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.

3. This theory lays stress upon the relationship between the employee and the organization wherein
the employee starts looking at the overall rewards and recognition for working for the organization
instead of just the monetary benefits.
I will now examine the Brand Equity theory. According to David Aaker, a marketing professor and
brand consultant, Brand Equity is “a set of brand assets and liabilities linked to a brand that add to or
subtract from the value provided by a product or service to a firm and/or to that firm’s customers”.
Brand equity theory can be related to the field of employer branding in terms of the effect brand
knowledge has on the potential and existing employees of the firm.
The brand equity of the employer attracts potential applicants to apply. At the same time, it
encourages the existing employees to stay with and support the company. Some of the research
work being done in this field suggests that comparable recruitment, selection, and retention efforts
from different organizations will cause the potential and existing employees to react differently only
because of the underlying employer brand equity associated with these organizations.
From the above discussions, I can conclude that the credible brand equity of a firm establishes a
greater chance of building competitive advantage in terms of its internal as well as external
customers, i.e., its current and potential employees.
On a personal note, I’ve worked for two highly reputed firms working in two extremely diverse
domains. My first company was a major player in the telecommunications equipment industry while
the second was one of the world’s largest engineering, procurement and construction companies
the world. Not only were the domains of these two companies quite different, their HR practices,
and those related to branding in particular, were also quite distinct.
The former focused more on external branding: huge recruitment drives, leveraging social media to
spread the word about these drives and the benefits/perks given to employees upon joining. They
also highlighted their extensive training and onboarding programs and made them especially
attractive for fresh graduate students (like myself). The brand value associated with the firm rose
and a sense of pride upon being associated with the same made the recruitment drives a huge
success.

4. The latter did not focus that much on building an external brand but rather focused its efforts on
retention and re‐recruitment. The rewards for being associated with the firm for a long period of
time were extremely attractive. The firm also ensured that employees got ample opportunities for
personal as well as professional development. Moreover, maintaining a healthy work‐life balance
was emphasized and the company’s culture of safety was ingrained into system itself. All this, over a
period of time, created a very strong internal brand which not only ensured very low attrition rates
but also saw the recruitment of ex‐employees who couldn’t find a similar environment elsewhere.
Overall, I believe that employer branding is an essential component of human resource management
because it ensures that the firm is able to project its strengths to both existing and potential
employees and leverage the resulting association to cut costs and have a satisfied workforce.
References:
1. Aaker, David A. (1991), “Managing Brand Equity”, New York: The Free Press
2. Ambler, T and Barrow, S. (1996), “The employer brand”, Journal of Brand Management,
Vol. 4, pp. 185-206
3. Barney, J.B., (1991), “Firm Resources and Sustained Competitive Advantage”, Journal of
Management; 17, pp. 99–120
4. Barrow, S. (1990), “Turning recruitment advertising into a competitive weapon”, Paper
delivered at the CIPD Annual Conference, Harrogate, UK
5. Melewar, T.C. (2008), “Facets of Corporate Identity: Communication and Reputation”,
Routledge, pp. 55-65
6. Rousseau, D. (1995), “Psychological contracts in organizations: Understanding written and
unwritten agreement", Sage Publications, Inc.
7. Sokro, E. (2012), “Impact of Employer Branding on Employee Attraction and Retention”,
European Journal of Business and Management, Volume 4, No. 18, pp. 164-173