Meet the needs of tomorrow's employees: How potential employees perceive the Swedish banking industry

STOCKHOLM SWEDEN 2020 ,

Meet the needs of

tomorrow's employees

How potential employees perceive the Swedish banking industry

ISABELLE DANIELSSON

MATILDA HELLQVIST

www.kth.se

Meet the needs of tomorrow's employees

by

Isabelle Danielsson Matilda Hellqvist

Master of Science Thesis TRITA-ITM-EX 2020:199 KTH Industrial Engineering and Management

Industrial Management

SE-100 44 STOCKHOLM

Möt kraven från morgondagens anställda

av

ISABELLE DANIELSSON MATILDA HELLQVIST

Examensarbete TRITA-ITM-EX 2020:199 KTH Industriell teknik och management

Industriell ekonomi och organisation

SE-100 44 STOCKHOLM

Abstract

The banking industry is experiencing a transformation where traditional actors are being challenged by newcomers with digital and innovative solutions. This transformation is affecting both customers, employees as well as potential employees. Therefore, banks have to focus on and innovate the employee experience to stay competitive on the employer market.

This study intends to deepen the understanding of how students as potential employees perceive the Swedish banking industry and the attractiveness of different employers within it. The analysis is built on previous research within employer branding, employer value propositions, and transformations such as innovation and digitalization. A quantitative research method was used and a survey was conducted in order to collect data from the sample group, consisting of students in the last year at universities in Sweden heading for the working market. The main result of this study shows that potential employees prefer two value propositions when considering a future workplace. The first one is development value, which relates to the possibility to advance and grow professionally, and the second one is interest value, which relates to having interesting and challenging tasks. It also indicates that digital banks, compared to traditional banks, are more associated with these top two ranked value propositions, which entails that they communicate a more attractive employer brand towards potential employees.

Conclusively, this research demonstrates that there is a significant difference between how traditional banks and digital banks employer brands are perceived by potential employees. This is important knowledge for the different actors within the banking industry to both possess as well as take into consideration.

Keywords: Employer branding, employer value proposition, innovation, digitalization, transformation, potential employees

Master of Science Thesis TRITA-ITM-EX 2020:199

Meet the needs of tomorrow’s employees

Isabelle Danielsson Matilda Hellqvist

Approved

2020-06-11

Examiner

Terrence Brown

Supervisor

Kristina Nyström

Sammanfattning

Bankindustrin genomgår en förändring där traditionella aktörer utmanas av nya bolag med digitala och innovativa lösningar. Transformationen påverkar både bankernas kunder och anställda. Därför måste banker fokusera på och innovera de anställdas upplevelse för att fortsätta vara konkurrenskraftiga på arbetsmarknaden. Den här studien ämnar fördjupa förståelsen för hur studenter som potentiella anställda uppfattar den svenska bankindustrin och hur attraktiva de uppfattar dess aktörer som arbetsgivare. Uppsatsen bygger på tidigare forskning inom employer branding, employer value proposition och transformation så som innovation och digitalisering. En kvantitativ metod användes för att genomföra studien och en enkät togs fram för att samla in data från urvalet. Det huvudsakliga resultatet från studien visar att potentiella anställda värderar det som kallas development value, som är kopplat till möjligheten att avancera och utvecklas professionellt, och interest value, som är kopplat till att ha intressanta och utmanande arbetsuppgifter, högst. Studien visar även på att digitala banker associeras med dessa value propositions i högre grad än vad traditionella banker gör. Detta tyder på att digitala banker kommunicerar ett mer attraktivt employer brand till potentiella anställda. Avslutningsvis, visar denna studien att det finns en signifikant skillnad mellan hur traditionella och digitala bankers employer brand uppfattas av potentiella anställda. Vilket är en viktig lärdom för olika aktörer i banksektorn att både få kunskap om och förhålla sig till.

Keywords: Employer branding, employer value proposition, innovation, digitalisering, transformation, potentiella anställda

Examensarbete TRITA-ITM-EX 2020:199

Möt kraven från morgondagens anställda

Isabelle Danielsson Matilda Hellqvist

Godkänt

2020-11-06

Examinator

Terrence Brown

Handledare

Kristina Nyström

Acknowledgments

First of all, we would like to give a special thanks to our supervisor Kristina Nyström for

valuable inputs, constructive feedback and guidance during the process of this thesis. We

would also like to tank Marginalen Bank for meaningful insights and support. Lastly, we

would like to thank all the respondents who answered our survey and provided us with

interesting results.

Table of Contents

1. Introduction ... 3

1.1 Background ... 3

1.3 Implications for sustainability... 5

1.4 Delimitations ... 5

1.5 Outline... 5

2. Theoretical framework and literature review ... 7

2.1 Transformation in the banking industry ... 7

2.1.1 Innovation ... 7

2.1.2 Digitalization... 8

2.2 Attracting the right talents ... 8

2.2.1 Employer branding... 9

2.2.2 Value proposition framework ... 10

3. Research methodology ... 12

3.1 Methodological considerations ... 12

3.2 Research approach ... 12

3.3 Research strategy ... 12

3.4 Data collection ... 13

3.4.1 Sample selection ... 13

3.4.2 Design of questionnaire ... 14

3.5 Data analysis ... 17

3.6 Reliability and validity ... 17

3.7 Limitations ... 18

3.8 Ethics... 18

4. Empirical findings ... 19

4.1 Demographic sample ... 19

4.2 Findings research question 1 ... 19

4.3 Findings research question 2 ... 21

5. Analysis ... 25

5.1 What factors do potential employees perceive as valuable when evaluating employers in

the banking industry? ... 25

5.2 Do potential employees express any differences in their perception of the employers

depending on if it refers to traditional or digital banks? ... 26

6. Conclusion and suggestions for future research ... 29

References ... 31

Appendix ... 33

List of Tables

Table 1 The respondents ranking of the eight employer value propositions and concepts 20

Table 2 T-test for all concepts 23

List of Figures

Figure 1 Eight value propositions for employer branding. (Dabirian et al., 2019, p.86) 11

Figure 2 Value Propositions and concepts used in this study 16

Figure 3 The 5 concepts that are most associated with traditional banks 21

Figure 4 The 5 concepts that are most associated with digital banks 22

Figure 5 The mean of the 16 concepts, traditional banks vs digital banks 22

1. Introduction

This thesis starts with an introduction to the research topic. The background and problem statement will be followed by the purpose of the study and its research questions. Further, sustainability implications, delimitations and outline of the thesis are presented.

