Branding tied to core values attracts talented work force

Mention Nike to anyone in the world and the company's ubiquitous swoosh logo instantly comes to mind, likely followed by images of Tiger Woods and Michael Jordan in their respective moments of sports glory. Through years of successful ad campaigns, celebrity pitch people, and innovative products, Nike has become a global powerhouse and a brand that clearly transcends the label of a mere sneaker company. Indeed, Nike personifies the power of branding.

A list of companies keeping pace with Nike in the branding stratosphere — Harley Davidson, Procter & Gamble, McDonalds, and Toyota to name a few — are proof positive that branding is business's most powerful tool for conveying the definition and spirit of a company, while building a competitive advantage in the marketplace.

But not all businesses can count on, or ever hope to build, such recognizable brands. Are they left out in the cold when it comes to establishing competitive edge? A new concept gaining traction in the human resource management (HRM) domain argues that co-opting the branding concept into the HR arena helps companies carve a competitive advantage by driving successful hiring practices.

An "employment brand" can be imperative for a company seeking to recruit new employees and retain current employees, says Robert Cardy, a management professor specializing in human resource management at the W. P. Carey School of Business. "Quite simply, it differentiates you in the marketplace, which is, strategically, what companies should be striving for," he says.

Defining the brand

Branding succeeds by getting consumers to identify with characteristics of products or services outside of the more functional aspects — characteristics that hit buyers' hearts or wallets. Similarly, the concept of the employment brand goes beyond the simple transactional idea of hiring workers to do a job, and gets at the more emotional aspects of what it means to work for a particular company.

"An employment brand can be defined loosely as set of HR practices and policies that form a cohesive whole, and portray a particular image to current employees, customers, and job applicants," explains Cardy. Most companies in a particular industry offer similar salaries, medical benefits, and pension plans, so businesses must offer a package of HR policies, practices, and activities that convey a consistent tone and message to employees in order to stand out. Doing so helps employees and potential employees understand and connect on a more emotional level with the company.

When thinking about their employment brands, "companies must ask themselves, 'Outside of the short-term transaction of wages for labor, what additional value does employment with our organization provide to an employee?'" explains Cardy. "Employees, applicants for employment, and potential applicants — even potential customers — all need to be aware of the employment practices if a brand image is to develop and have an impact on the company's bottom line."

Most employment brands are based either on the brand for the product or service a company provides, or on the core values of the organization. With the first method, the employment brand is designed to be consistent with the brand already established for the business. Nike, for example, might develop an employment brand that encourages innovation among employees and promotes a healthy, active work environment — both of which are hallmarks of the company's product brand.

Employment brands based on the core values of an organization are likely to reflect more personal traits, for example, such "warm fuzzies" as the importance of family, mutual respect, communication, and integrity. Surprisingly, the latter has more staying power, Cardy argues.

"Basing an employment brand on the business brand certainly makes conceptual sense because you want your image to match or facilitate the brand image for your product and service," he says. "This approach, however, is not built to last because brands are at the whim of the market. A business's core values remain a solid and unchanged base, which offers a stable bedrock for the brand."

Cardy points to Minneapolis-based Medtronic, a manufacturer of high-tech implantable medical devices with a facility in Tempe, Ariz., as a business whose employment brand is solidly based on core company values. The company places great emphasis on ensuring it communicates its values to both prospective and current employees.

"When we establish HR practices, everything is driven by our company mission," explains Bob Enderle, director of organization development for Medtronic. "We embed within our selection process questions that get at the values of our organization. We look for candidates with a high level of integrity, innovation, and passion." By emphasizing these values from a prospective employee's first exposure to the company, and continuing to reinforce them with current employees, Medtronic is consistent with its message.

Indeed, in its most recent employee satisfaction survey — given to all 1,400 employees — 95 percent understood the mission and values of the organization, while 94 percent understood how their job supported the mission, says Enderle. These high numbers reflect the success of the company's employment brand, which Enderle sums up as "careers with a passion for life."

