very least it is useful business education – and it might provide inspiration.