‘Living the Brand’ : A Qualitative Study on how Swedish Startups should Implement Employer Branding to the Core of their Business to Attract and Retain Top Talent

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‘Living the Brand’

BACHELOR DEGREE

THESIS WITHIN: Business Administration NUMBER OF CREDITS: 15

PROGRAMME OF STUDY: International Management & Marketing Management AUTHOR: Frida Svedberg Isaksson

Lovisa Karlsson Marielle Kaminsky

JÖNKÖPING May 2020

A Qualitative Study on how Swedish Startups should

Implement Employer Branding to the Core of their Business

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Acknowledgments

he authors would hereby like to express their sincere gratitude towards those who have been involved in the development of this study. We truly appreciate their time, motivation and guidance, which allowed us to conduct this research.

First of all, we want to acknowledge our tutor Katrine Sonnenschein, who throughout this entire process, has guided and provided us with the support needed to complete this thesis. Her previous experiences and knowledge in academic writing has been highly valuable for us when receiving feedback and insights. We would also like to recognize the valuable support from our seminar opposition group throughout this process.

Further, we would like to continue by thanking all of the experts for participating in this study, who took their time to share their expertise and insights, allowing us to collect rich data. Without their participation and contribution, this study would not have resulted in the thesis you are presently reading.

Frida Svedberg Isaksson Lovisa Karlsson Marielle Kaminsky

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Bachelor Thesis in Business Administration

Title: ‘Living the Brand’ A Qualitative Study on how Swedish Startups should Implement

Employer Branding to the Core of their Business to Attract and Retain Top Talent

Authors: Frida Svedberg Isaksson, Lovisa Karlsson, Marielle Kaminsky

Tutor: Katrine Sonnenschein

Date: May 2020

Key terms: Employer Branding; Startups; Entrepreneurs; Attraction; Retention; Top Talent

Abstract

Background: In today’s talent-driven marketplace, money is no longer a top priority. Instead,

it is a company’s reputation - its employer brand - that speaks volumes to the current and potential workforce. A business with a strong employer brand that recognizes the needs of its target group will better achieve differentiation and sustain a competitive position in the labor market. Hence, this study aims to investigate employer brand in a startup context.

Problem: Low organizational awareness, high levels of uncertainty, and limited public

recognition are some of the significant competitive disadvantages that startups face when expanding their business. There is limited research on employer branding within startups, yet one of the major challenges for startups is to attract and retain talented employees.

Purpose: This study sought to create an understanding of how startups should implement

employer branding to attract and retain top talents. Simultaneously, the authors aimed to fill the research gap while at the same time, contribute to the existing body of literature.

Method: To answer the research question and fulfill the purpose of this study, a qualitative

research approach was applied. Five experts of employer branding were interviewed through semi-structured interviews in order to gather empirical data. The collected data was later analyzed with a thematic analysis process in six different steps.

Results: The findings of this research highlighted the importance for startups to implement

employer branding in the initial stage when developing their business. Attributes of an employer brand should be unique, distinctive, and true to allow for attraction and retention. If the implementation is done accurately, startups will successfully compete with already established companies in the war for talent.

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1. Introduction

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This chapter presents the chosen research topic of employer branding within startups. This is followed by a problem discussion, the purpose, and the research question. Additionally, delimitations are presented.

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1.1 Background

Why are people working for Patagonia allowed to take a day off to surf when the waves are good? (Anderson, 2019). Why does Google receive over 3 million job applications per year, when the chance of getting employed is as low as 0.2%? (Nisen, 2014). The answer to these questions is that both companies have succeeded in building a strong employer brand that both attracts top candidates and offers their employees a unique employee value proposition.

Employer branding is a relatively new concept, its usage, and its importance has increased significantly in recent years (Berthon, Ewing, & Hah, 2005; Bonaiuto, De Dominicis, Illia, Rodríguez-cánovas, & Lizzani, 2013; Urbancová & Hudáková, 2017). The concept adopts a brand marketing approach to create a unique employment brand to target current and potential employees (Tumasjan, Strobel, & Welpe, 2011). A business with a strong employer brand that recognizes the needs of its target group will better achieve differentiation and remain competitive in the labor market (Urbancová & Hudáková, 2017). Additionally, a company that effectively communicates their company culture, as well as its unique benefits, will gain a competitive advantage when recruiting top talent (Bajic, 2016).

In today’s talent-driven marketplace, money is no longer a top priority. Instead, it is a company’s reputation - its employer brand - that speaks volumes to the current and potential workforce (Urbancová & Hudáková, 2017). When an organization’s employer brand is succeeding in delivering an experience that is coherent with the promises made, they will benefit from a committed workforce who eventually turns into one of the essential company advocates (Lulla, 2019). It may be easy for businesses to find employees; however, a more significant challenge is to find top talent (Cardy & Lengnick-Hall, 2011). These highly talented potential employees are generally aware of their value to companies, and they seek the best

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opportunities in the market while searching for an employer with a brand that they can trust. Thus, employers need to develop and understand how to effectively build an employer brand to make the company appealing for new candidates while simultaneously improving their reputations (Lulla, 2019).

A startup is a company that searches for a business model that will change existing markets or even create new ones (Blank, 2013). Seeking top talent can be particularly difficult for startup companies, which could be due to both time pressure and a frequent lack of financial and other resources. Instead, their focus is spent mainly on building and expanding the business, ensuring a successful establishment of a startup. Finding the right candidates for a startup is essential

(Moser, Tumasjan, & Welpe, 2017) as they compete with multiple companies with already

established brands. Startups cannot rely on previous visibility and word-of-mouth as their competitors. For a startup to stand out and be competitive in the war for talent, they need to build a strong employer brand and an employee value proposition (Sundberg, 2017). Thus, it is worth studying the impact of employer branding within startups, to create a deeper understanding of how startups should develop their employer brand.

1.2 Problem Discussion

Low organizational awareness, high levels of uncertainty, and limited public recognition are some of the significant competitive disadvantages that startups face when recruiting their employees. With limited resources as a new business, startups are forced to make trade-offs in their initial efforts to either advance their distinctiveness, or legitimize themselves as a startup employer (Moser et al., 2017). These various factors lead to challenges in the recruitment process, making it harder to attract and retain top talent as a newly created company when not having the same capabilities as an already established company. This is quite a challenge since one of the most important success factors for early age startups is having talented employees and succeeding in recruiting qualified candidates. In an era of exponential improvements in technological developments, the success or failure of firms is to be found within the human resources department (Moser et al., 2017).

