GRADUATE DEVELOPMENT PROGRAMS AS AN EMPLOYER BRANDING TOOL IN FMCG
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Table of contents 5
Introduction 6
Chapter 1. Theoretical basis of the work 10
1.1 Employer brand and related concepts 10
1.2 Y Generation: managerial context 21
1.3 Graduate development programs: theoretical background and content 25
1.4 Summary of Chapter 1: research gaps and research questions 35
Chapter 2. Empirical methods and research design 37
2.1 Step 1: Exploratory research 37
2.2 Step 2: Case studies 38
2.3 Step 3: Questionnaire 39
2.4 Step 4: Summary 42
Chapter 3. Results of empirical analysis 45
3.1 FMCG labor market overview 45
3.2 Graduate development programs in leading Russian FMCG: case study 48
3.3 The survey on graduate programs' attributes 60
3.3 Summary of the empirical part: discussion of results and recommendations 70
4. Conclusion 74
5. References 76
Appendices
Introduction 6
Chapter 1. Theoretical basis of the work 10
1.1 Employer brand and related concepts 10
1.2 Y Generation: managerial context 21
1.3 Graduate development programs: theoretical background and content 25
1.4 Summary of Chapter 1: research gaps and research questions 35
Chapter 2. Empirical methods and research design 37
2.1 Step 1: Exploratory research 37
2.2 Step 2: Case studies 38
2.3 Step 3: Questionnaire 39
2.4 Step 4: Summary 42
Chapter 3. Results of empirical analysis 45
3.1 FMCG labor market overview 45
3.2 Graduate development programs in leading Russian FMCG: case study 48
3.3 The survey on graduate programs' attributes 60
3.3 Summary of the empirical part: discussion of results and recommendations 70
4. Conclusion 74
5. References 76
Appendices
According to career portal for young professionals career.ru (2016), the demand for young professionals in Russia is growing faster than the supply of CVs. The percentage of vacancies for young specialists grew from 7,3% in 2013 to 11,4% in 2015 and 10,2% at the beginning of 2016 (career.ru, 2016). The economic crisis affected positively the demand, making the companies seek for unexperienced professionals that can be a cheaper labour force and therefore save the limited budget. However, the supply on this market is growing at lower rates - from 13,7% in 2013 to 14,3% at the beginning of 2016. The demographic hole in 90s and lack of high quality educating institutions cause great difficulties in attracting young specialists. According to gks.ru (2012), the number of young professionals (20-24 years old) in Russia will continue to decrease - from 12,3 mln in 2010/2011 to 8,5 mln in 2015/2016 and 6,6 mln. in 2020/2021. Moreover, in conditions of technological transformations, young professionals are extremely important due to new education programs introduced in universities and the ability of young people to learn quickly.
In such conditions the competition for the best young professionals is increasingly growing. And even higher is the competition for high potential students - students from best universities and with appropriate profile, unique skills that help to promote the company on a new level. This competition is observed both on national and international level: the majority of companies worldwide cite scarcity of talent as one of the top-3 problems of business, along with changing consumer needs and low demand (Hirt, Smit, 2017). For emerging markets like Russia, the situation is even more difficult: "talent in emerging economies... is scarce, expensive and hard to retain" (Dewhurst, 2012).
In Russia, we can also observe the competition for talent. 37% of vacancies on career.ru require education in Economics or Management, or similar fields. Although economic education is widespread in Russia, the quality of many education institutions are questionable, so the employers shift their preferences to certain universities. Among the most desirable for employers are such universities as MSU, Financial University Under the Government of Russian Federation, RANHiGS, Plekhanov REU and some others. (raexpert.ru, 2015)
In such conditions, it is very important for companies to attract and retain young specialists.
Speaking of target employers for the high potential students, the most popular are consulting, audit, finance and oil&gas companies. For example, in Changellenge rating (2016, 2017) McKinsey&Co is holding the first position for several years. Other leaders are such companies as Gazprom, Gazpromneft, PwC, EY, Goldman Sachs, Bain&Co. In Universum rating (2016), the first places go to Gazprom, Google, Gazpromneft, Rosneft, BMW Group, Sberbank. What makes them so popular? According to Future Today analysis (2011), popular employers can be divided into "wow-companies" - the ones that attract students thanks to their brand and values it translate (e.g. Gazprom, Google) - and "strategyzers" - companies that strategically build their relationships with potential employees(e.g. Big-4 companies). Both cases are related to the employer brand of the company, that is built of different characteristics and is being influenced by different parametres.
