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Employer Branding
Name: Employer Branding
Pages: 75
Year: 2013
Language: English
File Size: 1.17 MB
Downloads: 0
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THESIS ABSTRACT School Degree Programme Kajaani University of Applied Sciences, Finland Heilbronn University of Applied Sciences, Germany International Business Major in Human Resource Author(s) Nha Tran Duc/To Title Employer Branding for SMEs: Attracting Graduating Students in IT Industry vaihtoehtiset Optional Professional Studies Supervisor(s) Ruey Komulainen Prof. Dr. Ralf Bochert Commissioned by Date Total Number of Pages and Appendices 15.11.2013 51 + 20 Employer Branding has been an emerging topic in HRM for no longer than two decades. The concept of Employer Branding is usually stuck to large companies or MNCs. In addition, in depth researches on whether Employer Branding could also work for SMEs are very limited. Thus, focusing on the perspectives of graduating students, the prospective employees of SMEs, this research takes place to study the role of Employer Branding in SMEs, especially IT SMEs in Finland. In laying the theory background for the research, the theoretical framework demonstrated the relationship between the concepts of Marketing and HRM and how they are connected within Employer Branding. The understanding of Employer Branding theory provides the scheme for the whole research. Based on the theoretical part, research questions are then built and research is conducted in order to achieve the eventual objective: exploring the role of Employer Branding of IT SMEs in Finland. The research method of quantitative is utilised in this research. The analysis of empirical findings collected from the close ended questionnaire providHV PORURXJO XQGHUVPMQGLQJ RI POH VPXGHQPV SHU HSPLRQ PRRMUGV (PSORHU Branding, the impact of Employer Branding on their decisions to work for a SME, the sources of Employer Branding they perceive and their career orientation. Language of Thesis English Keywords IT SMEs, Employer Branding, graduating students Deposited at Electronic library Theseus Kajaani University of Applied Sciences Library


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PREFACE First of all, I would like to express my deep appreciation for my supervisor, Ruey Komulainen, who has always motivated me to always take another step further during the past three and a half years. Your words truly lift me up whenever I got stuck. Thank you for being my mentor and my friend during the tough time. I also appreciate Professor Bochert, my second supervisor from Heilbronn University for your support during my study in Germany as well as your supervision in my thesis. I would like to thank my statistics teacher, Simo M tt . Your help was tremendous for a student like me, who always finds that dealing with numbers is very challenging. My sincerest thanks also goes to all teachers and staff of our university, who always dedicate their great efforts for the progress of students. To my family members, whom I never find easy to express my gratitude or give my thanks, I always feel brave when encountering challenges, because I know that your unconditional sup port will never let me fall. Finally, thank you all my friends for always having my back. I guess it would be really boring for me not having someone to tease. Last of all, thank you Jamie, my soul mate, for having been by my side. There is a quote from Winston Churchill that shines up my way for years. ThH TXRPH JRHV HI \nR X D U H J R L Q J W K U R X J K K H O O N H H S J R L Q J 7 R G D \n , F R X O G S U R X G O \n U H P L Q G P \nV H O I W K D W , M X V W overcame one.


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CONTENTS 1 INTRODUCTION 3 1.1 Background and Problem Statement 3 1.2 Research Objective and Questions 3 1.3 Scope of the study 4 1.4 Structure of the Study 4 2 EMPLOYER BRANDING AS AN INTERSECTION OF MARKETING AND HUMAN RESOURCE MANAGEMENT 6 2.1 Marketing 6 2.1.1 Brand, Branding and Brand Equity 6 2.1.2 Corporate Brand 7 2.2 Human Resource Management (HRM) 8 2.2.1 Recruitment and Selection process 9 2.2.2 Strategic Human Resource Management 10 2.2.3 Resource Based View of Strategic Human Resource Management 11 2.3 Employer Branding 14 3 BUSINESS ENVIRONMENT IN FINLAND 19 4 THEORETICAL FRAMEWORK OF THE RESEARCH 23 5 METHODOLOGY 26 5.1 Selection of the Research Method 26 5.1.1 Quantitative Research 26 5.1.2 Data Collection 26 5.1.3 Questionnaire 27 5.2 Data Analysis 27 5.3 Validity and Reliability 28 6 EMPIRICAL FINDINGS AND DATA ANALYSIS 30 6B1 7OH HPSM P RI (PSORHU %UMQG RQ 6PXGHQPV GH LVLRQ PR JRUN IRU M FRPSMQ30 6.2 Perceptions towards Employer Branding and Values of Employer Brand 32 6.3 Sources of Employer Branding 36 6B4 6PXGHQPV FMUHHU 2ULHQPMPLRQ 37


