Employer branding has a number of positive influences on an organization’s brand profile, attractiveness and viability. This book sets out clearly and concisely the sort of organizational policies and employer practices that must be in place in order to create a good workplace for employees, and to ensure that the right people will want to join and stay with the organization. Employees may not be our employees forever, but they might become ours forever, provided we have a strategy to manage alumni relationships. Alumnis are ambassadors of our brand and our values – also after they finished working for our organization.
Employer Branding Guidelines, Worktools and Best Practices
Great employees – and strategies to attract, keep and recruit the right talent for the organization – will be a defining characteristic of the competitive landscape in years to come. To build a sustainable employer brand, attention must be paid to the mechanisms that create an attractive workplace, regardless of the state of the economy. The need for recruitment may vary over time, but the employer brand can never be neglected. Like a consumer brand, the employer brand can only be built on the foundations of a long-term strategy. Moreover, consumer and employer brands overlap both in people’s expectations and in the signals that the organization sends to the market. This book pinpoints a number of topics that organizations need to consider to be able to stay competitive in the future. Based on multinational research and experience, Anders Parment and Anna Dyhre give you the background, models and tools necessary to develop a strong, consistent and sustainable employer brand.
Sustainable Employer Branding
Employer branding emphasizes the need for taking the employment function very seriously – regardless of whether it’s a highly ranked organization or an organization with a weak consumer brand, poor location, and a high percentage of short-term hires. Every employer has an employer brand no matter of size, location or structure, but many organizations lack a strategy to deal with employer branding.
Sustainable
A N D E R S PA R M E N T & A N N A D Y H R E
ines, l e d i Gu tools k r o W est and B es ic Pract
Sustainable
Employer Branding Guidelines, Worktools and Best Practices
Anders Parment, Ph. D., is a research follow at Stockholm University School of Business with main focus on employer branding, market communication and how young people particularly relate to consumption, brands and the labour market. Anders is a well-known speaker and strategy consultant and has published several books and articles on a variety of topics. Anna Dyhre, Master of Law, is Country Manager for Sweden at the global employer branding company Universum and has worked within the field of employer branding for several years. Anna is a specialist in analyzing what makes an organization an attractive employer and how young academics relate to their future employers. Anna is a well-known speaker and has published articles within the field of employer branding.
A N D E R S PA R M E N T & A N N A D Y H R E
Best.nr 47-09051-8
Tryck.nr 47-09051-8-00
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09-03-24 15.57.52
Sustainable Employer Branding ISBN 978-91-47-09051-8 © The authors and Liber AB Publisher’s editor: Ola Håkansson and Carina Blohmé Design: Fredrik Elvander Typeset: LundaText AB 1:1 Printing: Elanders 2009
All rights reserved No part of this publication may be reproduced, stored in a retrival system, or transmitted, in any form or by any means, electronic, mechanical, photo-copying, recording, or otherwise, without the prior written permission of the publisher.
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Preface In the last decade, employer branding has gained a strong foothold in the strategic priorities of leading organizations. In the best case, employer branding has moved from being another buzzword to something people understand is really important. In some cases, however, employer branding is not taken seriously. No matter what you think about employer branding and what your current relationship to the concept of employer branding is, we hope this book will be of great interest to you. Books are written for several different reasons. In emergent areas like employer branding, books may be written to introduce the subject to a broader audience, thus having a missionary purpose. In more mature areas, books may be written to conclude the state of the art of the field, to add new insights or to summarize recent insights that challenge the current thinking on the subject. Our intention is that this book will be of great interest both to those who are familiar with employer branding and those who are not. We want it to be inspiring and helpful to managers, HR people and others who work with employer branding strategies, but we also want to contribute to the definition of the employer branding concept and how it can be understood, thus being a source of knowledge for students and researchers. Best practice from a multitude of different industries and contexts will be presented to inspire you in creating and maintaining a sustainable employer brand. We hope you will enjoy the reading. We are especially greatful to people who answered our questions, filled in surveys, took time to participate in interviews, helped us with material and a lot more. And, of course, we are responsible for the content of this book. Thanks to our children for inspiration and distraction! Stockholm, February 2009 Anders Parment & Anna Dyhre 3
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Contents Preface..........................................................................................