1.1 Background

During the last decade changes within the banking industry have accelerated drastically (Svenska Bankföreningen, 2016). Older generations have experiences from a time when banks had impressive offices with clerks providing personal services and cash management. On the contrary, the younger generations are experiencing the shutdown of banking offices, removal of cash management and changes in the personal service towards digital solutions (SKI, 2017).

This transformation has taken place globally (Ross & Srinivas, 2018).

While many industries have been transformed by technological solutions for years, the large traditional banks within the banking industry have been protected from transformation and newcomers, mostly, due to heavy regulations. However, new regulations have been introduced which have opened up for newcomers with foremost digital solutions. The introduction of PSD2 in 2018 is one example of a regulation that contributed to the decrease of protection against newcomers in the banking industry. PSD2 is an EU directive that regulates payment services and payment service providers in the European Union. The purpose of PSD2 is to create opportunities for a more efficient and secure payment market, promote innovation and drive the cost of payment services. This was done by letting non-bank companies participate in the competition and require full transparency about payments. (Finansinspektionen, 2018).

Consequently, this has led to a paradigm shift within the Swedish banking industry resulting in

a new competitive situation where customers shift from traditional banks to digital banks. To

keep up, banks have to adapt and improve their digital experience. (Ross & Srinivas, 2018)

Digitalization and innovation have changed many industries in recent years and the banking

industry is no exception. Banks are forced to take urgent digitalization measures due to

changing customer behaviors and a new competitive market. A consequence of not taking part

in the digital transformation is to be left behind in a market that has developed. (Cuesta. et. al.,

2015). According to Flohr Nielsen (2002), banks that have more advanced internet functions

and progressive websites are more likely to maintain profitability. By investing in IT-systems

organizations within the banking industry can develop their current products and services as

well as digitize their operations. The digital transformation is affecting both the internal

operations and processes, as well as the external experience for customers and potential

employees. Former studies show that banks and other financial services have to implement

digital technologies to innovate and improve customer experiences. A study made by Andrus

et al., (2016) demonstrates that to be fully successful within the banking industry these kinds

of organizations have to shift their focus and innovate the employee experience as well. The

employees are a crucial factor for the banks’ digital efforts and future. Studies show that the

industry has not dedicated sufficient attention to this matter (Andrus et al., 2016). Therefore, digitalization and innovation can be seen as both challenges and possibilities for the actors within the banking industry. One can then ask, what do potential employees find attractive about an employer in this particular industry?

Each year Universum, one of the most recognized employer brand specialists in the world, carries out Sweden's largest research about students’ perspectives and attitudes towards career and working life. This research is resulting in a ranking of the most attractive employers in Sweden. One of the most emergent trends spotted through this research is that innovative Swedish companies are moving up on the list of the most attractive employers. According to Universums research employers who are creative, dynamic and that invest in innovation and technology have better chances of attracting top talents (Framtidsföretagen, 2019). It stands to reason that the Swedish banking industry is a large employer who needs to respond to and adapt their employer brand to change.

Previous research on employer branding has focused on different industries with both internal and external employer branding perspectives. For example, Dabirian, Kietzmann, and Paschen, (2019) centered their research towards the IT-sector with an internal employee perspective.

However, there are few pieces of research made on specifically the banking industry and particularly how potential employees perceive it. It is therefore of high interest to further investigate, with a focus on the Swedish market, the perceptions regarding the attractiveness of an industry in change where the traditional actors are being challenged by newcomers with digital and innovative solutions and business models. How are the employer brands in the banking industry perceived by potential employees, and what lessons can banks as employers learn from this?

This study contributes to research within industrial management since it focus on marketing in a specific industry. More specifically employer branding within the banking industry.

1.2 Purpose and research questions

The purpose of this study is to deepen the understanding of potential employees' perceptions of the banking industry, with a focus on potential differences between the employer brands of the industry’s actors. Based on the study’s result, important insights regarding a successful employer brand within the banking industry will be discussed.

To achieve the purpose of the thesis the research questions formulated below will be answered.

● What factors do potential employees perceive as valuable when evaluating employers in the banking industry?

● Do the potential employees express any differences in their perception of the employers

depending on if the employer is a traditional or digital bank?

1.3 Implications for sustainability

The environmental, economic and social sustainability constitutes the three dimensions of sustainable development. The environmental sustainability dimension concerns durable care for natural resources, the balance of nature and the ecosystem. (Strezov et al., 2017). This study foremost touches economic and social sustainability, and the focus will, therefore, be on these two dimensions. Economic sustainability can be described as economic development without negative impacts on ecological or social sustainability. More precisely, the economic development that is performed without the expense of a reduction in natural or social capital.

Social sustainability is not as clearly defined as economic sustainability but it mainly relates to equality and various kinds of human rights. (Bergman & Klefsjö, 2012). Considering the growing awareness of sustainable responsibilities, the banking industry has to embrace sustainable practices or it will risk being left behind. Banks are expected to use their power to contribute to a better and more sustainable world. (World Finance, 2019).

The increasing amount of financial actors on the Swedish market contributes to economic development and studies show that they pursue ambitious work within sustainability (Svenska Bankföreningen, 2016). The transformation of the banking industry also forces its actors to change and become digital. This digitization of the industry has, as mentioned before, resulted in the shutdown of banking offices, removal of cash management and personal service towards digital solutions (SKI, 2017). Considering that the industry is highly customer-oriented and has a broad target group, which includes the older generation and other individuals that are not digitally adapted, this can lead to exclusion. Social sustainability, which refers to equality and human rights, also concerns the inclusion of people in society. This digital transformation of the banking industry might end up having negative implications on social sustainability and the inclusion of those in society who don’t want to or have the ability to, change alongside it.

Additionally, sustainability has become more important to the future workforce. How employers are perceived from the perspective of sustainability is, therefore, a crucial knowledge in organizations work with employer branding, which this study looks into.

