An exploratory study of the role of internal branding in employee attraction and retention in the Chinese manufacturing sector

Introduction Internal branding, which works as an internal marketing strategy, aims at promoting what makes a company unique and desirable for ‘attracting, motivating and retaining’ the employees (Backhaus and Tikoo 2004; Lievens 2007; Moroko and Uncles 2008). Organisations have realised that attracting and retaining the right employees can help them gain a competitive advantage in the marketplace(Berthon, Ewing et al. 2005). In the internal marketing literature, employees are treated as the internal customers and jobs are treated as internal products. Companies aim to increase employees’ satisfaction because satisfying the needs of employees will contribute to satisfy the objectives of the organisation (Berry, Hensel et al. 1976; Rafiq and Ahmed 2000; Gounaris 2006). As the importance of employees on delivering the marketing strategy has been realised, it is beneficial for organisations to recruit the right person to work and then retain them longer (Berry, Hensel et al. 1976; George 1977; George 1990; Foreman and Money 1995; Rafiq and Ahmed 2000; Gounaris 2006). . Internal branding has been identified to be helpful to attract and retain employees (Berthon, Ewing et al. 2005; Lievens 2007). Internal branding is about building a good corporate image which suggest the company a ‘great place to work’, it will also ensure that employees are aligned with the brand (Keller 2002; Berthon, Ewing et al. 2005; Ind 2007; Knox and Freeman 2010). Backhaus and Tikoo (2004) has described this brand loyalty and commitment behaviour as employee signing the psychological contract with the company, because a psychological contract is ‘promised-based…is relatively stable and durable’(Rousseau 2001). The benefits of retaining employees are that they will be more committed to their jobs and will have learned how to do their jobs better. Also, investments and a long break-in period for new employees will not be needed if the company can retain their employees long-term (Robert and Hooman 2007). Additionally, employees who have a long relationship with their company are encouraged to embrace their role as brand ambassadors to be helpful for attracting the right people when the company intends to recruit additional labour. This is achieved when employees portray the corporate image to their social world through conscious and unconscious behaviour. For example, employees may meet friends after work and their discussion about the working conditions could attract others to the company (Kennedy 1977; De Chernatony, Cottam et al. 2006; King and Grace 2010). The review of the existing literature has been used to develop a conceptual framework (Figure 1). The framework shows that building internal branding is important for attracting and retaining employees which will contribute on improving business performance.

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Figure 1. Internal branding as an important strategy to attract and retain employees Two psychological theories may provide insight on which factors help attract and retain employees. Herzberg’s Motivation-Hygiene Theory and Maslow’s Hierarchy of Needs Theory both indicate that human needs include basic physical needs and psychological needs (Maslow and Frager 1987; Herzberg, Mausner et al. 2008). More recently, Lievens (2007)’s research confirms that internal branding is a package of instrumental and symbolic attributes. Instrumental benefits correspond to the physical needs of employees while symbolic meanings correspond to the psychological need of employees. His research has indicated that both instrumental and symbolic benefits have played an important role in attracting employees (Lievens 2007). My research aims to understand what factors contribute to attracting employees and what factors employees value as important for keeping them in the company. Research Design Three research questions will be explored: 1. What role does internal branding play in attracting and retaining employees? 2. What factors potential employees consider as important when they apply for the job? 3. What factors current employees perceive as essential for staying longer? The aim of my research is to explore internal brand building inside of a company. Due to the nature of employees as individuals, each of their social life behaviour is based on personal experiences and social interactions. Hence this study will be based on an interpretive approach with understanding rather than quantifying (Denzin and Lincoln 2008). Unstructured interviews will be conducted to understand employees’ personal experiences (Langdridge 2007; Giorgi and Giorgi 2008). Most of the previous researches on internal 2