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1. Global Trends: Increased Focus on – and Need for – Employer Branding............................................................ Top Talent or Right Talent?.................................................... Why Employer Branding?...................................................... Changes in the Labour Market.............................................. Employer Branding is Good for Society............................... Employer Branding is Good for Employees.......................... The New Workforce Generation Will Make a Difference..... Demanding – and Inexperienced ...................................... … New Times – New Career Strategies...................................... Decreasing Loyalty: Working as Consumption.................... High Awareness of Career Patterns: Ambitions and Flexibility......................................................................... Paradoxes................................................................................ Employer Brand, Culture and Workplace More Important than Work Assignments............................. Generation Yers Work Life Philosophy................................. HRs Key Role in Integrating Employer Branding................. Employer Branding in Good and Bad Times........................ Strategies to Maintain Attractiveness During Poor Times A Transparent World.............................................................. Employer Branding in the Non-Profit Sector....................... Summary – the Individual in the Driver Seat.......................
36 37 40 45 48 50 53 54
2.
55 56 81 81
The Logic Behind Employer Branding................................ The Employer Branding Process........................................... Measuring the Employer Brand Attractiveness.................... The Recruitment Funnel........................................................
7 11 13 15 20 22 24 26 28 29 32 35
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Con te n t s
3. Attracting and Recruiting the Best Employees.................. 84 Attracting the Right People – What Characterizes an Attractive Employer?......................................................... 86 Corporate Identity as Foundation of an Attractive Workplace............................................................................... 89 Increasing Demands on the Workplace................................. 90 Critical Success Factors in Creating an Employer of Choice 91 Recruiting the Right Employees............................................ 96 Recruiting the Right People Builds a Sustainable Employer Brand..................................................................... 98 The HR Department Must be a Strategic Priority................ 102 People Who Don’t Get the Job?............................................. 103 4.
Keeping the Best Employees................................................. Keeping Employees in a World of Opportunities................. Benefits in Competitive Labour Markets.............................. Is There Room for Self-Fulfilment in Our Organization?.... Make Internal Career Patterns Clear..................................... Hub of Sieving – the Organization, the Market or the Employee?......................................................................... Employee Satisfaction Index.................................................. Why People Move On............................................................ Finally, Most Employees Leave: Nice Exit............................. Reward Systems...................................................................... Personnel Turnover – Principle and Practice........................ Bridging the Generation Gap................................................ Alumnis...................................................................................
5. Communicate the Employer Brand..................................... Building a Sustainable Employer Brand................................ Consistency as the Foundation of a Successful Employer Brand..................................................................... Make Your Competitive Advantage Really Unique...............
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106 107 108 109 112 114 115 116 118 119 122 124 126 129 130 131 134
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Scope of Employer Branding................................................. A Strong Employer Brand Reflects an Attractive  Organization........................................................................... Talking is Easy: Deliver What You Promise........................... Filling Vacancies or Finding the Right People?..................... People Make the Difference................................................... The Employer Brand and the Consumer Brand................... Communicating the Employer Brand................................... Communication at an Early Stage: Students as Target Group........................................................................... Taking it Further – the University Classroom....................... Communication Effectiveness............................................... Measuring the Effort..............................................................
135 137 138 139 140 142 145 147 151 153 154
References.................................................................................... 159 Endnotes...................................................................................... 165 Index............................................................................................. 170
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Chapter 1: Global Trends: Increased Focus on – and Need for – Employer Branding
The aim of this book is to give a comprehensive introduction to the field of employer branding, thus giving a practical guideline, in which best practice is communicated in an easyto-grasp manner. All organizations need to consider employer branding. However, every organization is unique and the extent, scope and emphasis of employer branding does and should vary across organizations. The need for recruiting varies from time to time, and organizations have different qualifications and resources available. However, the need to establish thought-through and effective employer branding strategies and practices that are consistent over time has never been stronger than in today’s fickle labour market environment. As the world is undergoing a recession, this is a great opportunity to change and develop a sustainable employer brand that makes the organization attractive both now and in the future. This first chapter will give an introduction and background to changes in the labour market. With a new generation of employees, the job market will in effect increasingly 7
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function as a market. The best talents will get the best jobs, and the best employers will get the best talents. Understanding the new workforce generation will be crucial to creating sustainable employer branding. The new workforce generation is high-maintenance and high-performance, and if you only see the one side, you will not be able to recruit and keep them. No matter in which industry you are operating, the need for qualified employees has increased most definitely in the past few decades and will continue to do so also in the future.