Additionally, there is a shortage of talent within today’s labor market, creating a burden in most organizations to establish strong human capital resources (Elegbe, 2018; Urbancová &

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Hudáková, 2017). The result of this leads to an extensive war for talent, which has given birth to the concept of employer branding (Elegbe, 2018; Verma & Ahmad, 2016). Consequently, employer branding has gained great importance, and for the last two decades, it has been a major competitive advantage. It has shown to be a successful tool for established companies when attracting and retaining a highly-skilled workforce (Bonaiuto et al., 2013). Recruitment departments in the past solely had to publish a job advertisement and wait for applications when attracting a new workforce, while today the scenario is different, especially concerning top talents. By implementing employer branding as a strategy, the company can position itself favorably in the labor market and therefore easier attract top talents (Verma & Ahmad, 2016).

Since employees are an organization’s greatest asset, the value of employer branding goes beyond recruiting qualified employees. It is a source of employee engagement, employee motivation, and retention of talent as well (Elegbe, 2018). As Collins (2001) declared, an organization may have a great strategy, but that does not matter if they employ the wrong employees. If that path is followed, they will never be able to become a great company.

Some extended research on employer branding has already been conducted on established firms and industries, whereas there is limited research on employer branding within startups specifically (Tumasjan et al., 2011; Elegbe, 2018). One of the major challenges for startups is to attract and retain talented employees. Yet, there is little information about how startups can successfully build an employer brand (Tumasjan et al., 2011) and become an attractive employer (Moser et al., 2017). Further, Moser et al. (2017) suggest that their study aims to stimulate further research on new venture recruitment and human capital, which they describe to be vital to survival and growth. Hence, the authors have recognized a gap in the literature that needs to be investigated further. More specifically, how startups should develop and define their employer brand to attract and retain top talent.

1.3 Purpose

The purpose of this research is to successfully fill the research gap while simultaneously contributing to the existing body of literature. This research will investigate how startups should implement employer branding to attract and retain top candidates for their organization.

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The empirical findings of the study attempt to guide managers and entrepreneurs within startups to successfully develop their unique employer brand. While simultaneously avoiding common difficulties when attracting and retaining their workforce. Thus, this study can provide useful knowledge to entrepreneurs with little experience on the subject and serve as a guiding tool to increase efficiency in the employer branding process.

1.4 Research Question

“How should startups use employer branding to attract and retain top talent?”

1.5 Delimitations

This paper explores employer branding from the perspective of Swedish entrepreneurs as employer branding experts, focusing on their personal experiences in working with the topic throughout their professional careers (Appendix, 1). Hence, resulting in a broader and more objective perspective. The following study is focused mainly on exploring how Swedish startups should implement and use employer branding and thereby excludes other countries and their processes. The reason is due to the different restrictions, values, and cultures found in different countries which may affect how working with employer branding looks. Furthermore, there are many differences in employee benefits based on government regulations such as parental leave, vacation, etc., which puts employers around the world at different starting points. As a result, it is difficult to compare the benefits given in a Swedish startup with a non-Swedish startup.

Additionally, the choice for the collection of data to solely interview employer branding experts and not startup entrepreneurs was taken based on relevant reasons. The authors argue that employer branding experts possess a deeper knowledge of the subject as a result of their personal experiences. For the experts, much knowledge has been gained with starting their own companies and developing the employer brand, as well as their consultancy of employer branding towards various types of businesses. Therefore, the authors strongly argue that these two valuable qualifications simultaneously ground the reasoning of interviewing experts while still successfully maintaining the startup perspective. Hence, we chose not to interview startup representatives solely.

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2. Frame of Reference

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This chapter fills the purpose of providing a theoretical background to relevant topics and concepts. Firstly, startups are defined through the Spiral Model. Further presented are the topics of a brand and employer branding, with related concepts to give the reader a deep understanding of the concept of employer branding.

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2.1 Method for Frame of Reference

First, the topic of employer branding in connection to startups was established. To conduct an extensive review of the employer branding literature, the authors began by identifying and analyzing relevant literature as well as clustered the literature into categories to synthesize the research. Before the initial search, the were search criteria was determined, ensuring the literature appeared in peer-reviewed journals written in English. It was important that the literature was up to date and cited to the greatest extent possible. However, the search was not limited to any specific time frame. Earlier work was included based upon the reasoning that employer branding is a concept that originates from 1996. As the concept is relatively young, the articles used ranged from 2001 and forward. Using earlier literature made it possible for the authors to include themes, definitions, and concepts from highly cited articles within the field. Additionally, articles that had a significant number of citations were viewed as highly qualified articles within the subject, considering that other authors found it worthy of citing. However, one needs to take into consideration that employer branding is a relatively new concept. Therefore, the majority of the articles have been published in more recent years, lowering the chances of a high impact factor which authors have taken into consideration. This is the main reason why these articles may not have been cited as much as previous articles. An initial search was conducted through academic databases that are providing business and management publications, such as ProQuest ABI/INFORM, Google Scholar, and Primo, which is the online library of Jönköping University. The primary search word used as a broad umbrella term was “employer brand*”, to include the words ‘employer branding’ and ‘employer brand’, this resulted in 247 articles. Some articles were later eliminated, such as extracts of books, executive summaries, articles, and articles not relevant to the topic.

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Additionally, journals possessing an impact factor above one (1.0) were used to the greatest possible extent. This to ensure quality of information in published articles.

The following keywords were later used, ‘the importance of employer branding,’ ‘employer

branding and startups’, ‘EVP’, ‘employer attractiveness’, ‘employee retention’, ‘startups’,

‘new venture’, ‘startups attributes’ and ‘employer image’ to review articles that could enhance

the authors understanding of all aspects within the research topic as well as the process and development of models within the field. All relevant articles were read and reviewed by each author for the creation of the frame of reference.

