Strategic HRM and the Young Professional Programme : business model and branding implications

(1)

Maarten Smid – maarten@houdbaar.net – student #1068 3577

Supervisor: Corine Boon

Submission date: 31st August 2015

Strategic HRM & The Young

Professional Programme

(2)

1

Executive Summary

Young professional programmes have been of interest to companies for quite some time now. In our research we have been focusing on young professional programmes that are hosted and built in separate companies. The model consists of a separate (daughter) company primarily focussing on hosting a young professional programme, like training and developing talent, for the mother company.

We are particularly interested in the topics of strategic HRM and branding. Our research is one of theoretical analysis combined with field research in the form of interviews with alumni, HR directors, and young professionals. Then we apply this theoretical framework to the case of Avanade, a strong brand, experiencing some challenges in the field of young professionals.

Applying our theoretical models to our case we found the (mother / daughter) model to be changed a few times to be able to accommodate challenges the companies experienced. The model itself however is still valid and feasible.

Recommendations in terms of branding the mother / daughter company is to setup a so-called ‘House of Brands’ model in order to accommodate for the new company to build associations which are strong, favourable and unique.

Recommendations in terms of strategic HRM are with the setup of a strong development programme, not only for young professionals but also for your other employees as well, job rotation could bring benefits not only for young professionals but for the existing employees and is recommended to investigate.

Concluding our research, we find the model of mother / daughter companies to be still valid and valuable, key however is the fit in your current company.

Maarten Smid, 2015

Keywords

HRM, Young Professionals, Theory, IT Industry

Disciplines

(3)

2

I. Introduction

After graduation most students are eager to get into the routines of a working life. This poses some challenges for both the future employee and the future employer. As a future employee you want to make the right choice for your first job, whiles, as a future employer, you want to make sure you acquire the right talent for your company.

As generations change, their expectations of, and ways of work change. Future employees, Young Professionals from here onward, have different views, needs and expectations from their jobs and careers as compared to their perceiving generation(s). (M. and E. W.

McCrindle, 2011)

This is why most companies nowadays introduce, advertise and host so-called ‘Young

Professional programmes’. These programmes tend to focus on quickly developing skills and

talent of these young professionals and have them gain experience within the company and industry. Each company usually develops its own model and setup of such a programme, wherein the responsibilities for development of, performance monitoring, and strategies for such programmes are often being held by the HR team.

A. Young Professional Programmes - Model of interest

In my professional career I had the opportunity to work with consultants participating in young professional programmes with different setups and with different goals. One of the most inspiring setup for me was the model used by Kirkman Company & YSE.

In summary their setup is to employ young professionals to their daughter company, being YSE, and develop their talents within this company. These young professionals then are assigned to work for one of the clients of YSE / Kirkman company. If the young professionals perform according to or above the expectations he or she is offered a position in the mother company, being Kirkman Company. This is perceived to be a win-win-win situation where the first win is for the young professional, in gaining experience in the industry and with the company, the second win is for the company where it gets access to (new) clients and their network, and the third win is for the customer as he is able to benefit from the services provided by the young professionals, backed by the mother company, against a lower cost. In our research we explore if this setup could be beneficial for both Avanade (Netherlands) and the Dutch IT industry in general.

(6)

5

B. Research Question

In our research we, review our model of interest, with focus on both Strategic HRM and

Branding. Branding is of interest as introducing a daughter company puts forward branding

decisions, benefits and risk, whereas (strategic) HRM is of interest as this plays a major role in developing their employees, selecting talent, and supporting the company in achieving their strategic goals.

As perceived the model, as used by Kirkman & YSE, could be of interest to Avanade

Netherlands and the IT industry in the Netherlands and therefore requires further research and answers to some (key) questions. In our research we explore the following key question:

How can strategic HRM be organized to setup and leverage the benefits of young professional programmes and how should we approach branding in a mother-daughter

company setup?

By studying the relevant concepts, interviewing relevant stakeholder’s, and applying this to the IT industry in the Netherlands we tend to provide a suggestion for a model, in the end the goal of the research is to provide a recommendation to Avanade and the Dutch IT industry as a whole.

In the next section we will discuss the framing, being the concepts and frameworks we feel are relevant for this research, following the framing we will introduce the case and the relevant questions, then we will discuss the results, followed by conclusion(s) and recommendation(s).

(7)

6

II. Framing

As the topic of young professionals touches a broad spectrum of the business we will start to frame the topic in order to focus our research. We will start by describing the relevant models, which we will later be applying to our case. In this section we start by discussing the position of HRM and the Resource Based View of the firm then we dive into the topic of (strategic) HRM. Following these, introductory, sections we will take a closer look at young professionals and young professional programmes to end with a discussion of (corporate) branding.

A. Positioning HRM

HRM and the (modern) organization, what is its position in the firm and what is its relevance to the organization?

We find Porter argues HRM to be one of the supporting activities to the primary activities. In his value chain model (Figure 1: The Value Chain by Porter (1985)) Porter argues that the organization

requires supporting activities to be able to perform the primary activities efficiently. (Porter, 1985) Here the value added by HRM could be support of and training (building competences) of the workforce.

So we can conclude that HRM does add value for the business, but how is this value perceived and how can we show this value?

B. Introducing: Strategic HRM

Then what is strategic HRM and how does it relate to the HR strategy? Boxall and Prucell refer to strategic HRM as “a firm’s pattern of strategic choices in labour management and its

human resource strategy” (Boxall & Purcell, 2000, p. 184), whereas the HR strategy presents

the mission and vision for the HR team to work towards.