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2 List of Tables and Figures Table 1. Instrumental Symbolic Framework in Marketing (Lievens, Highhouse 2003) .............. 16 Table 2. Theretical framework .............................................................................................................. 25 Table 3. Cross tabulation of Q6 x Q7 (n=176) .................................................................................. 31 Table 4. Relationship between the reference of working for a SME and working for a company in IT industry (Cross tabulation of Q5a x Q5b)................................................................................. 38 Table 5. Common terms and definitions in Emloyer Branding (Christiaans 2013) ...................... 19 Figure 1. HRM System (Armstrong, 2009) ............................................................................................ 9 Figure 2. Employer Branding in recruitment process (Knox, Freeman 2006) (Dukerich, Carter 2000) ......................................................................................................................................................... 15 Figure 3. Brand personality scale (Aaker 1997) (Chase 2012) .......................................................... 17 Figure 4. GDP Composition in Finland by sector of origin (CIA, 2013) ...................................... 19 Figure 5. Topic of comparison of Finland (World Bank 2013) ....................................................... 20 Figure 6. Q6: Does a SME has an employer brand? (n=178) .......................................................... 30 Figure 7. Q7: Will the employer brand of a SME attract the students to consider it as a prospective employer? (n=178) ............................................................................................................ 30 Figure 8. Q1: Do the students know the meaning of 'Employer Branding' before this survey? (n=176) ..................................................................................................................................................... 32 Figure 9. Q2: How instrumental attributes of employer brand affect the decision of a student to apply for a job at a company? ............................................................................................................... 32 Figure 10. Q3: How symbolic attributes of employer brand affect the decision of a student to apply for a job at a company? ............................................................................................................... 33 Figure 12. Student's career orientation after graduating .................................................................... 37


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3 1 INTRODUCTION 1.1 Background and Problem Statement The recent years in Finland have seen a talent war for labour due to the challenges of aging population and shortage of talents in dynamic industries, especially IT. Employer branding, thus, has been an emerging topic that draws particular attention from big corporations in Finland as an ideal solution for talent shortage. As a result, there are various researches on this topic for large companies. However, there are few studies showing a clear relationship between SMEs and Employer Brand LQJB 4XHVPLRQV VX O MV WRXOG HPSORHU NUMQGLQJ RRUN IRU 60(V" RU : R X O G H P S O R \nH U E U D Q G L Q J E H D F R Q F H U Q I R U 6 0 ( V " have been raised, yet the answers for them are still limited. A notable UHVHMU O LQ POLV ILHOG LV M PMVPHU V POHVLV IURP $MOPR 8QLYHUVLP\n LQ ROL O POH MXPORU 6LPRQHQ Aleksi studies the position of Employer Branding in Large Finnish Companies. It was an explor atory research as the study of Employer Branding is still limited up to this point. This study aims at exploring the connection between Employer Branding and SMEs, specifically Finnish SMEs in IT industry. The foundation of the study would mainly be based on the fields of Corporate Brand, Resource Based View and the topics of Recruitment and Selection process of Human Resource Management. 1.2 Research Objective and Questions Based on the background of business environment in IT industry, especially Software and Games development in Finland and the theoretical framework of Employer Branding, this research aims at studying the role of Employer Branding in SMEs in IT industry in Finland. The objective of the research is achieved through finding the answers for the following main questions: RQ1: WhMP LV POH LPSM P RI (PSORHU %UMQGLQJ RQ VPXGHQPV GH LVLRQ PR RRUN IRU M 60(" RQ2: What attract the graduating students when they look for a job? RQ3: From which source do the students build their employer brand perception?