1.4 Delimitations

This thesis studies potential employees, more precisely students in their last year of studies within a suitable area for a position within the banking industry. The research is also concentrated on the perceptions of the Swedish banking industry and its actors as employers.

1.5 Outline

This thesis is divided into eight different sections. The first section consists of the introduction to the research area. This section is followed by the theoretical framework and literature review.

In the second section theories and literature relevant for this thesis are presented. Section three

covers the research methodology, which tends to guide the reader through this study. In section

four, empirical findings, the results from the study are presented and in section five, analysis,

these results are being analyzed. The conclusions drawn from the results, as well as suggestions

for future research, are discussed in section six. Section seven contains the used references for

the thesis. Lastly, in section eight, the appendix can be found. The appendix consists of

calculations and compiling of the gathered data, and the questionnaire.

2. Theoretical framework and literature review

This chapter covers relevant theories and literature for the thesis. Firstly, the transformation in the banking industry is shortly presented. This is followed by explanations of innovation and digitalization theories essential for the thesis. In section 2.2 the reader gets an

introduction to employer branding, which is further explained in 2.2.1. Lastly, in 2.2.2, the value proposition framework, which constitutes the outset of the study's survey, is discussed.

2.1 Transformation in the banking industry

A report published by Accenture (2019) shows that 23% of the companies in the Nordic banking industry have entered the market after 2005. Even though the traditional banks might not take the threat of these newcomers seriously, they are losing large market shares in all Nordic countries except Denmark. Revenues are starting to move to these newcomers with digital and innovative solutions and traditional banks can not afford to fall behind.

2.1.1 Innovation

Innovation involves the creation of a structure and culture of an organization that is open to change and transformation. By shifting the creation of innovation into a disciplined science matter this will have a strong impact on the innovation's success rate, outcome and effect (Keeley et al., 2013). Renewal is crucial for organizations to be able to both meet and even exceed the expectations that exist among the different stakeholders, such as potential employees. Without renewal and innovations, the organization's sales stagnate and they might end up compromising their future survival. Innovation is important in all industries in different stages, such as the creation and diffusion of technologies that are crucial for economic growth and welfare. (Woensel et al., 2016).

Two different types of innovation can be acknowledged for products or services. Firstly,

incremental innovation refers to doing the same as before, but better. This type of innovation

is created within an already given frame of solutions. Secondly, radical innovation is done

when organizations are doing what they have never done before, which means that a new frame

is created and implemented. The difference between the two of them is whether innovation is

developing already accepted practices or if it is unique and disruptive. Even though radical

innovation is the category that is mainly discussed in innovation studies, the success of this

type is rare. Because of its uniqueness, radical innovation is often hard to use and expensive

when introduced. Therefore, incremental innovation is often needed to transform radical ideas

to the customer market and to capture value. Incremental innovation is often an ongoing

process that renews products or services. The changes might be small but results in lower cost,

more attractive products or improved performance. (Norman & Verganti, 2014). Neoclassical

theory shows that newcomers in an industry are more likely to invest in radical innovation and

thereby replace incumbents. Radical innovation can in that way shaken an entire industry with

technological change. On the other hand, incumbents are better than newcomers at investing in

incremental innovation. However, the incentives to invest in incremental innovation depends

on the state of the market. If the market is characterized by a degree of monopoly power, incumbents are less likely to invest in innovation. If the market opens up and gets more competitive, there are more incentives to devote resources to innovation. (Henderson, 1993).

Graeme et al., (2011) argues that an organization not only has to be innovative in order to attract, engage and retain talented employees but also be known for being innovative. Hence, to reach radical and incremental change, a strong employer brand is crucial for an organization.

High-quality people contribute to and impact on the incentives for innovation (Graeme et al., 2011).

2.1.2 Digitalization

Digitalization and digital transformation have been present since the 1950s and many organizations are required to incorporate it as a core strategy to be competitive. Digital transformation refers to the use of digital technologies to impact business and society. It is a process where customer experiences, business model and operational processes are digitized (Heavin & Power, 2018). According to Matt. et. al. (2015), a digital transformation strategy involves all parts of an organization and serves as a central part of coordinating the digitalization process. Independent if it is done in an industry or an organization, a digital transformation strategy has certain aspects that are essential. Firstly, the use of technology relates to attitudes and perceptions toward new technologies. Meaning an industry or organization's future technology ambitions and their ability to implement new technology.

Secondly, from an organization's perspective, new technologies affect value creation. This involves how far the digital transformation strategies lie from the actual core business.

Introducing new technologies creates opportunities to expand or improve the organization’s products or services, it can lead to new unexplored market or customer segments. Thirdly, the organization's structural setup is affected by the new value creation. Consequently, structural changes are needed for an operational basis, especially concerning where the new digital activities are placed within the organization's structure. Lastly, a digital transformation and the previous three steps can not be implemented if the financial aspects are not considered. This aspect is both a driver and an anchor in the digital transformation process as the organization's ability to finance the changes are essential. (Matt. et. al., 2015).

The benefits of implementing technologies are many, including increased sales, better customer experiences and increased productivity. It can lead to the entire business model being replaced or reshaped, as well as new business opportunities. (Heavin & Power, 2018). However, Matt.

et. al. (2015) argues that to successfully enroll the digital transformation it is crucial to align the four transformation dimensions, the use of technology, value creation, structural changes and financial aspects.

2.2 Attracting the right talents

Acquiring talented and skilled employees are highly important for all organizations. Employees

are one of the most important variables for an organization's success. In today's competitive

environment, a prominent problem that organizations are struggling with is to attract and retain these talents. (Manisha & Agarwal, 2018). Dabirian et al., (2019) argue that employer branding is an efficient strategy for organizations to gain an advantage in a more competitive employment market.

2.2.1 Employer branding

Market trends, such as globalization, digitalization and innovation have contributed to transformations and developments of different industries. Due to this, the work with attracting talents have become more and more complex. (Robinson, 1998). Nowadays, the employees almost have the entire world as their potential labor market. When it comes to digitalization and innovation, potential employees have the possibility to easily compare and stay up to date with the most attractive employees locally, nationally and globally. (Andrus et al., 2016).