Before we continue, we will look into the theory by Barney on the Resource Based View. Figure 1: The Value Chain by Porter (1985)

(8)

7

Resource Based View

Introduced by Barney in 1991 the resource based view (RBV) / resource based theory (RBT) provides an inside-out view to the organization. Barney argues that the SWOT (Strength, Weaknesses, Opportunities, Threats) framework only provides half of the story, being the environmental (outside-in) analysis, (Barney, Ketchen, & Wright, 2011; Barney, 1995), and therefore suggests for the SWOT analysis to be complimented / completed by this RBV / RBT.

Key in Barney’s theory are resources, Barney defines resources as being “All of the financial,

physical, human, and organizational assets used by a firm to develop, manufacture, and deliver products of services to its customers” (Barney, 1995, p. 50) Next, Barney argues that

for a resource to bring a, sustainable, competitive advantage to the organization there are four (4) questions to be answered positively, being:

1. The Question of Value; does / do the resource(s) of a company add value by either neutralizing threats or exploiting opportunities?

2. The Question of Rareness; is / are the resource(s) of a company rare and not commonly available for other companies to control?

3. The Question of Imitability; is / are the resources of a company difficult to imitate or in possession of specific knowledge?

4. The Question of Organization; is the company organised to fully exploit the competitive potential of the resources? (Barney, 1995)

These questions summarize into the so-called VRIO / VRIN model in which Barney argues that the more questions you are able to answer with “Yes” the more sustainable the competitive advantage will be. This is summarized in the table below (Table i: The VRIO Framework adapted from Barney (1995))

(9)

8

The VRIO Framework

Valuable? Rare? Difficult to

Imitate? Supported by Organization Competitive Implications Performance No Competitive Disadvantage Below Normal Yes No Competitive Parity Normal Yes Yes No Temporary Competitive Advantage Above Normal

Yes Yes Yes

Sustained Competitive Advantage

Above Normal Table i: The VRIO Framework adapted from Barney (1995)

Linking Barney’s resource based view to (strategic) HRM we find that the organization question is the key here. The organization should support or be able to support the resource(s) in order to fully benefit from it, how the organisation should support these resources will differ between them, but requires a (HR) strategy.

The term Human Resource Management already suggests the type of resources HRM is particularly interested in. Looking at these resources, in this case being the employees of the company, these should be considered and thus threated as the (possible) source of your (sustainable) competitive advantage. Others like MacDuffie argue that the Human Resources are the source of competitive advantage in the organisation as their knowledge of processes, their routines and their specific experience with a product makes them difficult to imitate. (Macduffie, 1995)

AMO Model

So how to make sure we leverage our human resources? This is where we introduce the so-called AMO model. The one key difference between the RBV and the AMO model is their going-in position. The RBV suggests HRM is one of the possible sources whereas the AMO Model suggests that HRM is the source.

The AMO model was first introduced by Bailey in 1993 and later improved by Appelbaum et al. in 2000 (Appelbaum, Bailey, Berg, and Kalleberg, 2000). The initials AMO translate into

(10)

9

Ability, Motivation and Opportunity. The model suggest business performance is to be

improved by following HR practices to allow for employees to perform best by: At first; making them Able to perform their job, they have the skills and experience to do so. Secondly; keeping them Motivated to perform their job, they want to do their job or are encouraged to do so, and Thirdly; by giving them the Opportunity to perform their job by for example having the right tools and support from the manager.

Now let us look at the definition of young professionals and their generations characteristics.

C. Young Professionals

In order to fully understand the target group, we need to review the definition of the term ‘Young Professional’. Definitions of this term are widespread and differ from time to time and even per geographic location. The most common definition, and the one we are referring to in our research, is:

 People in between 20’s and 30’s.

 (Recent) Graduates with no or little working experience, who are getting employed either in a profession or in so-called white-collar occupation. Other labels that are being used for this group include ‘High-Potentials’, ‘Trainees’, and ‘Generation Y’. Although the latter is true for now days’ generation Y will eventually no longer be young. These generations however are of interest to the HRM function. As each generation, in general, has its own characteristics and views towards the (corporate) world, this also requires a different approach towards each generation and thus adapting

recruitment and management styles and strategies. (M. McCrindle, 2003) Table ii:

Generations adapted from McCrindle (2003), briefly summarises several generations, in the next section we will cover Generation Y in more depth, including suggestions on how to engage with this generation.

(11)

10

Generation Y

So let’s look into Generation Y, being the current Young Professionals. One of the questions HR managers could ask here is: How to attract, select and retain young professionals from

this, being generation Y, generation?

Attract

Looking at the research by McCrindle he argues Generation Y seek an opportunity over a job and look for things like culture, fun, management style, development opportunities

(training), and flexibility. (M. McCrindle, 2006) So in order to be able to attract generation y employees your (job) advertisement(s) should showcase this. But there is more than just an advertisement.

Select

Selecting the right talent is an important step in the recruitment process. But what is

selection? Stone refers to it as “Selection is the process of differentiating between applicants

in order to identify and hire those with a greater likelihood of success in a job.” (Stone, 1982,

p. 173) As there is cost involved in the selection process, it is important to be as effective and thorough as possible. Depending on the job being offered so-called selection tests may be used (i.e. IQ test, Intelligence test(s) or fitness test(s)) The result of this selection process is a job offer followed by an acceptance (or rejection) of your candidate.