2.2 Startups

There are numerous opinions regarding the true meaning of a startup (Le & Suh, 2019). New Oxford American Dictionary (2011) defines a start-up as a newly established business. Another widely used definition in industry publications and scientific literature on a startup was formulated by Steve Blank, a Silicon Valley entrepreneur in 2003. His definition of a startup is

“a temporary organisation formed to search for a repeatable and scalable business model”

(Blank, 2013, p.67). Hence, a startup is a company that searches for a business model that will change existing markets or even create new ones. Resulting, this is the main difference between a startup and an already existing company (Blank, 2013). Words such as new, innovative, or technological are not included. Hence Blank’s definition of a startup does not define any specific industry, product innovation, or an organization’s age. These definitions conflict with the idea put forth in the literature that there is no official definition of a startup (Duncan & Handler, 1994; Luger & Koo, 2005; Skala, 2019). This inconsistency within the literature often results in misinterpretations (Duncan & Handler, 1994), generalizability problems and weakens the validity because of the lack of a consistent definition (Luger & Koo, 2005).

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2.2.1 Spiral Model

In Skala’s research (2019), the author presents their own - an original - definition of a startup, called “a spiral definition of a startup”, which is based on the analysis of several different definitions and growth factors. The spiral shape illustrates how the concept of a startup narrows in line with the company’s maturity. Therefore, a startup’s most important criteria are different depending on the stages of an organization’s development. The squares mirror these criteria of the various stages of the development in figure (1), while the areas of the squares reflect the decreasing population size of startups.

Figure (1): Spiral definition of a startup (Skala, 2019).

The spiraling curve illustrates the path of a startup’s development.

According to the figure, the startup life cycle is divided into three basic stages: initial, expansion, and maturity. In the initial stage, a startup is an organization with limited resources that has recognized a demand in the market or provided a solution to a problem market. Further, the initial stages include the creation of an innovative business model. The second stage is the expansion stage, where the organization grows rapidly. Lastly, at the maturity phase, the organization has become a hyper-scalable organization. The initial phase will have the greatest number of startups. However, most of them will fall out of the spiral, and the number of startups will, therefore, decrease in the mature stage.

Reasons that startups are falling out of the model can depend on them transforming into other types of organizations: micro-enterprises, corporations, non-profit foundations, etc., or that the

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business model is found not to be profitable. There are relatively few startups that will be able to reach the core of the spiral (Skala, 2019).

According to Pandey and Pattnaik (2017), the vast majority of startups are unable to consider growth, as well as scale up their human resources in comparison to their growth in revenues. Mainly, it could be connected to how the founders are searching for scalability of the operation in the first planning phase, and thus little emphasis is given to how future recruitment will be met.

2.2.2 Startups and Recruitment

Extensive research has been conducted examining the characteristics of founders to new ventures, where relatively little research has been focused on understanding the attraction of employees to new startup ventures (Cardon & Stevens, 2004; Greer, Carr, & Hipp, 2016), as well as the characteristics of those who join founders in their entrepreneurial activities (Sauermann, 2018). Sauermann (2018) describes this group of people as “joiners”, and this group is particularly critical in the early stages as founders often struggle to attract the right human capital. Further, he argues that there are significant differences in employee characteristics within startups and established companies. Sauermann (2018) also describes joiners to have greater willingness to bear risks and therefore do not place any real importance on salary or job security, as well as have a higher output than employees in established firms. Instead, joiners seek for independence and responsibility. Hence, what decipher a startup from a larger company are the employee attributes, e.g., the compensation offered by the employer (Tumasjan et al., 2011). However, there is little research clarifying the difference of importance on such attributes, and their importance for employer branding when comparing startups and established businesses (Tumasjan et al., 2011). Furthermore, Moser et al. (2017) suggest more research to investigate employer attributes from the individual perspective of concrete attributes of new venture employer attractiveness.

One of the most crucial success factors for a startup and new ventures in their earliest stages is having enough talented employees. Yet, they face difficulties in recruiting the top talent (Moser et al., 2017). A reason for this may be that startups often forget to create a specific strategy for Human Resource Management. Another reason could be that the founders may lack the skills

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and expertise in designing HR practices that involve recruiting and retaining employees to their organization (Pandey & Pattnaik, 2017).

2.3 Brand

Murphy presented his definition of a ‘Brand’ in 1988, as a bundle of ingredients consisting of the product, the packaging, the brand name, the promotion, advertising, and presentation. The owner of the brand then collects these mentioned attributes and blends them uniquely. Moreover, Murphy (1988) argues that brands are highly significant because if they succeed in being appealing, consumers will purchase. In time, the brand will become a valuable asset and create a unique distinctiveness among other companies. Four years later, Ambler took on a more consumer-oriented approach when presenting his definition of a brand. He described the phenomenon as the promise of the bundles of attributes. Attributes that may be rational, emotional, tangible, or intangible, which further act to provide satisfaction for the consumer as they purchase (Ambler, 1992). Researchers present different definitions of what a brand is and how it is perceived in the minds of the consumer. However, the linking theme that is found within the literature is the distinctiveness towards competitors (Murphy, 1988).

Stated by Fanning (1995) and Gupta, Gallear, Rudd, Pantea & Foroudi (2020), brands in the future will become more relevant than ever for the consumers as it will end up being the only differentiation between companies. Also, Fanning (1995) points out that successful brands will need to focus on two golden rules concerning continuous innovation and continuing to tell the story. Constant innovation is related to acknowledging change and being able to stay ahead of the competition. While the latter is about what the core brand values are, the brand itself and what it stands for is continuously evolving. It is also imperative to continually update the style of storytelling as the public taste is ever-changing (Fanning, 1995).

2.3.1 Brand Equity

Connected to the brand is brand equity, which is the added value related to a specific product or service (Theurer, Tumasjan, Welpe, & Lievens, 2016). When marketers adopt the term ‘brand equity’, they most often refer to the brand description or brand strength as the result of distinguishing it from the asset valuation (Wood, 2000). According to Keller (2003), the strong

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influence of a brand derives from what customers have learned, felt, seen, and heard about the particular brand over time, resulting in their experiences of the brand in a long-term viewpoint. Atilgan, Aksoy, and Akinci (2005) argues that one of the most accepted and comprehensive definitions of brand equity is the following: “A set of brand assets and liabilities linked to a

brand, its name, and symbol, that add to or subtract from the value provided by a product or service to a firm and/or to that firm’s customers” (Aaker, 1997, p.15). These conceptualizations

made by Aaker (1997) and Keller (2003) serve as the basis theoretical foundation for the employer branding concept (Theurer et al., 2016).

