Human Resource Management

Employer BrandingAchieving Competitive Advantage

School of Business ManagementNMIMS Mumbai

March 19, 2012

Executive Summary

Brett Minchington (The Employer Brand Institute), defines employer branding as “the image of the organization as a ‘great place to work’ in the minds of current employees and key stakeholders in the external market (active and passive candidates, clients, customers and other key stakeholders).” Building a strong employer brand is a complex and continuous process that needs concentrated efforts. Only those organizations that build their employer brands around their DNA with a well-planned and structured approach ultimately succeed.

The strongest influencers of the brand image are the existing employees. Their perception and experience often translates in the workplace being deemed as a “Desirable Place to be”. The reverse also holds equally true. IT is a sector intensive on “Human Capital”. Employees in the IT sector are often well networked with people working in competitor firms, and there’s a free flow of information as far as the company policies and practices of each other’s firms are concerned. The attrition rate is amongst the highest in the IT sector, and many a times while switching companies prospective employees prefer branding of the employer over a fat paycheck.

To assess the effectiveness of Employer Branding as a tool for Competitive Advantage in I.T., we have chosen IBM and Infosys. The methodology adopted is making a questionnaire which covers the various aspects regarding Employer Branding. The HR managers serving in these two organizations were asked to respond to the questions. Attempt was made to gather as much information as possible about the various policies and practices which serve the purpose of brand building. After primary data collection, extensive information was collected from secondary sources as well.

The analysis is presented in the following pattern. Starting with Vision, Mission and the Core Values of the organization, we go on to the various strategies adopted by the organization. We also look at some special initiatives to promote Workforce Diversity and Social Responsibility. The effectiveness of all these is judged by considering Awards and Recognitions that the company has received. After individual analysis, we go on to compare the two organizations to see what differentiating motivators are in place.

From this study we conclude that effective Employer Branding Policies definitely give a competitive edge. Not only HR function, but the Core Values and the overall Corporate Strategy of the company have to be in line with this. To keep the Employee Satisfaction and Motivation levels high, companies have to come up with innovations in its Performance and Talent Management Practices.

EMPLOYER BRANDING IN THE I.T. SECTOR

“It is said that an unsatisfied customer tells ten people about his experience while an unsatisfied employee tells a hundred!”

The goal of any business is to build on its strategic capabilities (resources and competencies), to attain a competitive advantage over others. In the past, such an advantage required first and foremost focus on factors like – Capital investment, raw materials, technology, patents or licenses. Today, all these factors are no barriers to competitiveness due to their easy access. What matters is the right ‘talent’, and by all means this ‘talent’ is scarce, difficult to obtain and even more difficult to retain!

I. EMPLOYER BRANDING – ‘Creating a competitive advantage’

In a knowledge-based domain like the Information Technology, competition actually takes place over one key issue: the talent of those involved in the business and engaged in the company’s success. It is thus important to attract, attain and retain such valuable human talent.

Gauging Employee perception

Source: Business Today, 2011. Sample: 3500 companies, 9000 employees

Employer Branding is one important strategy to fulfil this purpose of ‘attract, attain and retain’.

There are several ways in which ‘employer branding’ can be defined: “A targeted, long-term strategy to manage the awareness and perceptions of

employees, potential employees, and related stakeholders with regards to a particular firm.”

“Applying marketing techniques to the labour market, in order to get our targets (talent) to want to come and work for us.”

“The sum of a company’s efforts to communicate to existing and prospective staff what makes it a desirable place to work and the active management of a company’s image as seen through the eyes of its associates and potential hires.”

The goal of employer branding is to create loyal customers; the customers here being the employees.

Every employer brand requires a well-defined EMPLOYEE VALUE PROPOSITION, the EVP, which serves to: define what the organization would like the most to be associated with as an employer; highlight the attributes that differentiate the organization from other employers; and clarify the ‘give and get’ of the employment.

Employer Branding has a lot to do with creating expectations, in potential employees, about what it is like to work for a specific organization, but it also has a lot to do with the experience and perception of those same employees once they have joined.

MAPPING THE TWO SIDES OF EMPLOYER BRANDING

The key lies in managing to set this virtuous circle of internal and external initiatives in motion.Employee satisfaction will have an external impact which, together with the effect of other marketing tools will contribute to creating a “public image”, an employer brand. This, in turn, and in combination with public recognition, will make employees feel a stronger sense of belonging.

