Employer Branding and Retention Strategies

1. Employer Branding and Retention Strategies • Paige Wolf •

2. Learning Objectives • Business case: Setting the stage for effective recruitment and retention. • What attracts employees? • Attractiveness dimensions. • Employment branding at PacifiCare. • Employment branding activity. • What makes employees stay? • Retention factors at Google (video). • Generational differences. • Targeted retention at Deloitte. • Innovative retention at Best Buy. • Wrap-up

3. Business Problem Scenario • The organization: • Needs a qualified, talented person for a position. • Advertises and recruits for the position. • Hires someone for the position. • The employee: • Is trained and socialized. • Experiences a learning curve. • Becomes productive. • Leaves the organization.

4. Business Problem Discussion Questions • What are the business concerns related to this scenario? • What are the implications of these costs to employers in terms of recruiting and retaining employees?

5. Turnover Not all turnover is bad… • Dysfunctional turnover: When talented, experienced, knowledgeable, productive, well-networked, high-potential employees leave the organization. • Functional turnover: When disruptive or poor-performing employees leave the organization.

6. Psychological Contract HR and managers must partner to prevent dysfunctional turnover. • This requires understanding the “psychological contract”: The unwritten understanding regarding what both the employee and employer want from the employment relationship. • What is your psychological contract? • How does it differ from your parents’ and grandparents’ psychological contracts? • What other factors affect psychological contracts?

7. Recruitment: What Attracts Employees?

8. ASA Model (Schneider, 1987, 1995) The composition of organizations is determined by • Attraction: • People are attracted to organizations whose attributes are congruent with their own personal characteristics (e.g., values, personality). • Selection: • Organizations select applicants with attributes it desires (influenced by organizational founders). • Attrition: • People will leave organization if they don’t fit. ©SHRM 2008

9. Employer Attractiveness Dimensions • Interest Value: The extent to which an individual is attracted to an employer because of the excitement and creativity of the work environment. • Social Value: Attraction based on a collegial work environment with good team atmosphere. • Economic Value: Attraction based on salary and benefits. • Development Value: Based on recognition of work and career-enhancing opportunities. • Application Value: The employee’s ability to apply what they have learned to teach others and interact with customers in a way that is positive and humanitarian. Source: Berthon, P., Ewing, M., and Hah, L. L. (2005). Captivating company: dimensions of attractiveness in employer branding. International Journal of Advertising, 24(2), 151–172.

10. DaimlerChrysler Advertisement in The Economist

11. Employer Branding: What is It? Why Do We Need to Do It? • Employment branding is “internally and externally promoting a clear view of what makes a firm different and desirable as an employer.” (Lievens, 2007) • A consumer branding goal asks a person to buy a product or service. • An employment branding goal asks a person to change their life. • Why Do It? • By 2010, there will be 5-10 million fewer workers than jobs in the U.S. • Generation X’s workforce is half the size of the about-to-retire baby boomers. Adapted from: Estis, R. (2008). Employment Branding: Attracting and Retaining Generation NEXT. SHRM 60th Annual conference and Exposition, Chicago, IL. ©SHRM 2008

12. Employer Branding Research A strong employer brand is related to: • Pride of individuals expected from being organizational members (Cable & Turban, 2003). • Applicant pool quantity and quality (Collins & Han, 2004). • Stable and positive workforce attitudes and organizational performance compared to broader market (Fulmer, Gerhart, & Scott, 2003). ©SHRM 2008

13. Goals for Employer Branding • Establish an image of the employment experience. • Create synergy with consumer brand: • Align promise to customer with promise to employees. • Clearly state “what’s in it for me” to potential applicants. • Entice the right candidates to apply for the job. Adapted from: Estis, R. (2008). Employment Branding: Attracting and Retaining Generation NEXT, 60th Annual Conference and Exposition, Chicago, IL. ©SHRM 2008

14. Building an Employer Brand Discussion Questions • How is employer branding different from recruiting? • How do you start a branding effort? • What should your branding message include? What is your value proposition? • How should the level of branding efforts vary based on the economy? Source: Joinson, C. (2002). Building and Boosting the Employer Brand, Employment Management Today, 7 (3).