2.4 Employer Branding

In the early 21st century, Cable and Turban (2001) found different sentences among definitions and concepts of employer branding. Researchers had been labeling similar concepts by different names and vice versa. Fifteen years later, the same inconsistency is still present (Backhaus, 2016). It was observed that the employer branding process and its definition suffered from numerous shortcomings, whereas few discussed the difference with the employer brand. (Theurer et al., 2016).

Due to the difference between employer brand and employer branding, it is essential to distinguish them successfully. Accordingly, the employer brand could be defined as the face of the company that is presented to society as a potential future employer. In other words, it covers what associations people may have with a specific company. Employer branding, on the other hand, refers to the exact process of developing an identifiable and unique employer identity (Theurer et al., 2016).

Employer brand was first conceptualized by Ambler and Barrow (1996) in their groundbreaking study where they define the phenomenon as “the package of functional, economic and

psychological benefits provided by employment, and identified with the employing company” (p.187). Backhaus and Tikoo (2004) describe the concept as the organization’s efforts to

promote, both inside and outside the borders of the organization, and establish a distinctive view of what is different and desirable as an employer. By implementing an employer brand, an organization provides employer perceptions that differentiate them from their competitors in a positive way. Accordingly, succeeding with the employer brand might result in both

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attracting and retaining a motivated and talented workforce. A strong employer brand will allow for an increase in organizational success since it has the potential to minimize costs as the communication gets more efficient and effective (App, Merk, & Büttgen, 2012). Ambler and Barrow (1996) mentioned in their research that the employer brand has a clear and distinct personality, and should, therefore, be positioned in the same way as a product brand.

Lloyd (2002) defines the employer branding process as “the sum of a company’s efforts to

communicate to existing and prospective staff that it is a desirable place to work” (p.65). Within

this process, principles from marketing are adopted to manage organizations’ tangible and intangible employment offerings successfully. These offerings could be displayed through communication campaigns allowing the company to increase awareness while at the same time, strengthen the connection between the desirable attributes and the employer brand (Theurer et al., 2016).

According to Theurer et al. (2016), there are different opinions regarding who has the main responsibility of the employer branding process, and it is a frequent topic of debate. Some argue that the main responsibility should be found within the HR department, while others suggest it should be handled through cross-functional teams. Ultimately, it is suggested that employer branding is found within the intersection of the following departments: marketing, corporate communications, and operations (Martin, Beaumont, Doig, & Pete, 2005). Nonetheless, who ultimately takes responsibility appears to be a case-by-case decision and thereby dependent on various factors in the company such as executive sponsorship, leadership, and personal dynamics (Theurer et al., 2016). Also, organizational set-up and brand architecture might affect how it is handled (Barrow & Mosley, 2005).

Moreover, employer branding is utilized to enhance both employer attractiveness and an organization’s reputation (Reis, Braga, & Trullen, 2017; Sivertzen, Nilsen, & Olafsen, 2013). Thus, employer branding, employer attractiveness, reputation, and retention are three closely related concepts (Maury & Agarwal, 2018).

2.4.1 Reputation

When studying the literature, one can see that researchers are frequently arguing that reputation and employer branding are closely connected, but yet distinguishable from one another (Vercic

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& Coric, 2018). While others say that reputation is an integral part of the employer brand (Tüzüner & Yüksel, 2009). However, reputation is highly subjective since it is based upon an individual’s perceptions, and even though the concept has been broadly used in various studies, the authors have still not been able to originate a definitive definition (Lange, Lee, & Dai, 2011).

Organizations that have a strong brand and a good reputation within a desirable business sector are more likely to be seen as an attractive employer, but this may not ensure that it is a better place to work. A positive reputation will create an advantage because drivers such as personal pride and the social status associated with being employed at such companies are important factors (Bell, 2005). However, according to Tumasjan et al. (2011), startups have less or no reputation compared to already established companies, which ultimately may lead to a disadvantage when attracting top talent.

2.5 Employer Attractiveness

Employer attractiveness has been defined by Berthon et al. (2005) as the “envisioned benefits

that a potential employee sees in working for a specific organisation” (p.151). Employer

attractiveness is imperative since it strengthens the organization’s employer brand equity. Hence, future employees will perceive the employer as more attractive, and a greater number of individuals will apply for the vacant positions (Berthon et al., 2005; Theurer et al., 2016).

Furthermore, employer attractiveness consists of five factors that have been developed by Berthon et al. (2005), which is an extended version of Ambler and Barrow’s (1996) dimensions for psychological, functional, and economic benefits. Specifically, these factors were developed into a scale that can be applied to assess employer attractiveness. The scale includes 25 items forming five dimensions: interest value, which relates to the innovation and interest in the product or services that the employer is providing, while the social value is referring to the environment at the workplace and the relationships between colleagues. Application value is concerning the possibility of an employee to use their knowledge, and to what extent they can apply and use what they have learned as well as educate others, this reflects how customer-oriented the organization is. Economic value is concerned with economic benefits, such as higher salaries, promotional opportunities, and job security. Lastly, the development value

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refers to the possibility for future job opportunities within the organization where the employer recognizes an employee’s value (Berthon et al., 2005; Sivertzen et al., 2013).

Furthermore, these five dimensions were found to be negatively correlated with an employees’ turnover intentions, where the social and development value acted as significant predictors (Kashyap & Verma, 2018). Hence, by implementing the five dimensions, a higher value of the employer brand can be perceived and thus reduce turnover intentions. This, in turn, leads to a reduction in costs of hiring and the training of new employees and thereby aiding for a more profitable organization with more satisfied employees (Kashyap & Verma, 2018).

Startups possess several disadvantages in comparison to larger, already established companies when it comes to employer attractiveness. For example, the visibility of applicants for startups is low. They may also possess fewer opportunities for providing their employees benefits and compensation. Once again, these highlighted factors, as well as other disadvantages, conclude that attracting top talents is one of the greatest challenges for startups (Moser et al., 2017; Tumasjan et al., 2011). To conquer this challenge, startups should make use of employer branding and thereby attract talented personnel. To attract applicants, startups should highlight the factors that are unique and valuable (Tumasjan et al., 2011).