II. ASSESSING EMPLOYER BRANDING IN I.T.

IBM and Infosys are two key players in the I.T. sector that have adopted innovative techniques to build their brand image. The focus of the rest of the document is to gauge the effectiveness of ‘employer branding’ as a tool for competitive advantage in these two organizations.

METHODOLOGY

1. Developed a questionnaire for the executives of the companies in question, aligned with the theme ‘Employer Branding’ (Exhibit 1)

2. Based on the responses and secondary data (check sources/references at the end of the report), analyzed the employer branding strategies and tools adopted by the 2 companies

3. Assessed the effectiveness of the strategies with respect to the business goals of the organization

4. Briefly compared competitor strategies and the challenges/opportunities ahead

International Business Machines Corporation or IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States.

Vision Statement - Solutions for a small planet

Mission Statement - At IBM, we strive to lead in the invention, development and manufacture of the industry's most advanced information technologies, including computer systems, software, storage systems and microelectronics. We translate these advanced technologies into value for our customers through our professional solutions, services and consulting businesses worldwide.

IBM is a global technology and innovation company. With operations in over 170 countries, IBMers around the world invent and integrate hardware, software and services to help forward-thinking enterprises, institutions and people everywhere succeed in building a smarter planet.

IBM has been present in India since 1992. IBM India's solutions and services span all major industries including financial services, healthcare, government, automotive, telecommunications and education, among others.

IBM has a presence in over 200 cities and towns across the country - either directly or through its strong business partner network. IBM India has clearly established itself as one of the leaders in the Indian Information Technology (IT) Industry - and continues to transform itself to align with global markets and geographies to grow this leadership position. Widely recognised as an employer of choice, IBM holds numerous awards for its industry-leading employment practices and policies. At present IBM employs over 70000 people in India.

Core values of IBM are: Dedication to every client’s success. Innovation that matters – for our company and for the world. Trust and personal responsibility in all relationships.

EMPLOYER BRANDING IN IBM INDIA

Based on a survey Questionnaire (Exhibit 1) floated to Jesu Mathews and Sahana Nagaraj (Exhibit 2) and secondary data sources, it is clear that IBM has built its employer branding techniques in alignment with the following broad features.

1. EMPLOYER BRANDING USING HR STRATEGY

At IBM, the employer brand is developed through a robust HR strategy, rather than a separate exercise of branding. This is well reflected through the recruitment, selection and development procedure adopted by IBM. The idea is to keep enhancing the IBM brand, by enhancing the employee experience at each step.

For a new recruit or an experienced professional, performance based opportunities and a value-driven culture of work keeps satisfaction levels high. On an average, every IBM employee takes advantage of more than 60 hours of training a year.

IBM offers competitive benefits, as well as an industry-leading practice of performance-based bonuses for all employees. What also acts as a USP for IBM is the opportunity to give back to the global community through the community service initiatives, well incorporated in the HR module. A detailed analysis is taken up in the subsequent points.

2. A VALUE –DRIVEN WORK CULTURE

IBM Values

"IBM has reinvented itself many times. But through it all, its DNA, its soul remained intact... IBM's most important innovation wasn't a technology or management system. Its revolutionary idea was to define and run a company by a set of strongly held beliefs."

- Sam Palmisano, IBM Chairman & CEO

These values were framed by the IBMers themselves. Through "Values-Jam," an unprecedented 72-hour discussion on IBM's global intranet, IBMers came together to define the essence of the company.

This unique way of formulating values, gives a potential recruit and the present IBMer the belief of autonomy and flexibility at work. IBM has built itself as a sought after brand by setting in place a mechanism of employee engagement and giving the employee a sense of belongingness and freedom, both at the same time!

3. SOCIAL RESPONSIBILITY

IBM values community development, and as an IBMer one is well acquainted with this responsibility. This community building exercise is termed as ‘The Network of Hope’, a corporate and citizenship initiative.

IBM’s unique leadership programme, the Corporate Service Corps is giving opportunities to IBMers in India a chance to volunteer their time in over 350 organizations in an effort to bring about social change that matter. These volunteers call themselves ‘Desi Corps’ and are proud on being ‘a tribe for community development in India’!

The enrollment process is through the intranet and with the option of choosing an area of volunteering of one’s choice; IBM has given its employees an opportunity to extend support in matters close to the heart.

What is appealing to the employee is also that IBM strives to provide ‘Smart solutions’ to the community issues, rather than mundane volunteering. The idea is to work towards a ‘smarter planet through smart solutions’.