1_{Age at time of writing, August 2015.}

Description Born

Age

1

_{Key Characteristics}

Builders Before 1946 69+ -

Boomers 1946 – 1964 51 – 69 Adaptive & Flexible generation, collaborative management style.

Generation X 1965 – 1979 36 – 50 Easily adopt both boomers work ethic and focus and Gen Y views, values & culture. Perceived to be a perfect bridge generation between

Boomers & Y.

Generation Y 1980 – 1994 21 – 35 See C. Young Professionals – Generation Y

Generation Z 1995 – 2009 6 – 20 -

(12)

11

Looking at selection in relation to generation Y we find they prefer interviews, limited to one interviewer and with a max of two (2) interviews. (M. McCrindle, 2006)

Retain

As the job mobility of Generation Y is higher as compared to the baby boomers a good retention strategy is needed to help retain these generation Y employees. In his research McCrindle discovered five (5) factors standing out, being:

1. Work / Life Balance; Generation Y thinks of work as being part of life, not life itself. They want to be flexible to pursue whatever opportunities outside of work the encounter.

2. Workplace Culture: Generation Y is concerned with being valued within the company and perceive their colleagues as being workmates and sometimes friends.

3. Varied Job Role: Generation Y like roles where variety and flexibility is part of the job. They are keen to change, having responsibility, and seek for openness on how

decisions are being made.

4. Management Style: Generation Y like organic and flexible leadership styles where decisions are being made on basis of consensus rather than command, this allows for participation of generation y in the decision making process.

5. Training: Generation Y understands that training is key to keep being relevant in today’s competitive market, they foster training opportunities for both technical and soft-skill training.

McCrindle suggest employers to take notice of these insights and develop a retention strategy with these in mind. (M. McCrindle, 2003) Looking at the key topics mentioned we find this is usually also part of a so-called young professional programme, what more is perceived to be in such a programme? Let us find out in the following section.

D. Young Professional Programmes

Diving into the topic of young professional programmes. What is perceived to be the content of such a programme? This leads to one of the key questions being: What is a young

professional programme and what should be the content of such a programme? This

question consists of two (2) parts, the first What is a young professional programme? already has a different answer depending on the company and industry where it is being

(13)

12

implemented. In our results section (IV. Results) we will provide our view. The second question can be more related to theories, we have selected job rotation and talent

management since we argue these are required in each (young professional) programme.

Job Rotation

The concept of Job Rotation is perceived as “lateral transfers of employees between jobs in

an organization” (Campion, Cheraskin, & Stevens, 1994, p. 1518) The reasoning for rotation

of jobs can vary from reducing boredom, for orientation & placement, and staffing functions (for example peaks in workloads). (Campion et al., 1994)

Outcomes of the research by Campion et al. show that early-career employees are more likely to be interested in rotating between jobs, and that employees which are performing well are more likely to be rotated, maybe as a form of reward(ing)? Employees perceive job rotation as a good learning mechanism too as they perceive their skills to have improved by this exercise. (Campion et al., 1994)

The learning mechanism of job rotation was studied by Ortega. This research shows job rotation being a better learning mechanism over specialization, specifically for employees in their early careers. (Ortega, 2001)

In- versus Inter-company

Looking at job rotation we can distinct two (2) different forms of job rotation, being in- and inter-company. Inter-company job rotation is common in a consulting environment in which the employees of the consultancy agency work on different projects at different customers during their careers. Learning comes from different experiences in different work

environments in different organisations and sometimes even different industries. On the other hand, an in-company model supports employees moving around within the company. Here the working environment (here the company) does not change but the department where the employee is working changes. Key difference is the level of expertise and the perceived goal, in the in-company model the goal could be to find the best fit for an employee in a department, whereas the inter-company, specifically in consulting

(14)

13

Employment Flexibility

In their research Lepak, et al. studied the effect of employment modes on firm performance. Lepak, et al. define four (4) types of employment being: Knowledge based, Job-based,

Contract, and Alliances. (Lepak, Takeuchi, & Snell, 2003)

In our research we will focus on the third being the Contract work; or “individuals being

contracted to perform specific tasks with a limited scope, purpose, and or duration” (Lepak et

al., 2003, p. 683) Based on their research, Lepak, et al. discuss that there is a clear relation between an increase in firm performance and contract work. This could be of the nature of the work or assignment, usually project work.

Talent Management

Talent, as we have learned in the AMO model (section B. Introducing: Strategic HRM, AMO Model), needs to be at least: Able, Motivated and given the Opportunity to perform their jobs. As talent management is often about cost, we need to pay for a particular training, and companies are amounted to make money we need a trade-off between these two (2). In his research Cappelli referrers to talent management as being a supply and demand alike system (Cappelli, 2008). Cappelli introduces four (4) principles that help to improve the return on investment and internal opportunities for employees. These four (4) principles are;

1. Make and Buy to manage Risk; Here Cappelli argues that talent can also be hired externally for specific positions, and that precious resources should be

thoughtfully positioned.

2. Adapt to the Uncertainty in Talent Demand; Here Cappelli suggests a talent pool to be setup with resources that can be allocated among business units. Also shortening training programmes will help to deal with the uncertainty.

3. Improve the Return on Investment in Developing Employees; Cappelli suggest that employees take a share in the costs of development, this can either be in time and or money. Adding to this maintaining relationships with former employees could bring benefits in the future.

4. Preserve the Investment by Balancing Employee-Employer Interests; Here Cappelli suggests the balance to between the employee and the employer

(15)

14

interests is key and suggest that advancement decisions should be shared between the two (2).