The strong emphasis on core values and work/life balance has helped Medtronic's employment brand resonate with employees. The company offers such benefits as wellness programs, flex time, and telecommuting options, among others, which Enderle says are driven from the desire to have people remain passionate about their jobs.

The company's support for social compassion, for instance, is reflected in its annual community day event, started six years ago. Medtronic shuts down operations and allows employees to take the day off — with pay — to work for nonprofit organizations. The event is popular, with about 95 percent of employees participating, says Enderle. The company's philanthropic support also kicks in year round; if an employee donates 40 hours in the course of a year to a nonprofit organization, Medtronic provides $500 in the employee's name to that organization.

"One of our key tenets is to provide an employment framework that allows individuals to achieve a level of personal satisfaction, while at the same time contributing to the company's success," Enderle says. "If we do that, we feel we'll achieve the business results we need." And this attitude appears to be working. Over the last 15 years, Medtronic has grown at an annualized rate of 15 percent — in both revenue and earnings, according to Enderle.

The employment brand also helps differentiate Medtronic in a crowded marketplace. At the Tempe facility, Medtronic competes for employees with such big names as Motorola, Honeywell, and Intel. "Our 'quality-of-life' branding really resonates with candidates," says Enderle.

"Our employees often tell us they chose to work at Medtronic over other companies because of that." These practices have helped the company develop a brand as a place where employees are treated with respect, says Cardy, and consequently, it enjoys one of the lowest turnover rates and longest tenured workforces in its industry.

Eddie Bauer offers another real-world example of successful employment branding. Admittedly, the outdoor retailer's product brand image is pretty similar to its employment brand, but nonetheless, its employment brand is clearly values-driven. Elements of its employment brand include social responsibility, diversity, career growth, and work-life flexibility, explains Cardy.

This is reflected in company policies including a casual dress code, rewards for philanthropic and environmental efforts, a pristine location, and employee discounts, among others. "For its part, a good employment brand strengthens the Eddie Bauer product brand and vice versa," says Cardy.

Taking a strategic approach to employment branding is key. "To be successful, an employment brand should be a strategic decision," Cardy says. "It should be rolled into mission planning for the organization. Determining how a company wants to be known as an employer, and how that helps them differentiate themselves and compete in their industry is a large part of it."

Still a novel idea

Though plenty of buzz surrounds the employment brand concept in HRM circles, it is by no means the dominant philosophy. HR departments still fill a mostly job-focused function at the majority of U.S. companies. Traditionally, HR practices have been developed based on tasks performed by workers, explains Cardy. The task analysis then drives selection systems, testing, interview questions, performance appraisals, training, compensation, and other policies.

Most companies look to benchmarked practices from leading companies in their industries when setting HR policies. "If one company is doing 'x' in terms of performance appraisal, and some other company is doing 'y' for interviewing and selection, other companies cobble these ideas together and call them 'best practices,'" Cardy says. "In reality all they've done is copy other people. Companies end up with a set of policies that don't necessarily go together or send a consistent message or image."

The employment branding trend is a departure from this strict focus on operational effectiveness. As with all things new, it will take time — and some solid evidence of effectiveness — before it becomes mainstream.Branding giants such as Nike will likely need more empirical research before embracing this concept in the HR suite. Identifying major employment brands, finding a broad set of dimensions to describe employment brands, and determining ways to assess the effectiveness of employment brands will all help legitimize the concept.

But the idea that HR can play a larger role in shaping the strategy and brand of a company as a whole is one that excites Cardy. He sees interesting opportunities for collaboration between marketing and HR departments, whereby HR receives more recognition as a critical player than it does now.

"This is what HRM professionals should be striving towards," he says. "Rather than trying to copy one another and come up with a homogenized approach, let's build a unique set of practices and policies that make a meaningful whole."