4. DIVERSITY INITIATIVES

IBM has consciously sought to recruit diverse talent. In India, certain key facts include:

IBM firmly believes in diversity with equality. This is well reflected by the equal opportunity statement

IBM equal opportunity statementIBM is committed to creating a diverse environment and is proud to be an equal opportunity employer. All qualified applicants will receive consideration for employment without regard to race, color, religion, gender, gender identity or expression, sexual orientation, national origin, genetics, disability, age, or veteran status.

Initiatives for the women employees

Initiatives for people with disabilities (PwD)

5. LEADERSHIP BUILDING

“We strive to make sure that IBM is seen as the best choice for people with talent to develop themselves and their careers. Having IBM on your CV not only shows you have worked for a blue-chip company that is a recognised leader in its field, but also that you will have had world-class training and development.”

The quality of leadership and development at IBM attracts people who are both the most talented and who have the highest expectations of what the company does to nurture them.

The components of the IBM approach to leadership and development are people management and a competency-led philosophy.

EXPERTS SPEAK @IBM

Two people with different backgrounds would go through the same training in their first two years. They will be rotated round a number of different assignments, to find out what kinds of roles really suit them. This is then followed by two years or so working in a regular business area where training is related to the areas that they may ultimately want to develop into.

“We see the leadership development focus as being fundamentally about people management”

“Even if someone is in a technical role which does not have management responsibility, the chances are that he or she will have to engage with people and informally influence them.”

The second stage of development is known as Leadership Foundation. This is the first formal contact that the Global Leadership Development Organization has with prospective leaders. The person's manager usually identifies the individual as having leadership potential and supervises a program of work-enabled learning supported by on-line, self-paced learning.

Someone who performs well at Leadership Foundation would then be brought into a program known as Emerging Leaders. Topics are a blend of business acumen – understanding how a company achieves its financial and business growth – and personal skills, such as emotional intelligence, motivating others or team-working. 

The next stage is reached when someone takes on their first management role. Known as Basic Blue, it involves an intensive examination of a manager's strengths and weaknesses and a lot of experiential and peer-to-peer training. Once a manager has participated in Basic Blue there are then a range of development programs available which depend on the needs of the individual. At this juncture, those identified as very high potential are likely to be selected out to join the global executive resource talent pool and so become the next generation of IBM executives, but what's important for IBM is that the process is transparent.

In India the focus is more on line manager and executive development. There is also a culture of leaders developing leaders, where mentorship comes into the picture.

IBM strongly believes in the value of women employee contribution and hence has taken up recent initiatives to build women leaders.

Currently, women comprise 26 per cent of the IBM workforce in India. The company has now started two programmes -- SalesElan and TechAcme.

SalesElan, a programme for women's leadership development in sales, will be a multi-tier programme across all levels and business units. It will introduce the sales profession to relevant areas through job rotation in a structured manner. For instance, those in product development are moved to sales and encouraged to take on direct selling jobs as client-facing roles provide the necessary insight needed for leadership roles.

This is in addition to the existing Sales Eminence programme, which focuses on building basic selling skills, providing a deeper understanding of the market and business development competencies.

Another new programme, 'TechAcme', will focus on women in technical functions. Role models from within IBM and from the industry will be invited as speakers and for interactive sessions with all managers.

AWARDSMarketplace recognition

Acknowledgment of IBM's commitment and accomplishments in supporting diversity has come from a broad spectrum of organizations and publications.

Areas of recognition

General Diversity Asians

Blacks

Gay, Lesbian, Bisexual, Transgender

Hispanic/Latino

Native American Heritage

People with Disabilities

Women

Work/Life

Infosys is a global leader in the "next generation" of IT and consulting, headquartered in Electronics City, Bangalore, India.

Vision: “We will be a globally respected corporation.”

Mission: "To achieve our objectives in an environment of fairness, honesty, and courtesy towards our clients, employees, vendors and society at large."

Established in 1981, Infosys is a NASDAQ listed global consulting and IT services company with more than 145,000 employees. From a capital of US$ 250, we have grown to become a

US$ 6.825 billion (LTM Q3- FY12 revenues) company with a market capitalization of approximately US$ 30 billion.