Research shows that these market trends have created a shift in communication and behavior through the increasing possibility of global integration and international exchanges (Robinson, 1998). Through this globally increasing technological change, companies’ ability to improve efficiency and production has developed radically. This has also increased competition within the different markets. Furthermore, the competition of employees has also increased from a local market to the global market. According to Dyhre and Parment (2013), one of the largest challenges in the future for organizations will be to find, attract and retain the right talents.

Research shows that a strong employer brand is crucial in a constantly changing environment.

The organizations that succeed to maintain a strong and solid employer brand and consequently manage to attract the best employees can use this as a competitive advantage (Bellido et al., 2014).

The concept of employer branding comes from the marketing field and was adopted to the human resources field. There are several different definitions of employer branding and the view of it has changed over time as the body of research has increased. It was early formulated by Ambler and Barrow (1996) who defined it as “the package of functional, economic and psychological benefits provided by employment and identified with employing companies”

(p.187). They introduced employer branding as an identity that described the employer, whether that brand was perceived as negative or positive. Later definitions of employer branding describe the concept as a continuous process. These definitions identify a need to promote a desirable view of the company and explains how they differentiate from their competitors. (Backhaus & Tikoo, 2004). Employer branding is beneficial when a company is perceived as a great place to work. The view of the company is decided by the beholder, which is current employees, key stakeholders and the external market (Dabirian et al., 2019).

According to Backhaus and Tikoo (2004), the employer brand process has three steps, value

proposition, internal marketing and external marketing. Firstly, the company needs to develop

a strong value proposition that explains the exact value they offer. This can among other be

determined by looking at the company's culture, qualities of current employees and

management styles. The second aspect, internal marketing affects the employee's commitment

to the companies values and goals. This is important to make sure that the promise made to new employees is carried out in the organization. Thirdly, external marketing, shows how the company can target potential employees. Talents will be attracted to brands with an employer brand that creates a perception of the company as the best choice. (Backhaus & Tikoo, 2004).

Most employer branding research is focusing on external marketing because it is directly tied to recruiting employees. To recruit the right talents, organizations aim to create a positive employer brand association. A brand association is the feeling towards a brand, the emotional response to the information that the organization communicates. The key is to differentiate the employer’s image from other brands so the potential employee can understand and identify themselves with the organization's values. If the organization manages to create a strong brand image it will attract potential employees and encourage them to apply. (Backhaus, 2016).

2.2.2 Value proposition framework

Employer Value Proposition, EVP, can be described as the company’s value creation for potential and existing employees (Dyhre & Parment 2013). According to Dyhre and Parment (2013), a company needs to know the employees as well as its strategic direction to be able to develop a sustainable and attractive employer value proposition. To be able to reach an engaging and attractive EVP there must also be an understanding of what potential employees value when choosing a future employer and what existing employees value at their workplace.

Furthermore, it is important that the employees' values must be congruent with the company’s offerings to create engagement for the employer brand. Engagement for an organization's employer brand can be encouraged by a successful EVP that in turn can attract potential employees to be a part of the organization. (ibid). Dyhre and Parment (2013) also reason around what attractive employers actually do and what it is that makes employers attractive.

Value proposition frameworks are seen as the spine of employer branding. By designing an employment offer based on value propositions, organizations can gain an advantageous position in the competitive talent market. (Sengupta et al., 2015). Sengupta et al. (2015) argue that the value propositions for internal and external employer branding need separate focuses and that the right value proposition will attract the right talents. Hence, potential differences between age, gender and types of organizations might exist that need to be taken into consideration (ibid). The study by Sengupta et al. (2015) concentrates on both current and potential employees of the Indian workforce in contradiction to this study which only intends to look at potential employees for the Swedish banking industry.

Dabirian et al., (2019) presents eight employer value propositions for employer branding that

employees find important when evaluating employers. These eight employer value

propositions are illustrated in Figure 1.

Figure 1 Eight value propositions for employer branding. (Dabirian et al., 2019, p.86)

The first value proposition refers to the fulfillment employees gather from working together

with others, called social value. This value proposition shows that employees care heavily

about organizational cultures focusing on people. Interest value is about how challenging and

achievable employees perceive tasks and requirements. It also includes if the work desires

openness to new ideas, changes and innovation. The third value proposition, application value,

stress the importance of being involved in the progress of their employer through innovation

and high-quality competence. Application value relates to the significance of applying the

knowledge and skills of the employees in a relevant way. Career growth and possibilities of

professional development are presented as development value. Economic value includes both

compensations such as salary but also different kinds of employee benefits, like job security,

holidays and medical perks (Berthon et al., 2005). Qualities of leadership, managers'

competence, vision and ability to motivate and inspire people is called management value. The

seventh value proposition emphasizes the aspiration to have a balance between work-related

and nonwork-related commitments, work-life balance. (Dabirian et al., 2019) The last and the

most recently added employer value proposition that Dabirian et al., (2019) discuss is brand

image. Brand image is how the company’s brand as an employer is perceived by potential and

current employees. It also describes employees' desire to work for a “cool” and innovative

company. The presented value propositions all matter and are seen to be of high importance

for employees, but not to the same extent. The research made by Dabirian et al., (2019) focuses

on the understanding of employer attractiveness of IT companies. Their result shows that IT

professionals praise social and economic value the most and that management value, the factor

most complained about, is the main reason for people leaving or staying at a workplace. Brand

image was also seen as a major complaint factor due to the gap between what the company

conveys externally and how they actually deliver on that promise. What is valued the most is

expected to vary between different industries. (Dabirian et al., 2019). Therefore, this study will

investigate how these value propositions are ranked in the Swedish banking industry. These

eight value propositions for employer branding constitutes the outset of the study’s survey and

the questions being asked in it. This will be described further in the chapter below.

3. Research methodology

The following section is presenting this thesis methodology. Initially, the research purpose, approach and strategy are explained. Further, data collection, design of questionnaire, sample selection and data analysis are described. The advantages and disadvantages of the strategic selections that have been made are also discussed. Lastly, the methodology section is concluded by addressing quality, limitations, ethical aspects and choices of theory conducted in the thesis.