15. Five Steps to Building an Employer Brand • Understand your organization. • Create a compelling brand promise that mirrors your customer brand promise. Articulate your value proposition for employees. • Develop standards to measure the fulfillment of the brand promise. • Align all people practices to support and reinforce the brand promise. • Execute and measure. Source: http://www.hewittasia.com/hewitt/ap/australia/index.htm

16. PacifiCare • Launched a comprehensive employer branding campaign, including • Employee value proposition: • Envision. Innovate. Accomplish. • Consumer message: • Caring is good. Doing something is better. To what extent are these aligned? • Employee referral program (ERP): • ERPs are one of the best recruiting tools in terms of performance and retention. • Particularly effective when the referrals are coming from committed and productive employees. ©SHRM 2008

17. Employer Branding: Recruiting Advertisement Source: http://nasrecruitment.com/TalentTips/Archives/PacifiCare_white.pdf ©SHRM 2008

18. Employee Referral Flyer http://nasrecruitment.com/TalentTips/Archives/PacifiCare_white.pdf ©SHRM 2008

19. PacifiCare PacifiCare’s employer branding efforts have been recognized by the following awards: • Best Employer Brand: 2006 Electronic Recruiting Exchange • Best in Class Employee Referral Web Site: VirtualEdge West Coast User Group • Top 50 Employer for Minorities and Women: Fortune Magazine http://nasrecruitment.com/TalentTips/Archives/PacifiCare_white.pdf ©SHRM 2008

20. PacifiCare’s Results • Branding results: • 85% of interviewed candidates agreed with the statement, “PacifiCare is a good place to work.” This was a 25% increase. • 81% rated PacificCare either “one of the best” or “above average” as compared to other companies. • Employee referral results: • ERP participation increased by 31%. • Referral hires increased by 15%. • Conversion rate of referrals to hires: 85%. • Hiring manager satisfaction: 84.82%. http://nasrecruitment.com/TalentTips/Archives/PacifiCare_white.pdf ©SHRM 2008

21. Employment Branding Activity • Take out the recruiting advertisement/job announcement you found. • Share your advertisement or job announcement with a partner and answer the questions on the next slide. • Be prepared to discuss your answers with the entire class. ©SHRM 2008

22. Discussion Questions • What are the key messages expressed in the advertisement or job announcement? • Are aspects of the consumer brand mentioned or conveyed? If so, how? • How does the advertisement communicate what it is like to work at that organization? • Would this job announcement appeal to the types of employees the organization is seeking? Why or why not? • What recommendations would you have to improve the appeal to qualified candidates? ©SHRM 2008

23. Retention: What Makes Employees Stay?

24. Google • #1 on Fortune’s 100 Best Places to Work in 2007 and 2008. • Known for little bureaucracy. • Hire smarts; less emphasis on experience. • Good ideas are implemented, regardless of who they came from. • What is it like to work at Google? ©SHRM 2008

25. What makes employees STAY? • Advancement opportunities.* • Constituent attachment (co-workers, boss, employees). • Extrinsic rewards (pay, bonus). • Flexible work arrangements. • Investment in the organization. • Job satisfaction. • Lack of alternatives. • Location. • Non-work influences. • Organizational commitment. • Organizational justice. • Organizational prestige.* Green – cited significantly more by high performers than low performers. * - cited significantly more by higher-level employees than hourly.

26. Embeddedness Theory of Retention Premise:The more embedded an employee is in the organization, the less likely they will actually leave. Embeddedness factors include: • Fit: • With organization--working conditions, culture. • With community--affordable housing, commute, pace, etc. • Links (connections): • To people and projects in organization. • With the community. • Sacrifice: What would I have to give up? • From organization (benefits, flexibility, tuition, perks). • Community (schools, neighborhoods, friends). ©SHRM 2008

27. Discussion Questions • What are the practical implications of this study? • Which retention factors relate directly to employment branding efforts? • What do the study’s findings suggest about the utility of employer branding? • How could generational differences affect reasons for retention? Source: Hausknecht, J. P., Rodda, J. M., Howard, M. J. (2008

28. Generations in the Workplace We have four generations represented in today’s workforce: • Matures (born between 1901-1943). • Baby Boomers (born between 1943-1960). • Gen X (born between 1960-1980). • Gen Y (born between 1980-2000). View “The Millennials are Coming”(60 Minutes video).