In journey of over 29 years, they have catalyzed some of the major changes that have led to India's emergence as the global destination for software services talent. They pioneered the Global Delivery Model and became the first IT Company from India to be listed on NASDAQ. Their employee stock options program created some of India's first salaried millionaires. Infosys has a global footprint with 64 offices and 68 development centres in US, India, China, Australia, Japan, Middle East, UK, Germany, France, Switzerland, Netherlands, Poland, Canada and many other countries. Infosys and its subsidiaries have 145,088 employees as on December 31, 2011.

Values (C-LIFE): Believe that the softest pillow is a clear conscience. The values that drive us underscore our commitment to:

Client Value: To surpass client expectations consistently Leadership by Example: To set standards in our business and transactions and be an

exemplar for the industry and ourselves Integrity and Transparency: To be ethical, sincere and open in all our transactions Fairness: To be objective and transaction-oriented, and thereby earn trust and respect Excellence: To strive relentlessly, constantly improve ourselves, our teams, our

services and products to become the best

GREAT PLACE TO WORK: EMPLOYER BRANDING

Infosys was ranked among 'India's Best Companies to Work For ' in a survey by the Great Place to Work® Institute India in collaboration with The Economic Times. Infosys featured among the best companies for large organizations and corporate social responsibility.

On the basis of responses to the Questionnaire by Abhimanyu Kumar (Exhibit 2) and data from secondary sources following features emerge significant in Infosys’s brand building.

Key strategic employer branding tools:

1. LEADERSHIP BUILDNG: The Infosys Leadership Institute

So how does Infosys groom its future leaders? The Infosys Leadership Institute at the company's Mysore campus, The 162,000 square feet structure, built at the cost of Rs 41.1 crore (Rs 411 million), is where the next generation of Infosys leaders is being primed.

"The company is now in the hands of the youngsters. It is necessary to recognise the power of youth and to nurture it. We must respect youth and create opportunities for them to participate in everything. Which is why at every function, we have the youth participating. I am about the past. I am gone. They are the future," says Narayana Murthy.

There is a three-tier mentoring process at Infosys. Tier-1 of the Infosys Management Council, which consists of the company's board of directors, mentors Tier-2 leaders who in turn guide the Tier-3 group. About 45 executives are a part of the company's Tier-1 of the management council. And each of the leaders undergoes exhaustive and sustained training through the company's personal development programme (PDP).

The ILI was set up in 2001 to prepare Infosys to manage its exceptional growth; to prepare its executives to handle the external and internal business environment; and through 'thought leadership' creates better customer value. The leadership development programme at Infosys takes after similar processes followed by many global mega corps. It has been refined to suit the particular needs of Infosys and is termed as the 'nine pillars for leadership development in Infosys.'

The note prepared by the ILI faculty enumerates 'the nine pillars for leadership development' as:

1. 360 degree feedback: This is the mechanism through which the company gathers data about an individual's performance and abilities. This information is collected from co-workers, including peers, subordinates, managers and customers. Personal development plans are prepared on the basis of this feedback. Then, each of these individuals is assigned an ILI faculty member to help prepare the PDP and to follow it.

2. Development assignments: Identified high potential Infoscions are trained at various functions of the company through job rotations and cross-functional assignments. This helps employees to acquire new leadership skills outside their own areas of expertise and experience.

3. Infosys Culture workshops: These workshops are designed to fortify the Infosys culture amongst the participants, help instil better communication skills through sustained interaction

amongst themselves, and identify with the values and processes involved in leadership development.

4. Development relationships: This includes one-on-one interaction in actual on-the-job work climate and leads to better sharing of knowledge and camaraderie amongst individuals. Mentoring forms an integral part of this exercise.

5. Leadership skills training: The 'Leaders Teach Series' are workshops that the company's Tier-1 members, including Narayana Murthy and Nandan Nilekani (CEO and MD), hold to acclimatise the next rung with leadership roles and to groom them through their own rich experience.

6. Feedback intensive programmes: These are akin to 360 degree feedback, but based on formal and informal feedback from employees that an individual interacts with.

7. Systemic process learning: This helps individuals to gain an overall view of the company and its diverse and complex systems, business, operations and processes. It is a continuous process and helps improve the individual and also the systems.

8. Action learning: This exercise constitutes solving real problems in real-time conditions, but as a team.

9. Community empathy: The company stresses the need to give back to society through involvement in various developmental, educational and social causes. This programme helps nurture a social conscience amongst its leaders.