3.1 Methodological considerations

Saunders, Lewis and Thornhill (2015) present four different research; exploratory, descriptive, explanatory or evaluative, that can be used individually or as a combination. This thesis intends to gain insights about what potential employees find valuable when evaluating an employer within the Swedish banking industry and, consequently see it as a great place to work. The study also aims to give a deeper understanding of possible differences between what potential employees value when choosing an employer depending on if it is a traditional bank or digital bank. An explanatory study often determines causal relationships between variables and the emphasis of it is to analyze the situation or problem to be able to explain this relationship (Saunders et al., 2015) . Conclusively, the appropriate research can be acknowledged as explanatory.

3.2 Research approach

There are three main approaches for research, deductive, inductive and abductive. When a research starts with the development of a theory and the research strategy is designed to test the theory, a deductive approach is being used. In most cases, the theory is tested through a series of propositions, which in turn will be tested through collection and analysis of quantitative data (Saunders et al., 2015). Looking at how this thesis is structured it can be seen to have a deductive approach since academic literature was comprehensively examined to design a framework followed by the collection of new primary data. According to Saunders et al., (2015) a deductive approach is usually associated with a quantitative research method.

Therefore, a quantitative research method was chosen for this study in order to gain insights into what potential employees value when choosing an employer within the Swedish banking industry and the potential differences they present considering its various actors.

3.3 Research strategy

To answer the research questions, both a quantitative research, a qualitative research or a mixture of both can be used. As this thesis research intends to generalize the opinion of a larger population from a smaller sample group, a quantitative research method was seen as more appropriate. A quantitative research method is characterized by a numerical procedural, meaning that it collects and analyzes data that can be denoted by numbers (Eliasson, 2013).

This type of research is chosen since it is considered to offer consistent, unbiased and

Nevertheless, there are disadvantages to using a quantitative study. For example, the researchers are dependent on a large number of people to be able to collect significant data and the limited number of questions might generate information that is not detailed enough (Sanders et al., 2015)

Additionally, the research has been discussed with a company within the industry that has shown interest in the thesis result, the digital bank Marginalen bank. They have contributed with their knowledge from the banking industry and their network in some parts of the research, which will be further discussed later in this chapter.

3.4 Data collection

To collect valid and reliable data, a survey strategy has been chosen. A quantitative survey can be used to explore the relationship between behaviors and attitudes for example products or companies, therefore it is seen as valuable for employee surveys. The main advantage of conducting a survey is its wide reach and that it enables researchers to gather large and significant data in an easy, quick and cost-efficient way. The disadvantages of conducting a survey are mainly that the questions asked can lead to inaccurate data and possible survey fatigue can lead to response bias. Several different techniques can be used in a survey strategy, a questionnaire is carried out in this study (Saunders et al., 2015). Further, this study is a mono method quantitative study since only one technique was used to collect data.

The questionnaire type is a self-completed questionnaire, meaning that it is answered by the responder themself (Saunders et al., 2015). This type of questionnaire is beneficial since the researchers are independent of the responder and therefore the data is more objective. It is important to consider what distribution channels are used to reach the target sample. This study’s st was distributed by master students from The Royal Institute of Technology and the digital bank Marginalen bank through the internet, more specifically social media and e-mail.

Marginalen bank distributed the questionnaire to their student network by e-mail and shared it on LinkedIn. Additionally, the master students from The Royal Institute of Technology shared the questionnaire on the social media platforms LinkedIn and Facebook. These platforms were chosen since the targeted sample is considered to visit them frequently. Using the internet as a distribution channel creates an opportunity to reach a larger population that is geographically dispersed (Saunders et al., 2015). Furthermore, it can be assumed that the target sample has easy access to the internet.

3.4.1 Sample selection

To get an understanding of what is valued when choosing an employer in the banking industry,

this study aims to question potential employees. Students at universities in Sweden that are

studying their last year are assumed to search for their first job and are a big recruitment source

for companies within the banking industry. Therefore, they were considered a suitable sample

population. The respondents to the survey are between the ages of 18-30 and are studying within an area that can be seen as suitable for employment within the banking industry.

Examples of studies are industrial economics, management, business and technological fields.

Experience from a bachelor or a master within these areas is often requested in banking job applications and that is why these respondents are assumed to be suitable for this survey. (SIKI, 2018) It is challenging to estimate the exact number of people that are included in the target population, and there is no available sample frame, which is a list of the population’s cases.

However, according to SCB (2019), 7562 people graduated from an economics and business education and 4484 people graduated from a master of science in engineering in 2018/2019.

Assuming that approximately the same number of students will graduate in 2020/2021, the population can be assumed to be approximately 12 046 people.

When it is not possible to collect data from the entire population, a sample is a valid alternative.

Since it would be both time-consuming and impractical for this study to reach the entire population, the sampling alternative was used. There are two methods that can be used to define a target sample, probability sample or non-probability sample. To conduct a probability sample, there is a need for a sample frame (Saunders et al., 2015). As mentioned in the previous paragraph, a sample frame was not available for this study and therefore a non-probability sample was conducted. The sampling technique was a volunteer sample, more specifically self- selection sampling where the respondents identified their own desire to answer the survey (Saunders et al., 2015).

It was decided beforehand that the survey for this thesis would be active for 3 weeks. Hence, the answers were conducted online between the 24th of March and 14 of April, 2020. When the survey closed it had 110 respondents in total, who all completed the entire survey. Thus, 100 out of these 110 responses could be used for further analysis. As this thesis aimed to understand the opinion of potential employees that are studying their last year at the university, non-students were excluded. Therefore, 10 responses did not fit the target sample. The sample size for the survey was in line with the size of the population and can, therefore, provide a sufficient picture for the entire population.

3.4.2 Design of questionnaire

The questionnaire of this study was created in google forms, an online tool for creating surveys.

This tool was chosen because of its convenient functions and cost-effective alternatives.

