Investigating the relationship of employer branding to retention and attraction: A structural equation modelling approach

Abstract

One of the biggest challenge faced by firms in today's world is to strategically align their HR functions and marketing functions, specifically employer branding, to attract and retain talent in the competitive labour market. The present paper investigates how organizational branding appears as a powerful instrument for attracting and retaining manpower in the banking industry. A sample survey among 304 employees working in 17 commercial banks of Kolkata district, West Bengal has been conducted during May-June 2023. Three constructs namely, Organisation Branding (15 items), Employee Attraction (9 items) and Employee Retention ( 9items) are studied with fivepoint Likert scales. Scales are validated using exploratory and confirmatory factor analysis with the help of IBM SPSS and AMOS. Organisational Branding settles with three factors -Interest & Application Value, Social Value, and Economic & Development Value. Two separate constructs are formed for Employee Attraction by 5 valid items and Employee Retention by 6 valid items. A measurement model under Structural Equation Modelling (SEM) depicting the relationship between Organizational Branding (Three factors) and Employee Attraction as well as Employee Retention is developed and validated. Results show that the Social Value of branding has no significant impact on retention and attraction. However, a revised model (removing the factor Social Value) confirms that Interest & Application Value and Economic & Development Value enhance Retention (Std. Regression Coefficients are 0.42 and 0.62 respectively) and Attraction (Std. Regression Coefficients are 0.59 and 0.42 respectively) significantly. This is also interesting to note that Interest and Application Value attracts employees more than the Economic & Development Value, whereas the latter is more powerful than the earlier one in retaining employees in the banking sector.