Cappelli in general suggests that practises of engineering and planning should be applied in HR talent management in order to be able to shift to what Cappelli refers to as a

“talent-on-demand” model. (Cappelli, 2008, p. 81) E. Corporate Branding

In the context of the mother and daughter perceived setup, being the way Kirkman & YSE have setup their programme, branding plays an important role. This results in a question like: How to setup the brand architecture for a company with a mother / daughter

relationship?

Therefore, in this section we will dive into the theories of corporate branding and various branding strategies which could be leveraged in this setup. In this section we discuss the various corporate branding strategies, discuss concepts like points of difference and points of parity, and then discuss how to leverage this in order to grow your brand.

Brand Associations & Positioning

One of the key elements in branding are the so-called associations with the brand, as a company you want your customers (whether business to business or business to consumer) to have brand associations which are: Strong, Favourable and Unique. (SFU) Strong

associations come up easy and are linked to (one of) your brand(s), the association(s) then should be favourable to your brand, in other words they should tell something positive for the brand, then the associations should be unique meaning that it is not (easily) linked to (one of) your competitor’s brands.

In terms of associations the terms points of parity and points of difference are of key importance. Looking at the definition of both terms we find:

 Points of Parity (POP): These are associations which are not unique to your brand

and could be shared with other brands. Key here is to be in the game you at least need to be on par (parity) with your competitors.

(16)

15

 Points of Difference (POD): These associations are unique to your brand / offering

and therefore should be leveraged. Important to notice is that a POD can overtime become a POP as new companies enter the market or standards / expectations change.

So how can a brand leverage this? According to Keller: “Frame of reference, points of parity,

and points of difference are moving targets” (Keller, Sternthal, Tybout, & Extensions, 2002,

p. 86) This requires brand managers to constantly adapt their brand positioning and thus keep track of the markets and their context. So should you introduce a new brand, or try to leverage / lift on the success of a brand already in your (brand) portfolio? Let us discuss in by reviewing the so-called Brand Relationship Spectrum.

The Brand Relationship Spectrum

In 2000 Aaker and Joachimsthaler together introduced the ‘Brand Relationship Spectrum’ in order to review and design what they call a ‘Brand Architecture’. According to Aaker and Joachimsthaler “A coherent brand architecture can lead to

impact, clarity, synergy, and leverage rather than market weakens, confusion, and missed opportunities” (Aaker &

Joachimsthaler, 2000, p. 8)

From their model (Figure 2: Brand Relationship Spectrum by Aaker & Joachimsthaler (2000)) we derive four (4) main-, and nine (9) sub-strategies which we will briefly discuss:

1. House of Brands

a. Not Connected: Independent brand(s) with no or

little links i.e. the portfolio of General Motors having several brands like Opel and Chevrolet.

b. Shadow Endorser: Independent brand(s) with no

direct link, however the link is well known by the majority of the consumers i.e. BMW and Mini Cooper.

Figure 2: Brand Relationship Spectrum by Aaker & Joachimsthaler (2000)

(17)

16 2. Endorsed Brands

a. Token Endorsement: Often used to add credibility from the mother brand to

the daughter brand, i.e. ‘a Sony Company’ and ‘by Calvin Klein’.

b. Linked Name: Here the name of the brand / product itself creates a family of

brands, i.e. iPhone, iPad, iMac, McMuffin, McNuggets, etc.

c. Strong Endorsement: Here the daughter brand uses a strong endorsement to

help boost the image of the mother brand. The goal is here to link additional associations to the mother brand.

3. Sub brands

a. Co-Drivers: Here the sub brand on its own is also well respected and plays an

almost equal role as the parent brand, i.e. Levis 501, the number 501 is generally associated to the Levis brand and could be brand on its own.

b. Master Brand as Driver: Here the name of the mother brand is often used with

a post-fix, i.e. HP Deskjet and Dell Latitude.

4. Branded House

a. Different Identity: Here the identity and associations of the mother brand are

being used but adapted to the country or target group, i.e. GE Capital (professional services) and GE Appliances (Home usage)

b. Same Identity: Here the sub brand has usually just descriptive value, i.e. Virgin

Radio and Virgin Rail or FedEx Express and FedEx Services. The master brand is the only driver here.

(18)

17

Brand Separation Model

In the same article (Aaker & Joachimsthaler, 2000), Aaker and Joachimsthaler provide guidance on how to select the right position / strategy in their Brand Relationship Spectrum. They argue that most of the organisations will usually have a mixture of the four (4) different (main) branding strategies. Their Brand Separation model (Table iii: Brand Separation Model by Aaker & Joachimsthaler (2000)) provides guidance by asking questions towards one of the two (2) extremes in the Brand Relationship Spectrum. We will use their model to answer the question regarding brand architecture and setup.

Toward a Branded House

Toward a House of Brands

Does the master brand contribute to the offering by adding;

 Associations enhancing the value proposition?

 Credibility with organization associations?

 Visibility?

 Communication efficiencies?

Is there a compelling need for a separate brand because it will;

 Create and own an association?  Represent a new different offering?  Avoid an association?

 Retain/ capture customer/ brand bond?  Deal with channel conflict?

Will the master brand be strengthened by associating with the new offering?

Will the business support a new brand name?

Table iii: Brand Separation Model by Aaker & Joachimsthaler (2000)

Now that we have discussed the relevant theories and completed our framing, we will introduce the case.