According to Saunders et al., (2015), the questions designed in a questionnaire will affect both

the response rate, the validity and reliability of the study. Therefore, the formulation and order

of the questions have been carefully constructed. A questionnaire can be conducted both by

having open questions, where the respondent formulates answers themselves or closed

questions where the respondent can choose from different alternatives (Eliasson, 2013). The

questionnaire for this study mostly consists of closed questions. This was chosen since closed

questions make it more convenient for the respondent to answer the questionnaire, further the

answers are easier to process and compare. However, it is not possible to gather answers that are not fixed, which can lead to valuable information being lost (Bryman & Bell, 2015).

The questions were divided into three different sections, with a total of seven questions. The

first section asked the respondent to answer general personal questions. This was done to

guarantee that the respondent fulfilled the requirements of the target sample, which is explained

under section 3.4.1 Sample selection. This first section consisted of four questions, three

multiple-choice questions and one open-end question. The other two sections focused on

potential employees' perceptions of the banking industry. The structure of these two sections

were based on employer branding theory, more specifically Dabirian et al., (2019) eight

employer value propositions. For each value proposition, there are two clarifications that

further explains its meaning. These clarifications will further on be called concepts. Dabirian

et al., (2019) eight employer value propositions were considered to contribute to a suitable

structure for this research and survey because of its analysis and insights within this area. The

study of Dabirian et al., (2019) identifies and illustrates what IT professionals, current and

former employees, value the most when evaluating IT employer, and gives recommendations

for how IT employers can use these findings to attract and retain IT talents. Their study has

been used as an outset in order to investigate what potential employees care about when

evaluating an employer within the banking industry.

Value Proposition Concept

1. Social value Colleagues

Culture

2. Interest value Interesting tasks Challenging tasks

3. Application value Meaningful work

Possibility to make an impact

4. Development value Grow professionally Possibility to advance

5. Economic value High salary

Employee benefits (job security, holiday, and so on)

6. Management value Competence of manager

Managers ability to motivate employees

7. Work-life balance Flexible work times

Encourage work-life balance

8. Brand Image External perception of brand Innovative brand

Figure 2 Value Propositions and concepts used in this study.

In the first of these two sections, the respondents were asked to reflect on how they value the

different concepts when evaluating an employer in the banking industry. The data from this

question was intended to answer what factors a potential employee perceives as valuable when

evaluating employers in the banking industry. Hence, the first research question. Prior to the

first question, the respondents were asked to read an explanation text, to make sure that they

answered the question from a banking perspective. The question consisted of 16 statements

that were measured on a seven-point scale, ranging from disagreeing and strongly agree. The

last section asked the respondents to answer questions from two different perspectives,

traditional banks and digital banks. Before answering these questions, the respondent read an

explanation text, first regarding traditional banks and then for digital banks. The purpose of the

explanation text was to give the respondent a deep understanding of the banking industry and

the two separate perspectives. Each perspective consisted of the same 16 statements based on

the concepts. The respondent answered how well each concept corresponded to their perception

research question number two and give an insight on if there is a difference in the perception of the employer depending on if it refers to traditional or digital banks. This section was also measured on a seven-point scale, ranging from disagreeing to strongly agree.

Before the questionnaire was distributed, a pre-test was conducted. This was done to make sure that the questions were clear and unambiguous. A pre-test is necessary since self-completed questionnaires are answered by the respondents themselves, there is no interviewer present to guide the respondents (Bryman & Bell, 2015). The pre-test was first sent to Marginalen bank who analyzed if the questions and the structure seemed reasonable to ask in relation to the banking industry. Thereafter, the pre-test was sent to five test persons that fitted the targeted sample. They were asked to give feedback on each question and the explanation texts. The obtained feedback was then used to change unclear and difficult questions. The revised questionnaire was sent to five other test persons, to make sure that the changes made it more understandable. The time for completing the survey was approximately 5 minutes and all respondents were anonymous.

3.5 Data analysis

The data was gathered by google forms and then transported to the software tool excel that was used to analyze the information. Before the analysis started the dataset was checked for missing data and outliers (Saunders et al., 2015). The respondents to this thesis survey were asked to rate how strongly they agree or disagree with different statements. Two different tests were conducted to analyze the data. Firstly, the frequencies were analyzed, which helped to calculate the mean and standard deviation for the ranked questions. The means of the survey's second section was then compared and ranked to understand which concepts that potential employees valued highest. This was also done with the survey's third section, where the two question's means were ranked by themselves and then compared.

Secondly, a t-test was carried out for the survey's third section to examine if there was a significant difference between how the concepts were associated with traditional banks and digital banks. A t-test is a statistical test based on the means of two different groups (Cleophas

& Zwinderman, 2011). Considering the size of the sample, a t-test was considered to be the most suitable tool for analysis. This thesis t-test is two-sided, which is typically used when analyzing if there is a difference between two populations means. Since the variances from the two groups that are compared are assumed as unequal, the test was conducted on unequal variances. The t-test was done for each concept and then analyzed together.

3.6 Reliability and validity

Reliability means that significant results must be repeatable, if other researches will conduct

the same experiment the same result should be derived (Eliasson, 2013). The survey for this

study had fixed questions and was performed in the exact same way each time it was answered.

Furthermore, several questions in the survey measured the same variable, which increases reliability.

Validity deals with the requirement of the scientific research method, more specifically that results obtained measures what it was intended to measure. One way to reach a high level of validity is to make sure that definitions of concepts have been well defined (Eliasson, 2013). It was important that the respondents answered the questions from a banking perspective, therefore an explanation text was added at the beginning of the survey and before every question. The survey was first tested on a smaller sample to verify that the questions were formulated in a clear way. The sample survey also limited the risk of misunderstanding expression and perceptions of certain words. Furthermore, the concepts had to be measurable, which has been ensured since they have been defined and compared with suitable concepts in the theory.

3.7 Limitations

There are several limitations to this study that has to be taken into consideration. Firstly, the survey has only been distributed to students pursuing their last years of studying at university.

This means that the study can not explain what potential employees with several years of working experience value when choosing an employer. Secondly, the survey is only answered by students within specific fields and can not be transferred to other fields of study.

Furthermore, the sampling technique was self-selected, which means that the respondent chose to answer the survey because they have a particular interest in working within the banking industry. Lastly, the study has been contained in Sweden and is therefore only applicable in Sweden.