It can be found that FMCG industry, even though some bright market players (Unilever, Mars, L’Oreal) were presented in those ratings, is considered overall not popular. For example, in Changellenge (2017) rating FMCG industry was considered as attractive by only 20% of the respondents, but those companies as MARS and Unilever, which put plenty of efforts in communicating with younger generations, are considered as attractive for majority of respondents. In conditions of competition for talent, for this industry building an employer brand is extremely important.
The topic of employer attractiveness has been investigated since the end of the previous century (Belt, Paolillo, 1992), however, the conception of the employer brand was introduced a little later (Ambler, Barrow, 1996). Generally researchers were concentrating either on the elements of attractiveness for potential employees (Berthon et al., 2005; Reis, Braga, 2016), impact of employer brand on the existing employees (Sokro, 2008; Wahba, Ehmanadily, 2015) or the strategic recommendations for the company to develop employer brand (Bhatnagar, Srivastava, 2008; Gaddam, 2008). However, few researchers concentrated on particular HRM practices and their impact on the employer brand (Ewerlin, 2013). Also, only a limited number of articles is dedicated to the market of young specialists in Russia (Kucherov, Zamulin, 2016), even though companies are paying increasingly higher attention to practices of attracting and retaining young professionals.
One of the practices that is currently introduced widely in Russian FMCG are graduate development programs. That programs were adopted from the Western market where they have been implemented since the middle of XX century (Pyron, Flanagan, 1970). It is a program for recent graduates who don't have many work experience, but have a high potential to become a manager in the nearest future. Such programs traditionally have some distinctive features, as rotations inside and across various departments, limited duration (1-3 years usually), possibility to become a manager over a few years (Harris, Field, 1992; Burke, 1997; Malik, Singh, 2014). Such programs allow to grow talent inside the company and form a reserve pool of managers for the future (Harris, Field, 1992; Kuok, Bell, 2005). As far as such programs are becoming increasingly popular, it is an interesting idea to consider it as an instrument of attracting young specialists and building an employer brand. Various aspects of graduate development programs and other learning practices for students and young specialists have been discussed in literature (Cupps, Olmosk, 2005; Cappelli, 2008; Latukha, 2011; Maertz Jr et. al., 2013; McHugh, 2017), which allows to distinguish components that attract young specialists to the company.
This work’s aims to fill the gap in the researches considering companies’ activities on the young professionals market, particularly graduate programs in FMCG in Russia. The goal of the work is to develop recommendations for FMCG companies that have launched graduate development programs or plan to do it to attract young specialists.
To do it, the following objectives will be accomplished:
- To analyze the theoretical concepts of employer brand and graduate development programs;
- To draw out the main aspects of graduate development programs that are discussed in the literature and may affect the employer attractiveness for young specialists;
- To draw out the problems and trends on FMCG labor market;
- To study the current practices of FMCG companies in graduate programs that enhance employer brand;
- To develop a questionnaire based on literature review and previous research and find out the opinion of young specialists about the importance and attractiveness of certain attributes of graduate development programs;
- Analyze the results and compare the opinion of young specialists and actual practices.
In the Chapter 1, we will define the key terms that are important for this area of research, identify the criteria of employer brand based on literature sources, prove the importance of employer brand for organizational performance, summarize the works on the topic of employer branding for attracting young specialists, analyze concrete strategies that are suggested by scholars and practitioners and give a theoretical overview of graduate programs as part of HR branding. In Chapter 2, we will introduce research methods of this paper. In Chapter 3, we will give the results of our analysis.
In such conditions the competition for the best young professionals is increasingly growing. And even higher is the competition for high potential students - students from best universities and with appropriate profile, unique skills that help to promote the company on a new level. This competition is observed both on national and international level: the majority of companies worldwide cite scarcity of talent as one of the top-3 problems of business, along with changing consumer needs and low demand (Hirt, Smit, 2017). For emerging markets like Russia, the situation is even more difficult: "talent in emerging economies... is scarce, expensive and hard to retain" (Dewhurst, 2012).
In Russia, we can also observe the competition for talent. 37% of vacancies on career.ru require education in Economics or Management, or similar fields. Although economic education is widespread in Russia, the quality of many education institutions are questionable, so the employers shift their preferences to certain universities. Among the most desirable for employers are such universities as MSU, Financial University Under the Government of Russian Federation, RANHiGS, Plekhanov REU and some others. (raexpert.ru, 2015)
In such conditions, it is very important for companies to attract and retain young specialists.
