In the ever-competitive arena of recruiting top talent, companies are increasingly looking at different avenues that can give them a competitive advantage in attracting high caliber employees. A Canadian study examined the effect of innovative perks, training opportunities, and company ethics on the attractiveness of companies to prospective employees and found that all three of these elements increased company attractiveness. Some interesting relationships between these three elements were also found.
Key Topics: Innovative perks; Training; Company ethics; Employee attraction; Organizational attractiveness.
Title of Reviewed Article: What most attracts potential candidates? Innovative perks, training, or ethics?
Researchers: Stéphane Renaud (University of Montreal), Lucie Morin (University of Quebec), and Anne Marie Fray (ESCEM School of Business and Management).
Publication: Career Development International, Vol. 21 No. 6, pp. 634 – 655.
Setting the Scene
Recruiting top talent is of central importance for most companies (Allen, Bryant & Vardaman, 2010), as companies that attract the best caliber employees have a competitive advantage (Ployhart, 2006), and the attractiveness of companies to potential employees is central to getting the right employees onboard. Organizational attractiveness to potential candidates encapsulate various instrumental tangible factors (e.g. high compensation) as well as symbolic intangible factors (e.g. being a paternal employer), and can define a company’s employer brand (Jain & Bhatt, 2015).
According to signaling theory (Connelly, Certo, Ireland & Reutzel, 2011), company attributes act as a signal to potential applicants about the company’s working environment and conditions. Companies that actively encourage diversity, for example, may signal to potential employees that the company has an open culture and working environment (Olsen, Parsons, Martins & Ivanaj, 2016). Along similar lines, the researchers of this study suggest that the attributes of innovative perks, the availability of training opportunities, and an ethical climate may signal to potential employees that the company values the welfare of its employees and promotes ethical behavior in the workplace.
Innovative perks are designed to assist employees in addressing issues that may arise in their lives outside of work (Milkovich et al., 2013), in new and innovative ways. The positive effect of innovative perks (e.g. onsite medical clinics or gyms), which many companies offer (Hall, 2012), has been demonstrated by various studies. For example, a study by Lima (2007) found that introducing an employee concierge service led to significant decreases in employee turnover.
In addition to innovative perks, prospective employees are also likely to consider training opportunities and ethics. Ethics refers to the perception of ethical practices, procedures and norms of a company (Schwepker, 2001) and has been shown to be an important factor in the perception that individuals have of companies. Various prior studies have also demonstrated a link between training and development opportunities and applicant attraction (Allen & O’Brien, 2006; Terjesen, Vinnicombe & Freeman, 2007).
The researchers put forward the following research hypotheses to further examine this subject area:
Hypothesis 1 – “Potential candidates are more attracted to an organization offering innovative perks than to an organization not offering innovative perks.”
Hypothesis 2 – “Potential candidates are more attracted to an organization offering many training opportunities than to an organization offering few training opportunities.”
Hypothesis 3 – “Potential candidates are more attracted to an organization where ethics is very important than to an organization where it is less important.”
Hypothesis 4 – “There is an interaction effect among organizational attributes. Potential candidates are more attracted to an organization offering a combination of innovative perks, training and ethics than one not offering a combination.”
How the research was conducted
339 final year business undergraduates from two Canadian universities participated in this study.
The study used an experimental design to examine job attributes of interest to potential employees. The participants were presented with one of eight scenarios relating to three organizational attributes, namely innovative perks, training, and ethics. For example, in one scenario the company offered no innovative perks, but had many training opportunities and ethics were a priority for the company.
Participants completed a questionnaire relating to the attractiveness of the scenario they had been presented with, as well as providing details in relation to their career goals, education, age, and gender.
Key Research Findings
Results indicated that when companies offered innovative perks this significantly increased their attractiveness to potential employees, and as such Hypothesis 1 was supported.
Attractiveness also increased as training opportunities offered increased and the importance of ethics for companies increased. Thus, both Hypotheses 2 and 3 were supported.
When only one of the three attributes was offered, the results indicated that ethics was the most attractive attribute to potential employees, followed by training, and then innovative perks.
Only partial support was found for Hypothesis 4, as only two combinations of attributes were found to be complimentary, which were innovative perks & training and innovative perks & ethics.
Interestingly, offering innovative perks only had a positive effect on applicant attraction when there were limited training opportunities offered while there was no attraction effect when many training opportunities were offered.
In relation to the innovative perks and ethics relationship, offering innovative perks had a positive effect on applicant attraction only when ethics was also important for the organization and no effect when ethics was not important.
Unsurprisingly, all three attributes (innovative perks, training opportunities, ethics) were found to positively influence a company’s ability to attract prospective employees. Interestingly, however, between the three attributes there was a significant difference in the size of this influence, with ethics having the greatest effect on company attractiveness, followed by training opportunities, and then innovative perks. It would seem that while company reputation partly depends on ethics, it is also enhanced by greater training opportunities and, in some case, innovative perks.
Innovative perks were found to have strong interaction effects with both training opportunities and ethics. Where training opportunities were low, offering innovative perks was found to compensate, while for companies with high perceived ethics, offering innovative perks was found to improve the perceived ethical offering of a company. This is particularly interesting and suggests that ethics gives legitimacy to innovative perks, while in companies where ethics are not perceived to be important, prospective employees may see such perks as bribes or compensation for unpleasant working conditions.
Organizational and Reward Implications
The positive effect of innovative perks on attracting prospective employees demonstrates, not only that these perks are viewed as attractive, but that companies should promote these perks in their recruitment marketing and communications in order to utilize them fully to facilitate hiring the best candidates.
Interestingly, this study indicates that innovative perks have greatest pull when training opportunities offered are low, and in such cases offering these perks can compensate for the decreased attractiveness of offering little training, suggesting that for companies that do not want to invest heavily in training, offering innovative perks can act as a counterbalance. Conversely, the results indicate that companies offering substantial training opportunity have less to gain by offering innovative perks, at least in terms of advancing the attractiveness of the company to prospective employees.
The results also highlight the importance of company ethics to prospective employees, and this is something that is often overlooked by companies as a ‘selling point’ when recruiting. For those companies with high ethical codes, this study indicates that there is significant value in promoting this, particularly given the relatively low cost of developing a strong code of ethics in comparison to the cost of offering innovative perks and/or offering training opportunities.
This study gives valuable insight into the role of innovative perks, training opportunities, and company ethics in attracting prospective employees. The results give interesting food for thought on the interaction between these attributes and how companies might utilize those interactions best in attracting employees. As this study was conducted in a quasi-applied setting, it would be useful for further studies to examine these relationships in real world scenarios to further validate the results of this study. It would also be interesting to see future research look at how age and other demographic factors influence the attractiveness of these attributes.
Source Article: Renaud, S., Morin, L., & Fray, A. M. (2016). What most attracts potential candidates? Innovative perks, training, or ethics? Career Development International, 21(6), 634 – 655.
Published by: Emerald Group Publishing Limited
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