(19)

18

III. Case description

The research in the first place is targeted towards the Avanade Netherlands organization, in this section we introduce the organisation, the case and relevance for the organisation.

A. Organization Overview

Avanade entered into business in the year 2000 starting as a joint venture between Accenture and Microsoft. After setting up the company in the United States Avanade Netherlands opened for business in 2004. From its start till date both Avanade and Avanade Netherlands have shown rapid growth both in terms of revenue and employees.

Avanade provides consulting services with a pure Microsoft focus. In the Joint Venture Accenture provides knowledge on industries, business processes and project management whereas Microsoft provides the technology. Solutions provided to the customers go from technical infrastructures and migrations to new webpages and mobile applications. This is summarized in their vision:

“Our vision is to be recognized as a global services innovator, helping customers realize the best results from the Microsoft platform.” (Avanade Company Website)

The core to Avanade’s business and therefore what makes Avanade unique are their people and their culture. This is also evidenced by their so-called core-values, being;

 “Achieve through global teamwork

 Focus on customers

 Embrace change

 Demonstrate a passion for technology

 Build the Avanade experience

 Act with integrity, dignity and respect” (Avanade Company Website)

In reviewing these core-values we argue at least four (4) of these values have their employees in mind(!) (highlighted in bold)

One of the competitive advantages of Avanade is their people, these people have and gain the experience and knowledge. Besides that, their employees should have a feeling for being and behaving as a consultant and being able to work in and deliver as a team. As this is

(20)

19

important and one of the key focus areas of Avanade the recruitment and selection processes are carefully performed.

In terms of HRM processes the employees are being serviced / enabled by the HRM team. Not all tasks are being performed in the Dutch office as some are being outsourced (like payroll) and others are being coordinated by the Global organisation (like training) applying the HR Business Partnership model from (Ulrich, 1998) we argue the Dutch HRM team to currently be a ‘Administrative Expert’. (Review: Appendix A – HR Business Partnership Model by Ulrich (1998) for more information)

In terms of the business model growth is possible by either increasing an employee’s productivity (measured in chargeability), which is limited (40 hours in The Netherlands) or add employees to the company. Since the goal of Avanade is to continue growing over the upcoming years acquiring talent is the only sustainable solution to accommodate this growth.

B. Relevance for Organization

As acquiring talent becomes more challenging within Avanade there is a focus to hire interns. These interns are given the opportunity to work on their own project for about 5-6 months and get a taste what is it like to work for Avanade. After this time Avanade makes a decision whether there is a fit, and the intern is thus offered a positon, or there is no fit. This till date has been a successful but rather unstructured way of attracting talent to Avanade. Adding to this there is a slight disconnect between the knowledge from the current

graduates (being focused on Java) and the knowledge we expect (being Microsoft .NET) this is one of the reasons why a Young Professional Programme was questioned to be a (one of) the possible solutions to acquire new talent and make sure they get trained, and gather experience as per ‘The Avanade Experience’. (One of the Core-Values)

(21)

20

C. Case Questions & Methodology

In our review of the theory we have asked ourselves several questions. In this section we summarize these questions and think of a methodology to approach these research questions:

1. How to attract, select and retain young professionals from this, being generation Y, generation?

2. What is a young professional programme and what should be the content of such a programme?

3. How to setup the brand architecture for a company with a mother / daughter relationship?

Looking at the questions above these can be answered applying the theoretical models introduced in section II. Framing. The method here would thus be one of theoretical study / field research. The outcomes to these questions can be found in section IV. Results

Theory is not the only source of information used. We would require a different method to be able to answer the following research questions:

4. What are the perceived benefits brought by young professional programmes to the organisation?

5. What are the experiences in the market with regard to mother / child companies?

These answers are to be provided by doing several structured and unstructured interviews with different stakeholders and stakeholders of various seniority (HR Directors, HR Staff, Alumni and current Young Professionals) in both the Avanade, YSE, and Kirkman

organizations.

Finally, putting it all together, summarising, and to be able to come to a recommendation we would need to answer the following research questions:

6. How to organise and setup a young professional programme using a daughter company?

7. How could Avanade benefit by leveraging these?

Answering these questions leads to the recommendation which is to be found in section V. Summary, Conclusions and Recommendations of our paper.

(22)

21

IV. Results

This section describes the results when applying the framing to the case at hand. Looking at our research questions we can easily divide them into three (3) different groups, one group being particularly focussed on the theory, one group focussing on the practise, interviews in our case, and the last group focussing on summarising and recommendations.

In this section we will discuss the first two (2) groups, being A. Theoretical Analysis and B. Interviews & Results.

A. Theoretical Analysis

In this section we will apply our, selected, theoretical models to our case and try to answer the research questions below:

1. How to attract, select and retain young professionals from this, being generation Y, generation?

2. What is a young professional programme and what should be the content of such a programme?

3. How to setup the brand architecture for a company with a mother / daughter relationship?

We will answer the questions one by one. In the end the outcome of these questions will summarize into a recommendation which is to be found in section V. Summary, Conclusions and Recommendations

Question 1: How to attract, select and retain young professionals from this, being

generation Y, generation?

In answering this question we relate to the theories as introduced by McCrindle (M. McCrindle, 2006) and described in section II. Framing. McCrindle argues generation Y is looking for an opportunity over a job and is thus attracted by things like culture,

opportunities for (personal / professional) growth and flexibility.

In terms of selection we discussed the theories from both McCrindle and Stone (M.