Also, Tumasjan et al. (2011) recognized that team climate, responsibility, empowerment, and flexibility were the attributes that top talents valued the most in startups. Thus, startups should implement these in their employer branding activities to sustain a competitive advantage in the war for talent.

2.5.1 Employer Image

Drawing from the relevant literature (Theurer et al., 2016), employer image can be defined as the beliefs that potential employees hold about the employer. In the literature, there exist various dimensions to measure the value of an employer brand or image perceived by potential and existing workforce (Kashyap & Verma, 2018). Employer image can be categorized into an instrumental and symbolic framework. This framework was initially introduced in Lievens and Highhouse employer branding research from 2003. Furthermore, the employer image is also influenced by the tangible and intangible job attributes (Cable & Judge, 1994).

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2.5.2 Instrumental and Symbolic Attributes

The first dimension of the employer image attributes is the instrumental attributes which can be accounted for as functional features and benefits such as pay and flexible working hours (Kashyap & Verma, 2018; Lievens & Highhouse, 2003). In a startup context, it can, for example, mean level of responsibility and flexibility (Theurer et al., 2016). The symbolic

attributes allow employees to “maintain their self-identity, to enhance their self-image, or to express themselves” (Lievens & Highhouse, 2003, p.79). This enables individuals to associate

human traits with brands, for instance, an organization can be recognized as trendy, masculine, prestigious, or successful (Aaker, 1997).

Both instrumental and symbolic attributes are influencing the employer attractiveness positively (Theurer et al., 2016). However, the importance of symbolic attributes increases when instrumental differences are limited since they create a larger differentiation between an employer and their competitors than compared to what instrumental attributes does (Lievens & Highhouse, 2003; Plummer, 2000; Reis & Braga, 2016).

2.5.3 Tangible and Intangible Attributes

Attracting top talents through communicating job attributes is helpful while trying to establish a positive impression (Cable & Judge, 1994). These job attributes can be divided into two different categories with different and distinctive characteristics, namely, intangible and tangible attributes. In the past, these concepts have been implemented to describe product quality whereas today they have been applied to describe employee motivation attributes (Ding & Keh, 2017). Intangible attributes could be identified as those which are subjective while the tangible attributes are more concrete and objective. Additionally, tangible attributes could comprise good pay and compensation whereas intangible attributes identify the pride of being connected with a reputed employer. Thus, the intangible and tangible attributes in combination make up for a job attribute. Although it has been recognized that previous literature is mainly focusing on the tangible job attributes and its role in employer attractiveness, and few examine the importance of the intangible attributes (Ahamad, 2019). Besides, these intangible attributes possess the potential of enabling success for a company in a competitive market (Kucherov & Zavyalova, 2012).

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2.6 Employee Retention

An organization must be able to retain its top talent to maintain a sustainable competitive advantage (Mccracken, Currie, & Harrison, 2016). The retention of top talent has always been imperative for companies. Still, it has become even more significant today due to the human capital that remains as one of few resources which can provide the organization with a competitive advantage (Cardy & Lengnick-Hall, 2011). According to Baron and Hannan’s study (2002), few things are more crucial for a startup’s success than their retention of top talent, whose expertise often represents the organization’s most valuable assets. Porter (2011) argues that focus should be placed on retaining top performers, as they are more likely to be headhunted or recruited by competitors. To prevent top talent from leaving, managers need to continuously validate them. Recruiting and training employees is a considerable massive investment for an organization. Therefore, organizations should retain highly qualified employees that can give back on the investment (Cardy & Lengnick-Hall, 2011).

Turnover rates of employees can be prevented (Porter, 2011). However, it is important to distinguish retention and turnover in theory (Cardy & Lengnick-Hall, 2011). Factors that may cause an employee to leave the organization do not have to be the same factors that can increase an employee’s commitment to stay. Factors such as new offers and opportunities or family situations may lead to employees leaving; while, leadership, and an organization’s culture, thus a strong employer brand, can cause an employee to stay. Hence, it is important to acknowledge that retention and turnover have different causes (Cardy & Lengnick-Hall, 2011).

2.6.1 Employee Value Proposition

An employee value proposition (EVP), refers to an organization’s values, their culture, work policies as well as their reward systems and the tangible and intangible benefits and rewards employees will receive by being an employee of the organization (Arasanmi & Krishna, 2019; Herger, 2007). Hence, an organization’s EVP should be derived from clear and strong organizational values, strategic objectives, and principles (Bell, 2005).

EVP is a unique and effective strategy for managing employees and is a crucial factor to overcome the challenge of retaining employees and to decrease turnover by increasing employee commitment. Research has shown that committed employees are a valuable asset to

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an organization since they increase productivity and competitiveness (Arasanmi & Krishna, 2019). Employee commitment was defined by Meyer and Allen in 1997 as the psychological connection between an organization and its employees, which makes them leaving their employer less likely. Further, the more an organization aims to engage talent by enhancing career opportunities, it can minimize the risk of employees leaving (Ray & Singh, 2016).

If employees' values and principles are not in line with the organization's EVP then it may lead to people leaving the organization (Bell, 2005). Therefore, it is of great importance that the organizations actively meet their employees’ expectations to foster loyalty, engagement, and commitment within the organization (Arasanmi & Krishna, 2019). Thus, employees do not solely want to define themselves with the job, in addition, they need to be able to identify themselves with their employer (Urbancová & Hudáková, 2017).

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3. Methodology and Method

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This chapter presents the methodology and method. The methodology consists of research philosophy, research approach, and research design. The method consists of data collection, sampling, and a section describing semi-structured interviews which was the chosen method for data collection for this study. Lastly, a section presenting data analysis and data quality concerning ethical issues is included.

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3.1 Methodology

3.1.1 Research Philosophy

Prior to defining the research design, the authors had to determine the paradigm of the philosophical assumption that may influence the quality of the research. Establishing if the paradigm was positivism or interpretivism at the beginning of the research helped the authors to clarify the research design (Collis & Hussey, 2014). The authors chose to apply an interpretive approach throughout the research.