3.8 Ethics

To ensure avoidance of ethical concerns and risks it is crucial to acknowledge ethical principles, such as anonymity, integrity and confidentiality (Bryman & Bell, 2015). In this research all respondents to the survey were informed about its purpose and that all responses were anonymous. Anonymity and confidentiality were ensured by excluding questions about personal data e.g. name and email address. In some cases, internet surveys may lack some anonymity since responses can be traced back to IP addresses. Therefore, the respondents were ensured that this will not be done and the obtained data is solely used for the research purpose.

Further, the data is aggregated and the result is presented in groups so no individual can be seen

in the material. Lastly, participants had the right to exit the survey and withdraw their

responses. However, the respondent who completed the survey could not withdraw their

provided data due to anonymity and technical limitations. Thereby, all completed

questionnaires that fulfilled the requirements for the target sample are used in this study.

4. Empirical findings

This chapter presents the empirical findings from the gathered data. First, the demographic sample is presented. This is followed by the result gathered for research question 1. Lastly, the result for research question 2 will be presented.

4.1 Demographic sample

As mentioned in 3.4.1 Sample selection the survey had 100 responses that could be used for further analysis. Out of the 100 respondents, 54 were men and 46 were women. Moreover, 8%

were born 1998 or after and 86% were born between 1997 and 1990. This means that the majority of the respondents belongs to the generation millennials.

4.2 Findings research question 1

In this section, the results related to the first research question are presented. As mentioned in 3.4.2 Design of questionnaire, the first research question is supposed to be answered through the findings in the survey’s second section, containing question 5. In this section, the respondents were asked to answer how they perceive the value of 16 different concepts, related to the eight value propositions, when evaluating employers in the banking industry (Appendix 1 & 2).

Following the methodology and to give a better overview, the result of research question one is foremost presented on value propositions level and secondary on a concept level. Firstly, Table 1 shows the ranking of these eight value propositions that the respondents perceive as valuable when evaluating employers in the Swedish banking industry. The 16 concepts used in the questionnaire are the basis of the respondents’ ranking, which is calculated through mean.

As presented in Table 1, the respondents perceive the value proposition development value as

the most valuable factor with a mean of 6.36 on a scale of 1-7. Development value is followed

by interest value and management value with mean values of 6.26 and 6.19. The value

proposition that is perceived as least valuable by the respondents is brand image, with a mean

value of 4.62 (Table 1).

Table 1 The respondents ranking of the eight employer value propositions and concepts

Ranking Value proposition Mean Concepts Mean

1 4. Development value 6.36 Grow professionally

Possibility to advance

6.52 6.20

2 2. Interest value 6.26 Interesting tasks

Challenging tasks

6.49 6.03

3 6. Management value 6.19 Competence of managers Motivating and inspiring managers

6.30 6.07

4 1. Social value 6.15 Culture

Colleagues

6.24 6.05

5 3. Application value 5.94 Meaningful work

Possibility to make an impact

5.97 5.90

6 5. Economic value 5.28 High salary

Other employee benefits

5.41 5.14

7 7. Work-life balance 5.18 Work-life balance

Flexible working hours

5.47 4.88

8 8. Brand Image 4.62 External perception of brand Innovative brand

4.70 4.53

Secondly, when looking at the result on concept level, the mean for each of the two individual

concepts related to a value proposition is very similarly ranked. For example, the highest-rated

concept is grow professionally with a mean of 6.52, which is related to development value. The

other concept related to development value, the possibility to advance, is also rated high with

a mean of 6.20. Looking at these two concepts they only differ with 0.32 and are therefore

representative of development value being ranked as the highest value proposition. The highest

difference, with 0.59, between the ranking of concepts can be seen between work-life balance

and flexible working hours, connected to the value proposition work-life balance. The smallest

difference can be seen between meaningful work and possibility to make an impact, connected

to the value proposition application value, on 0.07. Hence, the value propositions can represent

the ranking of what the respondents perceived as valuable when evaluating employers in the

Swedish banking industry. According to Appendix 3, the standard deviation calculated for each

concept in question 5 is close to 1. This indicates that the respondents’ answers ranged close to

the concepts calculated mean. Hence, the respondents’ answers do not differentiate to a large

extent.

4.3 Findings research question 2

In this part of the thesis, the results from the survey's third section, questions 6 and 7, will be presented. The findings from these questions intend to answer the thesis' second research question by asking the respondents to express their perceived view of both traditional banks and digital banks.

The aim of the second research question is to understand potential employees' views of the different actors in the banking industry, therefore, two separate questions were created, question 6 that focuses on traditional banks and question 7 that focus on digital banks. These two questions will be presented separately and then in relation to each other. As mentioned in the methodology chapter 3.4.2 Design of questionnaire, each question consisted of 16 statements. The respondents were asked to rank the 16 different concepts from Figure 2 on a 7 point scale in relation to traditional banks and then digital banks. The means of all 16 concepts were then ranked for traditional banks and digital banks, and the 5 highest ranked concepts are illustrated in Figures 3 and 4.

Figure 3 The 5 concepts that are most associated with traditional banks

Figure 4 The 5 concepts that are most associated with digital banks

Figure 3 shows that the concept employee benefits is most associated with traditional banks, while Figure 4 presents the concept innovative brand as most associated with digital banks.

When comparing the two figures, it can be reckoned that two of the concepts occur on both the top 5 rankings. The concepts grow professionally and possibility to advance are highly associated with both traditional and digital banks. A complete view of the 16 concepts means for both traditional and digital banks are illustrated in Figure 5 below.

Figure 5 The mean of the 16 concepts, traditional banks vs digital banks

As presented in Figure 5, the means for traditional banks range from 2.75 to 5.71, and in line with Figure 3 the concept employee benefits is most associated with traditional banks and the concept cool external image is least associated with traditional banks. Moreover, a digital bank is most associated with innovative brand which is shown by the mean of 5.94 and least associated with employee benefits that has a mean of 3.56. This figure also illustrates that traditional banks and digital banks means are different for all concepts. The difference can be small as in the concept high salary where the mean of traditional banks is 0.10 from the mean of digital banks, or big as in concept Innovative brand where the difference is 2.89. As shown in Appendix 4, the standard deviation of the concepts in both question 6 and 7 are considered low and therefore most numbers are spread close to the mean.