McCrindle, 2006; Stone, 1982) McCrindle suggests the generation Y is used to interviews but think two (2) interviews should be sufficient. Stone refers to selection as being “Selection is

(23)

22

the process of differentiating between applicants in order to identify and hire those with a greater likelihood of success in a job.” (Stone, 1982, p. 173)

After being able to attract and select the young professionals we need to retain them in order for them to be able to bring benefits to the organisation in the long(er) run. We discussed the five (5) factors, McCrindle (M. McCrindle, 2006) argues to be key in a company’s retention strategy, being:

1. Work / Life balance 2. Workplace culture 3. Varied Job Role 4. Management Style 5. Training

Applying this to our case we argue Avanade is already performing most of the tasks, related to attracting (young) professionals, by using corporate website(s), career events, social networks like Facebook & Twitter, and recruitment agencies. Avanade has won awards like ‘Top Employer ICT 2015’ and ‘Top Employer Europe’i_{and tries to leverage the impact made} by these (kind of) awards.

In terms of selection, managers having field experience, perform the initial interview and may make decisions on hiring young professionals, some cases / candidates require additional interviews with the service line manager (business unit manager). Generic tests are not being used nor templates or fixed instructions on how to structure the interviews. In retaining (young) professionals Avanade relies on the career (line) managers of the professional. The career manager is the first contact point for the employee and acts as a coach. Training is required and should be at least 10 days each year. The culture and management style are being monitored by both the leadership- and HR teams. Employees are asked to share their experiences in the yearly survey (Pulse). Whereas the varied job role is standard at Avanade, projects, at the client side, last for 6-12 months on average before moving to another client / project. Work / Life balance monitored by the managers and HR, using timesheets. In case an unbalance is ‘found’, managers are required to contact their employee and discuss what caused this unbalance and if this is structural or incidental. Overall we conclude Avanade looks ready to attract, select, and retain (young) professionals.

(24)

23

Question 2: What is a young professional programme and what should be the content of

such a programme?

This question can be split into two (2) questions worthwhile answering separately. The first would then be: What is a young professional programme? Followed by: What should be the

content of such a programme? So let us start with the first. What is a young professional programme?

Comparison between Capgemini & Rabobank

At time of writing there is little to no research on this topic, so we start by comparing two (2) young professional programmes to each other, one being the one from Capgeminiii_{a global} IT consulting firm, and the other being from Rabobankiii_{a Dutch Bank.}

Looking at the key similarities we find both programmes to be targeted to graduates with up to a maximum of 1 year of working experience, adding to that training plays a key role in both programmes this training is both technical as well as on soft-skills. The next similarity is the job-rotation, both programmes focus on job rotation, the one being internal (Rabobank) and the other being external at clients of Capgemini.

In terms of differences we only notice the location of the projects to be performed, Capgemini, with his focus on clients places the young professionals with the client, where Rabobank, having no external clients to perform services, keeps their young professionals inside of the company. We explained this difference, the difference between in- and inter-company, in paragraph D. Young Professional Programmes of the II. Framing section.

Definition

Based on the method of comparing two (2) programmes’ we define a young professional programme as follows:

A young professional programme is a structured development programme, specifically targeted towards people with little or no working experience in between their 20’s and 30’s,

which tends to be limited to a specific timeframe and focusses on (rapid) development of skills.

(25)

24

What should be the content of such a programme?

Again we will use the comparison between Capgemini and Rabobank as a starting point for our discussion and definition. Looking at the content of the programmes, both Capgemini and Rabobank consider job rotation, in their specific way, in their setup, offer training targeted to both technical skills as well as ‘soft’ skills (i.e. presenting, public speaking), and have several career paths for young professionals.

Looking at the content we conclude that training, job rotation and management of career paths is key in these programmes. This however does not cover the whole story, looking at things like management style and company culture, which are perceived to be important by generation Y, these ‘softer’ contents are equally important, but hard to write down. Cultural fit is something that is to be experienced as goes for the fit of management style. In the end having the content but lacking the cultural fit will not lead to retaining young professionals. The goals for the organisation is to select the best, out of the best, and make them stick in the company. Overall we argue training, job rotation and career paths to be tools in trying to achieve this goal.

Question 3: How to setup the brand architecture for a company with a mother / daughter

relationship?

In this section we will discuss the suggested architecture in terms of branding. The setup of a new company, as this is our research goal, poses risk. This risk is to be mitigated as such that it is acceptable. In terms of branding we have a strong mother brand which has strong,

favourable and unique associations, and which is leveraging its points of difference. Then

there is the new company, the child, company which currently has no associations which can drive it.

So there is both a risk and opportunity here, the risk being that the new brand turns any associations currently unique and connected to the mother brand from a point of difference to a point of parity whiles the opportunity being is adding new associations to the new brand, which could be of interest to your mother brand.

Taking into account the Brand Separation Model (Table iii: Brand Separation Model by Aaker & Joachimsthaler (2000)) we should be answering the following question(s) in order to

(26)

25

support the route towards a ‘House of Brands’ model: Is there a compelling need for a

separate brand because it will;

 Create and own an association?  Represent a new different offering?  Avoid an association?

 Retain/ capture customer/ brand bond?  Deal with channel conflict?

In answering these questions, we argue there is a need for new associations, there is a new offering which however is somewhat related to the pervious offering, there is a need to avoid an association with the mother brand, and as there is a new group of consumers to be captured we need to differentiate here as well, finally in terms of channel there is a conflict with the mother brand. With this in mind, we suggest, based on the research from Aaker and Joachimsthaler (Aaker & Joachimsthaler, 2000), to include both a House of Brands with a

shadow endorser and a token endorsement as the options.