29. Multigenerational Workforce • Each generation: • Shares a similar set of experiences and perceptions due to the events of their lifetime. • Brings a different perspective to the workplace. • Has different interactional styles and preferences. • May misinterpret words and actions of employees from other generations.

30. Multigenerational Workforce Employees across generations need to work together more today: • Flatter organizations. • Growth of performance and merit-based pay and promotion systems. • Globalization and knowledge-based economy requires collaboration.

31. Multigenerational Workforce Employers who maximize cross-generational communication improve knowledge transfer, yielding: • A better-developed workforce. • A more competitive position. Source: Kovary, G. (2008). How to Get, Keep, and Grow all Four Generations. 60th Annual SHRM Conference, Chicago, IL.

32. Generational Differences: Summary Source: Kovary, G. (2008). How to Get, Keep, and Grow all Four Generations. 60th Annual SHRM Conference, Chicago, IL. ©SHRM 2008

33. Generational Viewpoints on Job Changing • Matures: Job changing carries a stigma. • Baby Boomers: Job changing puts you behind. • Gen X-ers: Job changing is necessary. • Millenials: Job changing is part of their daily routine. Adapted from: F. Leign Branham, The Seven Reasons Employees Leave, presented at 2006 SHRM national Conference, Washington, DC

34. Generational Similarities How are we similar? • People all want to trust their supervisors. • No one really likes change. • We all like feedback. • Everyone likes security and the ability to balance work and life. Deal, J. (2006). Retiring the generation gap: How employees young and old can find common ground.

35. Targeted Employee Retention Deloitte • Low retention of women threatened their business. • Created the Women’s Initiative program designed to make Deloitte a better place to work, especially for women. • Developed mass career customization: • Employees needs differ at different life stages. • Increased choices in shaping career paths to fit life choices. • Focused on adaptability of employee and employer. • Made explicit certain trade-offs between choices. • Increased retention by creating a sense of loyalty and connection. Source: Women Leaders; Symposium, 22nd Annual Conference of the Society of Industrial and Organizational Psychologists; April, 2007, New York, NY ©SHRM 2008

36. Targeted Employee Retention Actions taken to retain and promote women Note: All programs and opportunities developed under WIN were available to both men and women. • Allow choice with regard to: • Pace of career progression. • Workload. • Location and schedule of work. • Up to five-year leave of absence while staying connected: • Maintain professional certifications (e.g., CPA). • Assigned a mentor and career coach. • Attend Deloitte functions. • Work as independent contractor. Source: Women Leaders Symposium, 22nd Annual Conference of the Society of Industrial and Organizational Psychologists; April, 2007, New York, NY

37. Targeted Employee Retention • Deloitte’s results: • 21% of employees at the partner, principal, and director level are women; Deloitte leads Big 4. • 46% of all employees are women. • Consistently recognized on Working Mother’s “100 Best Companies for Working Mothers” honor roll. • Has created or sponsored more than 400 professional development, networking and mentoring activities. Source: Women Leaders Symposium, 22nd Annual Conference of the Society of Industrial and Organizational Psychologists; April, 2007, New York, NY

38. Retention Innovations: Best Buy: Smashing the Clock • Best Buy’s situation: • Burnout among headquarters employees. • Management emphasis on face time/ • Expectation of 24/7 availability due to technological advances. • Solution: • Results Only Work Environment (ROWE). • Focus on what gets done, not physical presence. • No mandatory office time. • Work when and where you want – just get the job done. Source: Conlin, M. Smashing the Clock, BusinessWeek, November, 2006,

39. Best Buy: Smashing the Clock Results: • Average voluntary turnover has fallen drastically. • Productivity is up an average 35%. • Employee engagement has increased. Discussion Question From an HR perspective, what types of systems need to be in place to sustain ROWE on an ongoing basis? Source: Conlin, M. Smashing the Clock, BusinessWeek, November, 2006,

40. Discussion Question Based on what we’ve discussed and your organization’s mission and purpose, what could it do to improve the quality of recruits and retain the best talent? ©SHRM 2008

41. Conclusion • Building an employer brand leads to higher-quality and more efficient recruiting. • Generational differences are a source of diversity – use them to your advantage, minimize conflicts through training/education. • Create an organizational culture that serves to execute your strategy and retain and attract the best workforce. • Determine drivers of retention of your workforce. • Consider ways to create more “glue” for your high-performing population of employees.