Speaking of target employers for the high potential students, the most popular are consulting, audit, finance and oil&gas companies. For example, in Changellenge rating (2016, 2017) McKinsey&Co is holding the first position for several years. Other leaders are such companies as Gazprom, Gazpromneft, PwC, EY, Goldman Sachs, Bain&Co. In Universum rating (2016), the first places go to Gazprom, Google, Gazpromneft, Rosneft, BMW Group, Sberbank. What makes them so popular? According to Future Today analysis (2011), popular employers can be divided into "wow-companies" - the ones that attract students thanks to their brand and values it translate (e.g. Gazprom, Google) - and "strategyzers" - companies that strategically build their relationships with potential employees(e.g. Big-4 companies). Both cases are related to the employer brand of the company, that is built of different characteristics and is being influenced by different parametres.
It can be found that FMCG industry, even though some bright market players (Unilever, Mars, L’Oreal) were presented in those ratings, is considered overall not popular. For example, in Changellenge (2017) rating FMCG industry was considered as attractive by only 20% of the respondents, but those companies as MARS and Unilever, which put plenty of efforts in communicating with younger generations, are considered as attractive for majority of respondents. In conditions of competition for talent, for this industry building an employer brand is extremely important.
The topic of employer attractiveness has been investigated since the end of the previous century (Belt, Paolillo, 1992), however, the conception of the employer brand was introduced a little later (Ambler, Barrow, 1996). Generally researchers were concentrating either on the elements of attractiveness for potential employees (Berthon et al., 2005; Reis, Braga, 2016), impact of employer brand on the existing employees (Sokro, 2008; Wahba, Ehmanadily, 2015) or the strategic recommendations for the company to develop employer brand (Bhatnagar, Srivastava, 2008; Gaddam, 2008). However, few researchers concentrated on particular HRM practices and their impact on the employer brand (Ewerlin, 2013). Also, only a limited number of articles is dedicated to the market of young specialists in Russia (Kucherov, Zamulin, 2016), even though companies are paying increasingly higher attention to practices of attracting and retaining young professionals.
One of the practices that is currently introduced widely in Russian FMCG are graduate development programs. That programs were adopted from the Western market where they have been implemented since the middle of XX century (Pyron, Flanagan, 1970). It is a program for recent graduates who don't have many work experience, but have a high potential to become a manager in the nearest future. Such programs traditionally have some distinctive features, as rotations inside and across various departments, limited duration (1-3 years usually), possibility to become a manager over a few years (Harris, Field, 1992; Burke, 1997; Malik, Singh, 2014). Such programs allow to grow talent inside the company and form a reserve pool of managers for the future (Harris, Field, 1992; Kuok, Bell, 2005). As far as such programs are becoming increasingly popular, it is an interesting idea to consider it as an instrument of attracting young specialists and building an employer brand. Various aspects of graduate development programs and other learning practices for students and young specialists have been discussed in literature (Cupps, Olmosk, 2005; Cappelli, 2008; Latukha, 2011; Maertz Jr et. al., 2013; McHugh, 2017), which allows to distinguish components that attract young specialists to the company.
This work’s aims to fill the gap in the researches considering companies’ activities on the young professionals market, particularly graduate programs in FMCG in Russia. The goal of the work is to develop recommendations for FMCG companies that have launched graduate development programs or plan to do it to attract young specialists.
To do it, the following objectives will be accomplished:
- To analyze the theoretical concepts of employer brand and graduate development programs;
- To draw out the main aspects of graduate development programs that are discussed in the literature and may affect the employer attractiveness for young specialists;
- To draw out the problems and trends on FMCG labor market;
- To study the current practices of FMCG companies in graduate programs that enhance employer brand;
- To develop a questionnaire based on literature review and previous research and find out the opinion of young specialists about the importance and attractiveness of certain attributes of graduate development programs;
- Analyze the results and compare the opinion of young specialists and actual practices.
In the Chapter 1, we will define the key terms that are important for this area of research, identify the criteria of employer brand based on literature sources, prove the importance of employer brand for organizational performance, summarize the works on the topic of employer branding for attracting young specialists, analyze concrete strategies that are suggested by scholars and practitioners and give a theoretical overview of graduate programs as part of HR branding. In Chapter 2, we will introduce research methods of this paper. In Chapter 3, we will give the results of our analysis.