Table 2 T-test for all concepts Value

proposition Concepts

Mean Traditional Banks

Mean

Digital Banks P-value Significant difference?

1. Social value

Recruiting the best

talents 3.91 4.43 0.02 Yes

Team-oriented 3.93 4.99 0.00 Yes

2. Interest value

Interesting tasks 3.30 4.82 0.00 Yes

Challenging tasks 4.20 5.06 0.00 Yes

3. Application value

Possibility to make an

impact 3.10 5.06 0.00 Yes

Meaningful work 5.06 4.39 0.00 Yes

4. Development value

Grow professionally 4.91 5.16 0.18 No

Possibility to advance 4.74 5.23 0.01 Yes

5. Economic value

High salary 4.39 4.29 0.61 No

Employee benefits 5.71 3.56 0.00 Yes

6. Management value

Competence of

manager 4.52 4.87 0.06 No

Motivating managers 3.97 5.29 0.00 Yes

7. Work-life balance Work-life balance 4.23 4.33 0.65 No

Flexible work times 3.39 4.98 0.00 Yes

8. Brand Image

Innovative brand 3.05 5.94 0.00 Yes

External perception of

brand 2.75 5.13 0.00 Yes

The t-test, illustrated in Table 2, confirmed that there is a significant difference between

traditional banks and digital banks for a majority of the concepts. This is confirmed when the

p-value is lower than 0.05. Hence, potential employees associate different concepts with the

two different types of actors in the Swedish banking industry. However, the concepts grow

professionally, high salary, competence of manager and work-life balance showed no

significant difference.

5. Analysis

In this chapter, the results from the survey are connected with previously presented theories.

First of all, the results linked to the second section of the survey are analyzed. This is followed by an analysis of the results presented in the third section of the survey. Further, differences and similarities are being discussed.

5.1 What factors do potential employees perceive as valuable when evaluating employers in the banking industry?

This study shows that potential employees for the Swedish banking industry rank development value the highest (Table 1), which is related to the concepts grow professionally and possibility to advance. Grow professionally is the highest rated concept and consequently, the most valued by the respondents. The value proposition interest value, is ranked second highest among the respondents. Thus, one can argue that actors in the Swedish banking industry can benefit from promoting factors related to development value and interest value, such as possibilities to grow professionally and interesting tasks, in their external employer branding strategy. As argued in previous theory (Sengupta et al., 2015; Backhaus, 2016; Dyhre & Parment 2013) the right talents will be attracted by an employer brand that is based on the right value propositions.

Building on this, the ranking created from this study can give actors within the banking industry valuable insights about the perceptions of potential employees and how to create their external branding strategy.

The two value propositions that are found most valuable for potential employees within the banking industry differ from the value propositions mostly praised by IT professionals, social value and economic value. The respondents in this study rank social value as number 4 and economic value as number 6. This supports the argument by Dabirian et al., (2019), that what employees value most can differentiate between industries.

On the other hand, looking at the results for research question one, no value proposition has a mean under 4.62. Four out of eight value propositions are ranked above 6 on a scale from 1-7.

One can then argue that the respondents find all of these factors valuable when evaluating an employer in the Swedish banking industry. This gives an indication of that the eight employer value propositions for employer branding presented by Dabirian et al., (2019) are found important for potential employees in the banking industry as well. Due to the high requirements and multiple important factors, that play a substantial role when potential employees search for their future employer, it can be difficult to be an employer within the banking industry in 2020.

These employers have to try to live up to these requirements and build a powerful and sound employer brand. As argued by Dyhre and Parment (2013), this is one of the main challenges for organizations, to attract the right talents.

Brand image is the value proposition that is ranked lowest and has a mean of 4.62. The concepts

related to brand image are also perceived as least valuable by the respondents. In the study

made by Dabirian et al., (2019) brand image is the most recent added value proposition and therefore they see it as a valuable addition to the framework. However, this thesis research indicates that it is not seen as valuable as other value propositions to potential employees when evaluating the Swedish banking industry. In Dabirian et al., (2019) study, brand image was found to be a significant complaint factor due to a perceived gap in employers’ external employer branding and how they deliver on those promises. Hence, this value proposition can be difficult to evaluate for potential employees. Even though brand image is the only value proposition ranked under 5 it can still be considered to be important to the respondents.

Therefore, it can be interesting to investigate how brand image is valued among current and former employees since they have experience from how the company delivers on their promises. Further, there might be a difference in the perceptions of an organization's employer brand and branding towards customers that need to be observed. The fact that the employer is perceived innovative does not necessarily have to be as important for potential employees as it can be for a consumer brand building purpose.

As argued by Backhaus and Tikoo (2004) the companies that succeed to create an employer brand that is perceived as the best choice among different employers will attract talents. The potential employees’ perceptions of traditional and digital banks as employers within this industry is therefore analyzed in the following section.

5.2 Do potential employees express any differences in their perception of the employers depending on if it refers to traditional or digital banks?

According to Dabirian et al., (2019) employer branding is an efficient strategy for organizations to gain an advantage in a more competitive employment market. As mentioned in 1.1 Background, the banking industry has transformed in the last years, leading to new digital banks entering the market. Even though traditional banks and digital banks are serving the same industry and are meeting similar needs, the results from this thesis research show that there is a difference in how the actors are perceived by potential employees.

Traditional banks are most associated with the concept employee benefits, such as a secure job and vacation, which is connected to Dabirian et al., (2019) value proposition economical value.

The second highest-rated concept is meaningful work which ties to the value proposition

application value. This result is in line with Dabirian et al., (2019) study on the IT industry that

ranked economical value, together with social value and management value the highest. On the

other hand, concepts like cool external perception and innovative brand scored the lowest for

traditional banks. As illustrated in Figure 5 these two concepts are highly associated with digital

banks. According to (Keeley et al., 2013) an organization is innovative if it is open to change

and transformation. Both a cool external perception and innovative brand are connected to the

value proposition brand image. Hence, digital banks have succeeded in creating a perception

of a cool and innovative brand image, which according to Graeme et al., (2011) is necessary to