branding have been applied to service sectors, which have neglected the personal experiences of the employees in the manufacturing department. The companies participating in this research will be manufacturing companies in China. Employees work at different positions will be interviewed, including the company president, CEO, top managers, line managers and staffs from different departments. Interviews will be conducted in Mandarin as both the interviewee and I are native Mandarin speakers. To make sure interviewees are willing to share their experiences, the interviews will be conducted in a warm, friendly and informal manner. Rather than a ‘question- answer’ model, the interview process will be a conversation between the interviewees and the researcher. Encouragement will be offered in order to keep the conversation flowing naturally. Interviews will be tape recorded, transcribed and translated before analysis. The interview data will then be interpreted using the format and context outlined by Giorgi and Giorgi (2008)’s phenomenological analysis method. Themes are expecting to emerge from the analysis process which may use to shape subsequent analysis. Also, these themes could shape the researchers’ understanding for the following interview and data analysis(Giorgi and Giorgi 2008). Initial Empirical Results Eight interviews with employees from different position of different companies have been carried out so far for this study. Initial results from the eight interviews suggests that the following factors are considered by employees when they apply for a job (Table 1). These factors are divided into personal factors and environmental factors. Factors employees consider important when applying for a job Employees’ personal factors Environmental factors • Financial factors, such as salary, bonus • Organization reputation • Holidays • Expectation from others, such as family, • Living conditional, such as the distance friends, working colleagues from hometown • Personal career development • Personal network • Working environment, including company working environment and industry • Personal career development environment • Personal ethical background • Organization future development Table 1. Factors employees consider important when applying for a job The factors which are valued as important for current employees to stay in a company longer are different (Table 2). More specifically, factors employees consider importance to stay longer in the company are:

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Factors employees consider important to stay longer in the company Employees’ personal factors Environmental factors • Financial inspirations, such as bonus, • Relationship with supervisor company’s stock share • Supervisor’s leadership style • Personal conditions, including age, gender, • Organisational policy, regulations health • Organisation’s future development • Holidays • Organisation culture • Living conditional, such as whether the • Expectation of others, such as family, place is good for their children’s future friends, working colleagues education • Future development of the industry • Personal career development • Personal previous experiences Table 2. Factors employees consider important to stay longer in the company However, the salience of these factors may differ according to employees’ personal circumstances and the external environment (Table 3). More specifically, the attracting and retaining factors are different among different employees according to: Employees’ personal circumstances External environment § Employees’ position within the § Industry working conditions organisation § Organizational cultural § Personal circumstances such as § Company working environments § National cultural • Age § National working environments • Gender • Personal financial situation • Family expectations and pressure § Personal previous working experience § Personal career development plan Table 3. Employees’ personal circumstances and the external environment The research is still in the progress. Data analysis is expecting to conduct with developing the research results. The detail of the current data interpretation will be discussed and present in the doctoral colloquium. The reviews of the existing literature and the preliminary findings have been used to develop a conceptual framework for implementing an internal brand building (Figure 2).

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Figure 2: A conceptual framework for implementing internal brand building Conclusions and future steps Internal marketing literature has realised the importance of employees as internal customer for their contribution on improving company’s business performance. Hence recruiting and retaining the right employee is essential for achieving marketing objectives. Internal branding aims at attracting and retaining employees. Despite the depth of discussion about internal marketing and branding in the literature, limited consideration has been given to the application of internal branding strategy(King and Grace 2006). This research, therefore, will aim at understanding what factors can contribute to attract potential employees and what factors current employees value as important to keep them in the company, then to provide organisations a clear view on how to attract and retain the right person. The results of the eight interviews shows that both the brand’s instrumental (short-term physical) factors and symbolic (long term intangible) factors play an important role in attracting and maintain employees. However, the salience of these factors may differ according to employees’ personal circumstances and the external environment. Further data analysis is expected to conduct to identify how the instrumental and symbolic factors contribute to employee attraction and retention. Hence, future steps of the research include firstly continuing fieldwork to further explore the internal brand building process. More themes and factors are expected to emerge as the research progresses. Secondly, analysing the transcribed interview by following a phenomenology method. Third, one potential area which may be explored is comparing employees from state-own companies versus private companies. One interview with a state-own company employee has finished, the initial result shows that she has different perception on the job attraction and retaining with employees from the private company. This may due to the different nature of the two companies, also it may be due to the employee’s personal circumstance.

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