In the end the most important question is for the business, they need to support the brand name. (Aaker & Joachimsthaler, 2000)

Applying this to Avanade, we argue Avanade is a well-recognised brand with several strong, favourable and unique brand associations. For Avanade setting up a daughter company we would recommend to use the ‘House of Brands’ model.

B. Interviews & Results

In this section we will review the results of our interviews and try to answer the research questions below:

4. What are the perceived benefits brought by young professional programmes to the organisation?

5. What are the experiences in the market with regard to mother / child companies?

The outcomes of these interviews are important to be able to match our theoretical analysis with the experiences in the field. Following these interviews, we can summarize our research and provide recommendations. To review the number of interviewed employees per

(27)

26

company, review: Table iv: Number of interviewed employees per company in Appendix B – Tables

Note: The answers to the interview questions have been translated from Dutch to English

and reformulated in order to ensure correct interpretation.

Question 4: What are the perceived benefits brought by young professional programmes

to the organisation?

To be able to answer this question we conducted interviews with several people form the YSE / Kirkman and Avanade organisations. As per their answers we find the following perceived benefits; Access to talent, refreshed energy, bridging the generation gap.

Access to talent

“Not all companies are in good shape to attract young professionals or have the capacity to hire, train and benefit from these young professionals. Attracting talent requires specific targeting and convincing of the target group that your company is a fun place to work and can provide the features young professionals are looking for” – HR Director at YSE

As the YSE company is setup specifically to target young professionals, train, and coach them there is a huge pool of talent available to them (being YSE) and thus to their clients. YSE builds on the client relations build by Kirkman to be able to post their talent.

For a company having access to talent brings different dynamics / energy into the

organisation, it could help drive innovation, and provide access to other talent by leveraging the network of these young professionals.

As this talent, in our case, comes from a consulting company (Kirkman and YSE) there are some guarantees as well there is a company to back the talent (in case of errors). For the organisation, being the client, taking the services there thus is a low risk.

Having access to talent usually results in being able to benefit from the other two (2) drivers.

Refreshed Energy

“As young professionals usually are educated by the latest standards and with the latest theory on their specific subject(s), and adding to that are not hindered by any prior

(28)

27

knowledge or sentiment. This allows for a refreshing view on how the business operates and how this could be optimized.” – HR Director at Avanade

“The sentiment of ‘we have always done it like this’ usually gets in the culture of companies, breaking these sentiments can potentially bring added value to the business.” – HR Director

at YSE

Having a refreshing view / energy on the ways of working and for example a business process could benefit the whole organisation. As information systems develop and

automation of processes increases having the proper knowledge of these systems and being able to monitor these systems becomes equally important, usually well trained on using technology and often interested in development of these technology young professionals can easily recommend changes to and adapt to these changes in the (business) processes. The energy brought along by the young professional could also boost the morale of the other people in the team / workforce increasing the productivity of this team.

This brings us to the differences between generations and the closing of this gap.

Bridging the generation gap

“Some employees who have made a career in a company could get stuck in their daily routines and way of work.” – Young Professional at YSE

Young professionals can have a levering effect on teams, as these Generation Y has different views over Generation X and the so-called Baby Boomers, their ideas can be refreshing but also be perceived as a risk for one another. The open mind in Generation Y can help bridging gaps between generations and teams. Listing to each and every one story before drawing a conclusion. As per our research Generation Y has a different response to management and does not perceive leadership to be always right, but challenges and questions, seeking for consensus over using power.

Question 5: What are the experiences in the market with regard to mother / child

companies?

Looking at experiences we focus our attention to YSE. Their model is perceived to be a ‘win-win-win’ situation, where the clients of YSE, YSE / Kirkman itself, and the young professional

(29)

28

gain / win. “This is what makes our model successful, if this is no longer the case we and the

model have failed” – HR Director at YSE.

This model however has changed over the past years. In the starting years YSE was a full daughter company founded by Kirkman, young professionals wanting to join Kirkman where put on the YSE payroll and motivated to work hard in order to earn a contract at Kirkman Company. This model worked ok, but posed a few challenges. “The result was that I, being a

young professional, felt to be part of YSE rather than part of Kirkman” – Alumni at YSE.

Adding to that after serving their, 2 years, contract they were free to go, efforts put into training these young professionals where not always leveraged by YSE / Kirkman. A slight change to the model was implemented to counter this challenge, as simple as putting the young professionals on the payroll of Kirkman instead of on YSE’s. Kirkman and YSE remained in the same holding but where now further separated.

As demand changed in the market the model was again updated. “We received feedback

from clients wanting to benefit from YSE talent within their own company” – HR Director at

YSE.

In its current model YSE now supports multiple clients offering a young professional programme as a service. YSE makes sure to train young professionals, based on the requirements of the company and facilitates the programme, taking away administrative burden in companies which do not have the facilities to setup such a programme

themselves. “Our risk is low, our clients pay us to facilitate the programme, we need to make

sure we deliver the expected quality” – HR Director at YSE.

The shift is model is interesting, as the perceived benefits could thus not be met using their initial setup. Changes to the model now have turned the former daughter company into a business on its own.