2. DIVERSITY- From a Global Perspective“Globalization, as I define it, is a paradigm about sourcing talent from where it is best available, sourcing capital from where it is cheapest, producing where it is most cost-efficient, and selling where markets are not constrained by national boundaries” by N.R. Narayana Murthy.In order to attract the most competitive talent, they offer the best diversity opportunities. They ensure that the unique advantages of every minority become a part of Infosys core values “C-LIFE” also they celebrate commonality and de-emphasize differences. Infosys recognizes and promotes this power of diversity to drive innovation.

Infosys was the first Indian IT company to establish an office for diversity and inclusivity. Today, we have employees from 83 countries. Women constitute more than 33% of our workforce.

3. ATTRACTING FEMALE EMPLOYEES

Infosys set up the Infosys Women Inclusive Network (IWIN (in 2003 to create a gender-inclusive workplace. They have support systems, facilities and policies to help women with work/life balance. The working mother can avail herself of the satellite office (office city), flex hours, part-time, and also child care sabbatical.

IWIN circle is a peer counselling network comprising senior woman managers; they provide counselling to women employees at Infosys on managing self, work, and parenting challenges. The appraisal system is also sensitive so that women returning after maternity are appraised for the work done during the prematernity months.

Infosys has no special concessions for women either at the time of recruitment or promotions. Since their core values facilitates a fair and transparent work environment in which can contribute, participate and develop freely and equitably.

4. BENEFITS FOR THE DISADVANTAGED SECTIONS OF SOCIETY

Infosys has always believed that the best way to alleviate poverty and help the socially disadvantaged is by empowering them through education.

Special Training Programs (STP) is focused on sponsoring and educating graduates from the socially disadvantaged section, and making them employable. Approximately, 42% of employees joining Infosys at entry level are from tier two and three cities. Infoscions support Akshaya Patra Foundation’s mid-day meal campaign, the world’s largest NGO school meal program. Blending nutrition with education in order to reduce the number of school dropout’s in rural India. The Foundation has set a goal of serving one billion meals to school children.

Infosys’ social contract inspires more than 130,000 employees to contribute to community welfare environment sustainability and literacy. In 2010-11 Infosys had organised several programs, enabling infoscions to give back to society.

A COMPARATIVE ANALYSIS- STRATEGIC DIFFERENTIATORS

The above analysis broadly classifies the key strategic branding tools that these I.T. giants deploy to remain at the top-of-the-mind of prospective and current employees. However, in addition to these factors, the two companies individually have strategically differentiating motivators for employees, the comparison of which is presented below.

IBM INFOSYS

More focus on attracting experienced employees; Higher tendency of lateral placements. Contractual employment is also a key feature of IBM for employees looking at transitioning roles

Targets entry-level employees, so builds on campus recruitment and collaborations

Pays a notch higher then Infosys ( comparing between Infosys services and IBM’s Global Business Services division, which requires similar skill sets)

More focus on employee engagement and non-monetary benefits, along with industry standards of compensation

IBM doesn’t have sprawling campuses but relies state of the art buildings with adequate recreational facilities, cafeterias etc.

Attracts youth by its Development centres spanning over 20-30 acres. The cultural events like DJ nights and performances and the extensive health facilities, along with a cricket ground are other lucrative features of engaging the target employees

More emphasis on 3rd party training procedures

Training programme at ILI is robust and is seen as the best knowledge sharing facility by prospective employees. The focus is also on in-house training with leaders and an internal division solely committed to the programme.

PBC(Personal Business Commitment) is a fair appraisal procedure which requires supporting documents for every contribution, and leads to good pay hikes if rated highly

iRACE (Infosys Role and Career Enhancement) focuses on the specialist approach as in someone from technical side should excel in his domain. The platform defines roles, competencies and proficiency requirements while linking career movement to performance and business focus. However many employees were of the view that this will the promotion cycles longer.

The GENO programme strives to utilize bench strength talent by giving them opportunity to work as and when a project comes up. The rating is done through ‘Blue points’ and the appraisal mechanism ensures

The MY-WORKS programme engages the bench talent and increases billing and subsequent utilization rates of the employees.

fairness and opportunity to compete with the non-bench employees

CONCLUSIONWith competition getting fierce day by day and high attrition levels have made organisations realize the importance of retaining the right talent. To achieve this, not only the HR Strategy but also the corporate level decisions and policies are aligned towards serving the ‘Internal Customers’. The organisations are focussing more and more on goals, aspirations and satisfaction of the employees. Apart from extensive emphasis Performance Management Systems and Career Development, companies are also focusing on promoting workforce diversity, work life balance and goodwill generation through CSR activities.