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4 RQ4: What is the career orientation of the student after graduating? 1.3 Scope of the study Within the scope of this study, the Business and IT students currently studying at Kajaani Uni versity of Applied Sciences are considered as the main targets of research. According to the def inition of the European Commission, the term SME is comprised of three types of companies based on their size and turnover. Medium sized companies are those employing less than 250 people and having the turnover of less than EUR 50 million. Small sized companies employ less than 50 people and have the turnover of less than EUR 10 million. Micro sized companies, which are the majority of all types, employ less than 10 people and have the turnover of less than EUR 2 million. The scope of this study only concentrates on Small and Micro companies. Thus, the PHUP 60( LV OHQ HIRUPO UHIHUUHG to as Small and Micro sized companies that are currently op erating in the IT industry. The detailed information of definition of SMEs is further discussed in Chapter 3. The main goal of the study is to explore the role of Employer Branding in Finnish SMEs in IT industry. The general scope of employer branding is very broad including internal qualities of companies as well as the external qualities and business environment. Thus, understanding the expectations of potential employees is a crucial step to successful employer branding. Therefore, the research will look thoroughly at the expectations of potential employees, such as Business and IT students, of IT SMEs in Finland. 1.4 Structure of the Study Chapter 2 provides fundamental definitions and discusses key concepts of the research which are Brand, Branding, Brand Equity, Corporate Brand and how they are related to Employer Branding. Then, the concepts of Human Resource Management and Strategic Human Resource Manage ment are explained and then proceeding to the theory of Resourced Based View and discusses the view from the perspective of SHRM.


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5 In Chapter 3, the study provides fundamental aspects of business environment in Finland and the IT industry here. The discussed elements and conditions of Finnish business environment would formulate the understanding of the background in which Finnish IT SMEs are operating. Chapter 4 briefly explains how the theories are connected and illustrates the connection between the theoretical framework, research questions, hypotheses and survey questions. Chapter 5 discusses the methodology of the study to research the expectations of the students and, thus, study the role of Employer Branding in IT SMEs in Finland. The process of justifying research method, data collection procedure, data analysis and validity and reliability of the re search are discussed within this chapter. Chapter 6 presents the empirical findings of the research collected from the questionnaire. The data analysis process is then facilitated by utilising various forms of statistics. Chapter 7 concentrates on the discussion of statistical data from the previous chapter and aims at answering the research questions. In the end, chapter 8 delivers the conclusion of the research and provides limitation of the current study as well as suggestions for future research.


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6 2 EMPLOYER BRANDING AS AN INTERSECTION OF MARKETING AND HUMAN RESOURCE MANAGEMENT 2.1 Marketing 2.1.1 Brand, Branding and Brand Equity The understanding of Employer Branding, the main topic of this research, requires in depth un derstanding of the subjects of brand, branding and brand equity. As the study progressed, the relationships of those fundamental subjects will be further discussed. According to American Marketing Association (Aurand et al. 2005) and Keller (2008), a brand is a consequence of creating a new name, logo, symbol, design or a combination of them for a new product. A brand is structured by brand attributes, which differentiate one brand from another brand. The establishment of a brand would generate the values of awareness, reputation and prominence in the marketplace. The objective of those elements is to identify the goods and services and to distinguish them from the competitors. Aaker (1991) further points out that a brand would protect the product from being identically produced by the competitors. Wheeler (2013), however, defines brand in a more simple word: within the abundance of choices in the market, a brand should be highlighted as an emotional connection that creates lifelong relationships with customers. The success of a brand depends vastly on how customers perceived it and the affection they have for it. The success of a brand is achieved through a disciplined process that involves building brand awareness and extending customer loyalty. This process re TXLUHV VPURQJ RPPLPPHQP IURP POH RPSMQ\n V OHMGHUVB )XUPOHUPRUH branding is about giving reasons for customer why they should choose this brand instead of another one. Thus, leveraging branding is a prerequisite to success in branding. Apart from the value of the product or service, the brand of that product or service has a com mercial value itself. This value is derived from the perception of consumers using the product of POMP NUMQGB HQ PMUNHPLQJ PHUPLQRORJ\n POH YMOXH RI M NUMQG LV RQVPUXHG MV NUMQG HTXLP\n B $MNHU (1991), a leading author in brand study, categories brand equity into five brand assets including brand loyalty, brand awareness, perceived quality, brand associations and other proprietary assets.


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