8
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Talent is likely to be the main differentiating factor in the future, and it is fundamentally intertwined with the organization’s image, competitive strategy and competitive position. A great company with a strong brand, happy customers and a strong competitive advantage is likely to be a good workplace, and it is likely to be even more so in the future: as the world becomes more transparent, and the labour market and the consumer market become more similar, it becomes increasingly difficult for companies to stay competitive in consumer markets unless they are attractive to employees. “Employing the most talented people has to be the most important thing that you are asked to do. Do it better than the competition and you can conquer the world. Do it worse and the best you can ever hope for is a second place.” (Glyn House, Chartered Institute of Personnel & Development, 2007)
In a speech at Harvard University in 1943, Winston Churchill suggested that “the empires of the future will be empires of the mind”.1 Not a bad way of making forecasts about the future. To an increasing extent, talent, values, culture, brands and other immaterial factors play a key role in creating competitiveness. In the old days, workers moved to get a job, but now, companies increasingly move to where the creative people are and want to be. Szita discusses the creative class – people working with science, technology, and marketing – which constitutes about 30 percent of the workforce in the US, compared to 5 percent in the 1950s.2 However, this development doesn’t mean we don’t need the traditional, material resources anymore. The old battle for natural resources is still with us, and the competition between nations, philosophies and methods in terms of which material to use in products, choice of fuel in vehicles, trade-off between blue-collar workers and machines 9
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etc. goes on. However, competition is becoming increasingly global, the development of communication technologies have made the world more transparent, and there are an increasing number of interests to take into consideration to stay competitive: political, ecological, ethical, financial – and organizations are expected to take care of their employees and be good corporate citizens. CSR (Corporate Social Responsibility) is one among many recent demands and expectations on organizations. The more dimensions and demands to consider, the more information and knowledge that is available and the tougher the competition, the more important it is to have talented people running organizations. Organizations need to recruit talented people who fit the values of their employer, its values, culture and image. Only by doing this can the organization develop its competitiveness and transform routines, policies and attitudes to make the organization fit for meeting the expectations of today’s and tomorrow’s demanding customers.
This development embraces society overall, and has important implications for most industries, employers, countries and jobs. Examples are numerous. The old distinction between blue-collar and white-collar workers becomes blurred. Car mechanics to an increasing extent now need advanced computer skills for trouble shooting, and they must be able to discuss the often costly repairs with increasingly demanding customers. An elevator repairer was once a job with a lot of freedom and little surveillance and control exercised by the office management. However, with new GPS technology, advanced repair equipment and a heavy pressure on efficiency and profitability, the situation has changed. After having implemented new systems, about half the old workforce decided 10
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to leave their employment at a major elevator manufacturer’s aftersales service department: efficiency improved by 50 to 100 percent.3 Blue-collar workers are increasingly inclined to change job as their competence level increases, and they get better paid as the employer becomes more dependent upon them.