According to Collis and Hussey (2014), an author who is interpretive within the ontological assumption believes that there are multiple realities because everyone views the world in different ways. Accordingly, the authors became aware that reality is complex and the interpretation of the reality among individuals differs. Therefore, results within this research will be based upon the individual’s perceptions, interactions, and interpretations collected through in-depth interviews. The aim would thereby be to identify diverse perspectives of the topic that supports the interpretive paradigm of this exploratory research.

Further, an interpretivism paradigm has been accepted on the epistemological assumption as well since it is interrelated with the ontological assumption. An author adopting an interpretive philosophy possesses the aim to be more involved with the research (Collis & Hussey, 2014). Further, it allows for richer discussions of the subject with the participants, where the authors may draw knowledge from the subjective findings of the participants’ thoughts (Collis & Hussey, 2014), which the authors carefully took into consideration throughout the study. Hence,

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the authors can argue that for this exploratory research, that the interpretivism philosophy is applicable.

3.1.2 Research Approach

To fulfill the purpose of this study, a suitable research approach should be chosen. Two different research approaches that are commonly discussed and implemented are induction and deduction. A deductive study aims to test the validity of a hypothesis or an assumption that is drawn from theory, while an inductive approach is the exploration of a specific phenomenon through observation of empirical reality (Collis & Hussey, 2014).

After understanding the interpretive point of view, the authors determined to use an inductive approach, by exploring employer branding through observing empirical realities from experts through in-depth interviews. This is an approach where theory derives as a consequence of the analysis as well as the data collection (Collis & Hussey, 2014). Furthermore, themes of the findings emerged inductively from primary data. In more detail, the authors were eager in their attempt to explore meaningful but yet relevant connections of empirical data to theory and thereby striving to add to the existing literature.

Moreover, this research will not be testing any theories in a numerical way which is the main reason why it cannot be considered as a deductive research approach. Instead, this study will be implementing an inductive research approach (Collis & Hussey, 2014). This will be done by drawing meaningful connections among the observations and the frame of reference and thereby contributing to the existing literature.

3.1.3 Research Design

When attempting to answer the research question within this study, the research design plays a significant role. In this specific case, the authors chose to implement a qualitative research design which in turn would help them understand the reasoning of how to implement employer branding in the early stage of a company and further how that may serve as a tool to attract and retain top talent. Qualitative data are associated with an interpretive methodology which usually results in findings with a high degree of validity (Collis & Hussey, 2014). Validity refers to the extent to which the research findings reflect the phenomena under study (Collis & Hussey,

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2014). This research design is the opposite of the quantitative design which is not a suitable design to apply in this case, since the goal is to develop a deep understanding of the concept as well as its underlying reasons through interviews (Collis & Hussey, 2014).

3.2 Method

3.2.1 Data Collection

In research, methods are referred to as how exactly data is being collected and analyzed for its specific purpose (Collis & Hussey, 2014). The primary data for this research was collected through in-depth interviews to determine what the participants do, think, or feel regarding the specific topic of employer branding (Saunders, Lewis, & Thornhill, 2016). The identification process of the sample and the chosen interview style is further described in the following paragraphs 3.2.2 and 3.2.3. The primary data was collected by the authors through four in depth-interviews. When conducting the interviews, the participants were offered the opportunity to fully express their own emotions, thoughts, and opinions regarding the subject (Saunders et al., 2016). The interviews were recorded and transcribed, before being analyzed by applying a thematic analysis. Two additional participants accepted to be part of the study and the authors were open to conduct further interviews, but data saturation was reached after the preliminary four interviews and the additional two interviews were not conducted. This means that the additional interviews would not have added to the author’s knowledge of the concept under study (Collis & Hussey, 2014).

3.2.2 Sampling

The authors have chosen their sampling method depending on the research purpose and research question (Saunders et al., 2016). Interviews with experts within the field of employer branding were conducted, a purposive sampling therefore applied. A purposive sampling method is frequently utilized in correlation to small samples used in interview studies. This sampling technique allows the authors to gain a deeper understanding of the topic and identify patterns (Collis & Hussey, 2014). However, this means that individuals in the population do not have an equal chance of being selected, hence, this interpretive study will have a non-random sample (Collis & Hussey, 2014).

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The study will be based on the findings from five experts within the field, which by definition is an individual with special skills or comprehensive knowledge in a particular field (Expert, 2020). Arguably, an expert can communicate their experiences expressively and deliberately, thus being the most adequate sample to answer the research question (Saunders et al., 2016). All participants have worked with employer branding within a time frame of five to twenty years. Further, all participants have a managerial position within their company and have experiences from starting their businesses, which strengthens their knowledge within the entrepreneurial startup perspective.

The participants should have worked with startups and their employer brand. To identify startups, the ‘spiral definition of a startup’ was utilized, all further concepts within startups and applications were discussed from this figure (see figure, 1). Lastly, the experts were to be operating in Sweden since research has shown significant differences in cultural values among nations (Hofstede, 1994) and that these national cultures affect the recruitment process (Ma & Allen, 2009). Hence, the recruitment tools and an organization’s employer brand strategies may not be applicable across the globe (Ma & Allen, 2009), therefore the authors have decided to conduct their study solely based on Swedish participants.

These criteria resulted in a homogeneous sample, as all interviewees shared comparable characteristics which allowed more detailed responses and the ability to detect similarities and differences (Saunders et al., 2016). However, just as other techniques have evident shortcomings, so does the purposive sampling technique. Given that the sample is homogeneous, the sample is therefore not likely to be representative nor have the ability to generalize the population (Saunders et al., 2016). The authors are aware that if different experts had been selected the results of the study may not have been the same.

The experts were selected by first reading business blogs and newspapers etc., to find relevant individuals working within the employer branding field. The individuals were contacted through email or a personal message on their LinkedIn where they were asked if they were willing to participate in the study. The authors reached out to a total of 14 experts, where the following five experts best met the given criteria and agreed to participate (Appendix, 2).

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Nicolas Tidhammar

Nicolas is a Swedish entrepreneur with over 20 years of experience within the fields of recruitment communication, employer branding, candidate sourcing, and HR communication and processes. He is the founder and partner of Whydentify – a Nordic communication agency

specialized in Talent Attraction and Employer Branding. Nicolas started his career as Art

Director within commercial advertising and from there he took a turn into student

communication before entering the recruitment field. He worked for the international

recruitment company Mercuri Urval for a decade, managing its corporate brand and building

internal advertising agencies before he founded Whydentify in 2010. Nicolas is also the

co-founder of Magnet Awards, which is a Swedish and Norwegian employer competition within Employer Branding.