The goal of this work was to develop managerial recommendations for FMCG companies that have launched graduate development programs or plan to do it to attract young specialists. To achieve this goal, several steps were conducted:
- The theory behind employer branding, graduate development programs and their relationship was analyzed;
- The main aspects of graduate programs that influence attraction, satisfaction and retention of young specialists were drawn;
- The expert interview was held to investigate deeper the FMCG labor market, its tendencies and problems in working with young specialists;
- Practices of the most attractive FMCG employers towards graduate development programs were analyzed;
- The questionnaire was developed on the basis of literature review and in-depth interview and results analyzed;
- The recommendations for FMCG companies that launch graduate programs have been developed on the basis of the empirical data.
The main practical contribution of the work are recommendations developed on the basis of analysis. The main scientific contribution of the work is that in the first time the graduate development programs were analyzed as an employer branding tool. Since that programs are now popular in Russia, it is a good start.
This study also had several limitations that may be solved in further research. The first one is that only potential candidates participated in the survey. In future researches, it is possible also to make a survey for current participants of the program to find out if the brand promises are fulfilled in the programs. We could also conduct interviews with HR managers of selected companies: that could give us more insights from the employers’ side. Also, it is possible to distinguish only high potentials among the respondents to gain more specific opinion. The other disadvantage is that study was of descriptive nature; however, it can serve as a base for a deeper research. For example, there is a possibility to explore the attitude towards a company as an employer before and after launching a graduate program to find out the relationship between different components of a program design and its attractiveness as an employer. However, such research requires a lot of time, moreover, the appropriate company or better several companies should be chosen for observation, so the researcher should know which companies are planning to launch a graduate program. The most relevant results in such research would be got from observation of the situation over years (a panel observation). Finally, there is still a question if students and recent graduates will be interested in usual starting positions if attracted to graduate development programs. The intuitive answer is yes - being interested in development program, they will find out more information about the company, and even in case of not fitting to the program they will be willing to apply for starting position. However, that statement needs to be proved by empirical research. The possible option is to conduct a research on candidates that failed to get to development program: whether they are still interested in the company or not.
This study gives some recommendations about how companies can attract young specialists to the graduate development program. However, companies need to remember, that they need not only to attract workers, but also to retain them. When the employee comes to company, that made a compelling promise, he expects it to keep the promises. Otherwise, the level of dissatisfaction will be very high.
- The theory behind employer branding, graduate development programs and their relationship was analyzed;
- The main aspects of graduate programs that influence attraction, satisfaction and retention of young specialists were drawn;
- The expert interview was held to investigate deeper the FMCG labor market, its tendencies and problems in working with young specialists;
- Practices of the most attractive FMCG employers towards graduate development programs were analyzed;
- The questionnaire was developed on the basis of literature review and in-depth interview and results analyzed;
- The recommendations for FMCG companies that launch graduate programs have been developed on the basis of the empirical data.
The main practical contribution of the work are recommendations developed on the basis of analysis. The main scientific contribution of the work is that in the first time the graduate development programs were analyzed as an employer branding tool. Since that programs are now popular in Russia, it is a good start.
This study also had several limitations that may be solved in further research. The first one is that only potential candidates participated in the survey. In future researches, it is possible also to make a survey for current participants of the program to find out if the brand promises are fulfilled in the programs. We could also conduct interviews with HR managers of selected companies: that could give us more insights from the employers’ side. Also, it is possible to distinguish only high potentials among the respondents to gain more specific opinion. The other disadvantage is that study was of descriptive nature; however, it can serve as a base for a deeper research. For example, there is a possibility to explore the attitude towards a company as an employer before and after launching a graduate program to find out the relationship between different components of a program design and its attractiveness as an employer. However, such research requires a lot of time, moreover, the appropriate company or better several companies should be chosen for observation, so the researcher should know which companies are planning to launch a graduate program. The most relevant results in such research would be got from observation of the situation over years (a panel observation). Finally, there is still a question if students and recent graduates will be interested in usual starting positions if attracted to graduate development programs. The intuitive answer is yes - being interested in development program, they will find out more information about the company, and even in case of not fitting to the program they will be willing to apply for starting position. However, that statement needs to be proved by empirical research. The possible option is to conduct a research on candidates that failed to get to development program: whether they are still interested in the company or not.
This study gives some recommendations about how companies can attract young specialists to the graduate development program. However, companies need to remember, that they need not only to attract workers, but also to retain them. When the employee comes to company, that made a compelling promise, he expects it to keep the promises. Otherwise, the level of dissatisfaction will be very high.