Top Talent or Right Talent? ”The difference between a good and a great company is usually the talent level.”4
This book is about employer branding and how it can be used to apply tools and experiences that fit your organization. Thus, it’s not only a book about what has often been denoted top talents, but at least as much about who is the right talent for your organization. What is a right talent varies according to context and situation. In the public sector, the skill to follow principles of public organizations, e.g. treating everybody equally and at the same time being customer-oriented and good at explaining tricky trade-offs between what the public services include and what the citizen wants, may be critical. A salesman should not only be good at selling, but also understand the principles of value-based pricing, as well as have good relations to product development, conceptual development and engineers. Modern, complex, customized products are not easy to sell, and salesmen don’t always understand the engineering side which causes a lot of frustration between different parts of the organization. On the other hand, there may be engineers, HR departments and architects who lack the market orientation that is necessary to satisfy demands on profitability and customer satisfaction. Top talents with good grades from top uni11
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versities but the wrong attitude, lack of customer orientation and difficulties in making trade-offs between different interests and demands, may find it increasingly difficult to make consistent career progress. On the other hand, people lacking formal qualifications but with good abilities to cooperate, understand customers and combine existing knowledge to find new solutions, are likely to have success in the future. Characteristics that gave success in the past, may not result in success in the future. “Talented people need organisations less than organisations need talented people.”5
Based on a presumption that they need to attract the top students and the most demanded young professionals, many organizations worry about their potential of becoming an employer of choice. However, what is the “best talent” varies according to industry, work tasks, country, culture and situation. The ambiguity of the concept “best talent” further emphasizes the need for employer branding: if we do not put enough effort into defining what the best employee for us looks like, we may overpay the wrong people, who might be the best employees in another context, but not for us. People who feel they are not in the right place are likely to be less happy with their work situation and as an effect also deliver less. A first step in trying to find the right people for you is to understand the target group. Just as in any marketing situation, knowing the characteristics of the group of people one is trying to reach is crucial to the ability to reach people in an intelligent and efficient way. An attractive organization that knows its identity, and understands the new workforce generation has a good chance to stay successful in the future. 12
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“They definitely have an unprecedented ability to connect: we usually just need to host a welcome drink on their first evening and by midnight they are best Facebook friends, whether they are from Mexico, Tokyo, London, Berlin, Shanghai or Cape Town. And for this generation, indeed, the notion of geographical clusters is definitely irrelevant: they grew up with the Internet, they connect with it, they listen to the same music, are animated by the same brands and more and more students are taking part in international exchanges.”6
According to an article that has aroused a lot of attention – “The battle for brainpower” by Adrian Woolridge – in The Economist, talent will be a scarce resource in the future. In the article, a number of intersting trends are pinpointed: intangible assets in the US shot up from 20 percent of company values among the S&P 500 companies in 1980 to about 70 percent in the year 2006. The number of tactical jobs, which is the most qualified type in a categorization made by McKinsey, has incraeased 2.5 to 3 times as fast as less qualified jobs. At the same time, changing demographics makes it increasingly difficult to find the talents organizations need. The ongoing changes are shifting the balance of power from organizations to the workforce.7
Why Employer Branding? Employer branding is extremely important for the success of most organizations. Think of a successful organization you know; you will probably arrive at the conclusion that it is successful at least partly because of the organization’s employees. Successful organizations are likely to understand the mechanisms of employer branding, and because of their attractiveness, they can hire qualified people at a reasonable or even low 13
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cost. Great organizations pay less and get more skilled employees. With successful employer branding, the organization is likely to benefit from less absenteeism, better retention levels, greater staff satisfaction and engagement, and higher profitability. A more globalized economy, faster communication, new vehicles for dispersing knowledge and substantial demographic change makes it necessary for every organization – they may be multinational companies, small and medium enterprises, public organizations or NGOs (Non-Governmental Organization) – to focus on branding, both in relation to the labour market and to the consumer market. With the enormous amount of information and opportunities that are available, modern citizens need effective tools to make the right decisions – that’s why attractive brands have become increasingly important and there are no signs that this will change in the future. The more global the world, the more opportunities there are and the faster the pace of change, the more important for the individual organization to have a strong and attractive brand. A strong brand has been described as “the glue that holds the organization together” – and strong organization culture and good leadership does the same.8 Employer branding includes all these areas. “Only in the past three years has the concept taken off. You can see that trend on Google. In 2004, if you Googled ‘employer branding’ you got 3,300 pages. By 2006, the count had risen to 317,000.”9 (Today, in 2009, you get at least 1,300,000 hits within 0,37 seconds …)
To an increasing extent, organizations of all sizes, including public organizations, hospitals, universities, churches and political parties, are paying attention to employer branding. 14
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There are a number of strong reasons why employer branding and its impact on attracting talent is so important today. • An increasing percentage of jobs are white-collar, strategic, immaterial jobs with difficult trade-offs, complex decisions to make and lack of time and supervision. You can hardly manage those jobs without talent. There are so many demands on organizations today: effectiveness, shareholders, environmental considerations, work environment, efficiency, branding, rankings, quality issues, just to mention a few, and the competition is often fierce both within the industry and from substitute products that emerge at short notice. • Increased demands on social skills, emotional intelligence, customer orientation and a “market-oriented approach” in the way people talk about their own organization. Regardless of whether the individual is working with product development, quality management, investor relations, manu facturing, machinery maintenance, housing, or handling tax issues, a balanced approach with an understanding of how different parts of the organization contribute to the organization’s shared effort is necessary. • Younger professionals particularly are active CV builders and started planning their career very early. They really know what they want and put demands on employers.