Robert Dybeck

Robert is one of the top experts within employer branding in Sweden with over 20 years of experience in the field. During his career, he has worked for several companies including Teamtailor, which is a branding and recruitment platform. Robert is also the founder and CEO of Wildfire, a company that works with organizational cultures. He also works as a consultant in employer branding at Kvadrat.

Viktor Dahl

Viktor has a bachelor’s degree in psychology in which he developed a passion for human traits. Since graduation, Viktor has been working with employer branding in many different sectors, and in 2019 he became a partner of the employer branding and recruitment company Unicollar. Viktor is also a lecturer and educator within employer branding aiming to develop organizations and their employees.

Helena Engström

Helena has over five years of experience within the field of employer branding. She has a master’s degree in economics with a minor in service management. Helena is also the co-founder and CEO of Vass Kommunikation, a Swedish communication consulting agency. At Vass Kommunikation, they offer communication services where they aim to focus on people. Before founding her company, Helena pursued opportunities within the fields of communication and marketing. She also lectures about employer branding and educating various companies in the concept.

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Johanna Engström

Johanna is the second co-founder of Vass Kommunikation, along with her sister Helena. Johanna has a background in textiles and fashion, and also a lengthy tenure in the field of economics. She decided to pursue her lifelong dream of becoming an entrepreneur together with her sister, and together they started a communication agency focusing on strengthening companies’ communication to attract and retain the best workforce. Throughout her career, Johanna has developed a strong knowledge of employer branding with her involvement in various consulting projects, but also by founding her own company. She is also lecturing about employer branding and educating companies in the concept.

3.2.3 Semi-structured Interviews

The authors chose the method of semi-structured, in-depth interviews to collect the primary data (Appendix, 2). The reasoning being that this method would allow questions that would guide the participant through the discussion while simultaneously allow for deviations. Further, according to Saunders et al. (2016), when there is a possibility of other themes to appear during the interview, this method is highly appropriate. The combination of employer branding being a fairly new concept, as well as the authors’ limited knowledge about the topic, makes the chosen interview method appropriate (Saunders et al., 2016).

Prior to the interview, the questionnaire was sent out to the participants, since the authors believed that allowing them to prepare would contribute to collecting richer findings. The initial strategy for the authors and the participants was to conduct the interviews face-to-face. However, due to the outbreak of the coronavirus (Covid-19) the authors together with the participants made a mutual decision to hold the interviews via Zoom or Whereby, and a previously planned trip to Stockholm for two of the interviews was therefore canceled. The online method applied has been recognized to be less time and cost consuming (Collis & Hussey, 2014), allowing more convenient scheduling for both parties which compromised the entire interview process into two weeks. Regretfully, the online interviews made it more difficult for the authors to consider nonverbal behavior into consideration. Additionally, the method placed a technological barrier between the authors and the participants that made it harder to get involved in the conversation. Some technological disadvantages arose as well, such as poor audio and a few lost connections.

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It was initially arranged for all three authors to be present during the interviews, but due to an unfortunate family matter, one of the authors was not able to attend two of the scheduled interviews. During the interviews, each author had a specific function, one had the role of leading the interview and asking the questions, while one was responsible for the recording and taking notes of the discussion. The third author, when present, supported the interviewer to ensure that the main and most important questions were covered.

Table 1: Details regarding the interviews

3.2.4 Question Design and Formulation

The semi-structured interviews allowed the author to design questions prior to the interviews (Appendix, 3). This technique enhanced flexibility where specific questions could be reformulated or removed during the interview, depending on the discussion. This may have resulted in some differences between the interviews since it may have affected the participants’ answers and consequently, the reliability of the findings (Collis & Hussey, 2014).

The questions were formulated based on the literature used in the frame of reference, ensuring that each main topic was covered in the interviews. However, adjustments were simultaneously made to the frame of reference as primary data appeared. The questions were presented in a logical order moving from general to specific where open-ended questions were mainly used, encouraging the interviewee to provide more extensive answers regarding employer branding.

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The initial questions were followed by summary questions to validate the answers further and to avoid ambiguity and reduce biases of the author’s interpretation (Collis & Hussey, 2014). To conclude the interviews, a few true and false questions were asked, to let the participant know that the interview was coming to an end. Lastly, the participants were asked if they had any final comments.

On the day of the interviews, it was essential to build rapport with the interviewees to gain richer data and more successful results. The authors were, therefore, mindful of their first impression and started the interview with a casual conversation yet established credibility and built trust (Collis & Hussey, 2014).

3.2.5 Description of Data Analysis

Within this paper, the thematic analysis has been used to analyze the empirical data collected from the semi-structured interviews. According to Saunders et al. (2016), this method of analyzing data is repeatedly used. The technique helps the authors within the study to identify, analyze, and report different patterns within the collected data. It was resulting in a data set that is described in full detail (Braun & Clarke, 2006).

The authors followed the six-step process found within the thematic analysis method (Appendix, 4), where the initial step was to develop a deep understanding of the data (Braun & Clarke, 2006). To get familiar with all data, all interviews were carefully transcribed. The authors then listened to the recordings of the interviews several times. When searching for meanings and patterns, the authors simultaneously took notes to ease the next step while listening and transcribing. The following phase consisted of generating initial codes of the data, which is a process to identify features of the data (Braun & Clarke, 2006). The coding was done by organizing data into meaningful groups to prepare for step three, which consisted of finding broader themes (Appendix, 5). More precisely, the authors systematically focused on the data separately to form bases for themes across the data set by manually writing notes, highlighting parts, and dividing data into segments (Braun & Clarke, 2006).

From the codes, the authors were able to identify major emerging themes that further represented meaningful patterns within the collected data. Moreover, the fourth step for the authors was to perform a quality check on the specific themes. Some were discarded due to

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their inconsistency towards the research question. After that, an elaboration on the imperativeness of the themes and their meaning was conducted. This was leading to the next step, which included a comprehensive representation of findings derived from the interviews. To accurately perform this step, the authors chose to implement key passages and quotes to enable an illustration of the findings and contributions. Lastly, the authors were able to draw essential connections between the literature in the frame of reference and the findings of the primary data (Braun & Clarke, 2006).