Changes in the Labour Market There are more significant changes that come with this new generation that will make a clear change in the labour market:10 • Authorities, which are by tradition strong and influential, may lose substantially in influence. Young people only give 15
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• •
•
•
•
•
•
credence to people who they see as competent, not only because they have a title. To an increasing extent, work is seen as something you do for self-fulfilment, not as a right or duty. Fast communication, increased transparency and good skills in dealing with opportunities, choices and information overload means more insight and power to employees. This generation is used to a high living-standard – in most cases they have grown up with a great deal of what their parents strived for: vacations, clothing and money to go out and have some fun. They go beyond the functional aspects of everyday life and strive for emotional and immaterial experiences, both as consumers and as employees. Identity, image and social networks are to an increasing extent directing communication and individuals’ choices. Communities like Facebook contribute to this development. Loyalty is decreasing and it becomes increasingly difficult to track patterns of how people make choices as citizens, consumers and workers. The labour market now shares many characteristics with consumer markets and how modern individuals relate to brands; choosing an employer (if there is a choice) is not a once-upon a lifetime decision, nor something you do every ten years. This generation will change jobs much more often than earlier generations. People are becoming more individualistic and achievement-oriented – but not necessarily more egoistic (as many people would suggest).
The retirement of the baby boomer generation (born during the post-war baby boom, between 1946 and the early 1960s) 16
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and the emergence of Generation Y (see p. 25) will entail substantial changes in the way work needs to be planned, organized and executed. This means that the traditional way of doing things – organized by the baby boomers or their predecessors – may not work any more. Changing ways of doing work, divergent attitudes of older and younger employees and a general pressure on organizations to be effective, smooth and customer-oriented, may result in a fierce generational clash. The younger people are, the more global they are likely to be in their mindsets. Younger people have grown up in a world with technologies available to communicate across cultural borders easily and efficiently. The emergence of the Internet, non-domestic television channels and cheap travel play an important role in shaping an international mindset. But there is something more that is happening in the business world, and which is a strong driving force in the globalization of people’s mindsets. Many industries have experienced strong consolidation in terms of ownership, and big international companies have merged and grown, both at the manufacturer level11 and at the retail level12, brands have become more global and global brands have gained increased market shares in many markets. Globalization has thus made employees in different parts of the world more similar to each other. “Even if the national, political and economic backgrounds of these ‘Yers’ are very different, it is surprising to see how core similarities can be observed throughout the world, within any graduate population.”13
There are a number of substantial changes in today’s labour market. The following changes put further pressure on organizations to work with talent relationships and become modern, updated and attractive employers. 17
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• More flexible working hours, to an increasing extent, employees show up late in the office but work at home, they take one or a few days off, but work during weekends and holidays, they combine business travel with vacation and we see a big change in the attitude towards the work-leisure time interface, particularly in more qualified jobs. • Slimmed organizations call for more effective working methods, and less time spent in physical meetings. If the old logic say; we should go for a senior consultant with 15 years experience in this project, the new logic may say; the junior consultant is good enough or has other qualities. • Tradition. The old logic says; there should be a meeting every Thursday morning – and everyone should be there, because that’s how it has always been done. The new logic says; we have a meeting when we need to – we expect you to consider being there, but if you are with a customer, that’s even better. • New family structures with fewer traditional families with two parents and a number of children. Women are becoming increasingly powerful in the labour market which implies that men need – and, in most cases, want, to take more responsibility in family life. This change has important implications for employers. Male co-workers with three children at home can’t be expected to work late hours three or four days a week. However, new technology makes it possible to work from home during the night or weekend. This change differs from country to country, but the tendency is there in most countries. And in many instances, new family structures contribute to conflicts between generations. • Shorter working life. We invest more and more time in education but we don’t necessarily retire later. During the remaining working years, there is more pressure to perform 18
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well and more intensively, and individuals are forced to collect their life income in a shorter time period. As people live longer and expect to have more active years as seniors, they need to earn more money in a shorter time period. Moreover, today’s seniors need a lot of money as they are used to high living standards, they are healthy and according to a number of studies, this “grey market” is expected to grow substantially in the future.14 • Customers evaluate co-workers. One dimension of the increased transparency is that customers to an increasing extent evaluate the work done by co-workers. In the old days, there was less openness in this respect and voting with the feet was the consequence of dissatisfaction – the customer may have made complaints but these were not as clearly addressed to the employee so without the knowledge and feedback created by customer evaluation linked to the employee, customers were lost. • State and government attitudes, responsibility and intervention level have changed in many countries, which has important implications for working life. Individuals are expected to take more responsibility for their careers. A good education at a state university is no longer a guarantee for getting a good job, and the philosophy of state school systems over time has undergone a transition from providing knowledge in core subjects like language training, mathematics etc. and making people good citizens to helping people finding strategies to develop learning themselves. Earlier, people were provided with knowledge. The change puts increased pressure on people to take responsibility for their own careers and personal development. • Unions have shifted their focus to helping members develop working life based on the changed conditions instead of maintaining the status quo. 19
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Employer branding has a number of positive influences on an organization’s brand profile, attractiveness and viability. This book sets out clearly and concisely the sort of organizational policies and employer practices that must be in place in order to create a good workplace for employees, and to ensure that the right people will want to join and stay with the organization. Employees may not be our employees forever, but they might become ours forever, provided we have a strategy to manage alumni relationships. Alumnis are ambassadors of our brand and our values – also after they finished working for our organization.
Employer Branding Guidelines, Worktools and Best Practices
Great employees – and strategies to attract, keep and recruit the right talent for the organization – will be a defining characteristic of the competitive landscape in years to come. To build a sustainable employer brand, attention must be paid to the mechanisms that create an attractive workplace, regardless of the state of the economy. The need for recruitment may vary over time, but the employer brand can never be neglected. Like a consumer brand, the employer brand can only be built on the foundations of a long-term strategy. Moreover, consumer and employer brands overlap both in people’s expectations and in the signals that the organization sends to the market. This book pinpoints a number of topics that organizations need to consider to be able to stay competitive in the future. Based on multinational research and experience, Anders Parment and Anna Dyhre give you the background, models and tools necessary to develop a strong, consistent and sustainable employer brand.
Sustainable Employer Branding
Employer branding emphasizes the need for taking the employment function very seriously – regardless of whether it’s a highly ranked organization or an organization with a weak consumer brand, poor location, and a high percentage of short-term hires. Every employer has an employer brand no matter of size, location or structure, but many organizations lack a strategy to deal with employer branding.
Sustainable
A N D E R S PA R M E N T & A N N A D Y H R E
ines, l e d i Gu tools k r o W est and B es ic Pract
Sustainable
Employer Branding Guidelines, Worktools and Best Practices
Anders Parment, Ph. D., is a research follow at Stockholm University School of Business with main focus on employer branding, market communication and how young people particularly relate to consumption, brands and the labour market. Anders is a well-known speaker and strategy consultant and has published several books and articles on a variety of topics. Anna Dyhre, Master of Law, is Country Manager for Sweden at the global employer branding company Universum and has worked within the field of employer branding for several years. Anna is a specialist in analyzing what makes an organization an attractive employer and how young academics relate to their future employers. Anna is a well-known speaker and has published articles within the field of employer branding.
A N D E R S PA R M E N T & A N N A D Y H R E
Best.nr 47-09051-8
Tryck.nr 47-09051-8-00
Employer - omslag.indd 1
09-03-24 15.57.52