3.2.6 Data Quality

To ensure data quality within this qualitative research, four different aspects were taken into consideration: credibility, dependability, transferability, and confirmability (Collis & Hussey, 2014).

Credibility

The first and most crucial aspect is credibility, meaning that the research shall be conducted in such a way that it can ensure that the research topic under study is correctly identified and described (Collis & Hussey, 2014). The authors have been deeply involved in the research to improve the research credibility.

The authors also worked closely together with their tutor and seminar group, enabling them to regularly peer debrief the research (Collis & Hussey, 2014). To further increase the credibility and the authenticity of the study, the authors have included quotes of the participants’ own words that support the results. According to Collis and Hussey (2014), it is of great importance to provide quotes in an interpretive study since it will make the result more accurate and trustworthy.

Another way of ensuring credibility was utilized by the member checking technique. Hence, the author’s interpretation of the data was shared with the participants of the study. Allowing the participants to validate the data and provide additional information or correct any errors if needed, which increased the validity and reduced biases (Carlson, 2010).

It was important for the authors not to generalize the experts’ answers by citing them correctly throughout the empirical findings as well as the analysis. This accuracy and precision ensured

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reliability, and the authors, therefore, argue that these chapters will hold to close scrutiny (Collis & Hussey, 2014).

Dependability

Several measures were taken to establish dependability within the study to assure that the research process was systematic, rigorous, and well documented (Collis & Hussey, 2014). Throughout the research process, an exploratory procedure was applied, and the methodology and method have been thoroughly explained.

During the interview process, one of the authors was chosen to ask the questions in all the interviews to maintain consistency and reduce bias. Additionally, all of the audio recordings and notes taken during the interviews were shared among the authors to guarantee no data was lost. The interviews were transcribed individually, and to ensure the quality of the transcript, they were later cross-checked with the audio recordings by the other authors. The transcripts were then read multiple times by each author to ensure that each one truly understood what the data said and that the author’s interpretation of it was not changing over time. It was favorable that three authors were part of the data analysis process, ensuring that the findings were not based solely on one individual’s interpretation of the data and, therefore, not biased (Collis & Hussey, 2014). To further reduce bias, an outside researcher examined the process of the data collection, the analytical process, and the results of the research. The examination process was conducted during the fourth seminar to confirm that the findings were accurate and supported by the data.

Transferability

Transferability refers to whether the empirical findings can be applied to another similar situation (Collis & Hussey, 2014). The authors have provided the readers with a thick description of the data collection and the research setting to establish transferability (Lincoln & Guba, 1985), which allows the readers to make an informed judgment and interpret whether they can transfer the findings to their situation or not. This research may have low transferability, as previously mentioned in 3.2.2, due to a purposive sampling technique and a small sample (Saunders et al., 2016). Yet, the aim still stands, that startups founders in Sweden should be able to transfer the research findings or specific aspects of the study and apply them to help in developing their employer brand. For the findings to statistically represent a broader population, future research has to be conducted.

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Confirmability

Confirmability shall validate that the research process has been fully described and that it is possible to assess whether the findings are based on the data collected (Collis & Hussey, 2014). Additionally, descriptive quotes from the participants have been thoroughly selected and presented in the findings to ensure confirmability and transparency in the analytical process.To further establish confirmability of the study, an audit trail has been provided (see appendices). An audit trail is a set of records that describes the processes to arrive at the results of the study in a transparent manner (Collis & Hussey, 2014).

3.2.7 Ethical Considerations

An ethical approach was used throughout the study to assure that collaborative work was conducted with respect and honesty, which is essential since the research depends on the participants. All participants signed an informed consent form (Appendix, 6) ensuring that the participants were able to make informed choices knowing that they will participate in the research voluntarily. Additionally, it offered the rights of autonomy and confidentiality. However, all participants agreed to be mentioned by their full name. Because of this, it was important for the authors not to generalize the experts’ answers and to cite them correctly. Therefore, it was ensured that the results and the analysis represented what each participant has contributed with.

The consent form also explained that the interviews were going to be audio-recorded and that they would be used solely for analyzing and interpreting the data. The recordings were deleted after the results of the study were confirmed by the exam board. Furthermore, the participants were offered freedom to withdraw at any time during the study, and they were given the right to review the research before publication, being able to validate the author’s interpretation of the data (Collis & Hussey, 2014).

Another essential element to take into consideration in research ethics is the moral values and principles which establish the basis of a code of conduct. This code of conduct expresses the importance of publishing any findings transparently, not misrepresenting any findings nor plagiarizing others’ work (Collis & Hussey, 2014). To conclude, this research does not solely intend to do good but also avoid doing any harm.

‘Living the Brand’ : A Qualitative Study on how Swedish Startups should Implement Employer Branding to the Core of their Business to Attract and Retain Top Talent

‘Living the Brand’

A Qualitative Study on how Swedish Startups should

Implement Employer Branding to the Core of their Business

Acknowledgments

T

Bachelor Thesis in Business Administration

Abstract

Table of Contents

1. Introduction

1.1 Background

1.2 Problem Discussion

1.3 Purpose

1.4 Research Question

1.5 Delimitations

2. Frame of Reference

2.1 Method for Frame of Reference

2.2 Startups

2.2.1 Spiral Model

2.2.2 Startups and Recruitment

2.3 Brand

2.3.1 Brand Equity

2.4 Employer Branding

2.4.1 Reputation

2.5 Employer Attractiveness

2.5.1 Employer Image

2.5.2 Instrumental and Symbolic Attributes

2.5.3 Tangible and Intangible Attributes

2.6 Employee Retention

2.6.1 Employee Value Proposition

3. Methodology and Method

3.1 Methodology

3.1.1 Research Philosophy

3.1.2 Research Approach

3.1.3 Research Design

3.2 Method

3.2.1 Data Collection

3.2.2 Sampling

3.2.3 Semi-structured Interviews

3.2.4 Question Design and Formulation

3.2.5 Description of Data Analysis

3.2.6 Data Quality

3.2.7 Ethical Considerations