(30)

29

V. Summary, Conclusions and Recommendations

A. Summary

To finalise our research, we need to draw conclusions and provide recommendations. Looking at our research it included lots of theoretical review, some interviews and a potentially large scope. As start we narrowed the scope down to two (2) topics we were particularly interested in being Strategic HRM and Branding. In our research we intended to test theories against practise and tried to understand what was going-on. Looking at the case and the results we argue there are a few surprises, models that had a huge potential where changed and definitions of a ‘young professionals’ and ‘young professional

programmes’ where hard to find / come to.

B. Conclusions

In order to conclude our research, let us review the key questions we introduced earlier, being:

How can strategic HRM be organized to setup and leverage the benefits of young professional programmes and how should we approach branding in a mother-daughter

company setup?

Looking at strategic HRM we conclude their importance in organising a young professional programme is with the recruitment & selection process where the HRM function has a key role to attract and select the right talent for the organisation. Following selection developing skills and making your talent perform at best is the next key role for the HRM function, development programmes targeted toward specific career paths should be in place and must be supported by the organisation.

In terms of branding a ‘House of Brands’ as per research of Aaker & Joachimsthaler (Aaker & Joachimsthaler, 2000) we conclude would be the best choice. Benefits are that this will not harm the mother brand in case of negative experiences. Drawbacks include strong,

favourable and unique associations cannot be transferred or linked to the mother brand. In answering the question and sub-questions we have found that the mother-daughter setup, despite some (minor) changes to the model is a good setup to pursue. The changes as experienced in the YSE / Kirkman setup are just minor and have shown that the model is still

(31)

30

effective. We conclude that the setup of a separate organisation / company has benefits in terms of attracting the right talent but also has his drawbacks in terms of administrative ‘overhead’. Overall we conclude this model to be effective and suggest to take it into consideration in developing a young professional programme.

C. Recommendations

In this section we tend to write down our recommendations, in general, as well as

recommendation specific towards Avanade. We will structure our recommendations based upon our final two (2) questions being:

6. How to organise and setup a young professional programme using a daughter company?

As in our research we will focus on two (2) topics being strategic HRM and branding, our recommendations are as follows:

Strategic HRM:

As per model of YSE / Kirkman we recommend to setup a separate company to attract young professionals and train them in the first two (2) years. Overall we recommend that in order to attract young professionals to your (sub) organisation one could consider using the term ‘Young Professional Programme’ in attracting talent, as young professionals will be triggered by these kind of programmes. After attracting talent, they should be treated alike the other employees, receiving training, gaining experience, and become embedded in the

organisation.

We recommend HR development programmes should be in effect in every organisation regardless of age and or experience. As job rotation is not always an option within an

organisation (inter-company) due to specific knowledge we recommend to review a rotation setup which will fit your organisation.

Branding:

In terms of branding our (sub) company we recommend the ‘House of brands’ model as per theory of Aaker and Joachimsthaler (Aaker & Joachimsthaler, 2000). We recommend to setup a new organisation and brand it separately from the mother organisation to avoid channel conflict.

(32)

31

7. How could Avanade benefit by leveraging these?

So, how could the Avanade benefit by applying our recommendations? Looking at Avanade as a place to work we argue most of the recommendations to be in place within the current organisation. Still they could benefit by advertising a so-called young professional

programme and thus to attract these young professionals.

In the case of Avanade, we do not recommend setting up a new company and thus

establishing a new brand. Avanade currently is in good shape to attract talent the way it is currently organized. The brand is well known and perceived to be ‘the experts’ in the market.

Key items like: training, culture, and development is in place and being valued by their current employees as evidenced by the results of their yearly, internal, ‘Pulse’ survey.

D. Discussion & Future Research

So, looking at the conclusions and recommendations what can we take away? Well first one could argue the term ‘Young Professional Programme’ to be a marketing instrument rather than actually adding value or doing something different over regular HR development programmes, further research is required to review this statement.

Second it is key to mention is that although the results are based on the outcomes of our interviews there is no practical evidence the recommendation will work in other companies and / or within Avanade. Interestingly during interviews participants recognised changes made in the setup of the programmes. The model changed a few times and the business model shifted from serving one company to serve multiple.

As time was limited we limited ourselves in interviewing just two (2) companies, being YSE / Kirkman and Avanade, as these will have a biased story towards their own company chances are the research is biased towards an outcome in their favour / towards their model.

Future Research

Looking at room for future research we would like to take the opportunity to share the following suggestions:

(33)

32

 Differences in development programmes; What models are common in the

(strategic) HRM practise and what is their effect? How do these compare to a ‘young professional programme’, and what can we learn from one another?

 (Age) Diversity and Young Professionals; As young professionals most likely interact

with other young(er) professionals their view could become biased, same is for levels of education. This is most likely the case in so-called intra-company programmes.  Broader and unbiased; Looking at our research we limited ourselves, due to

time-constraints, to just two (2) companies, one (YSE / Kirkman) having a clear bias

towards the concept, the other being the receiving party (Avanade). Further research could be broader and less biased / unbiased.

 Involve clients from companies; An interesting field for further study could be

involving the clients from consulting companies and interview them to be able to review if they experience the benefits as we perceive them to be.

(34)

33

VI. References

A. Articles & Books

Aaker, D. a, & Joachimsthaler, E. (2000). The Brand Relationship Spectrum: The Key to the Brand Architecture Challenge. California Management Review, 42(4), 8–23.

Appelbaum, E., Bailey, T., Berg, P. and Kalleberg, A. (2000). Manufacturing Advantage: Why

High Performance Work Systems Pay Off. New York: Cornell University Press.

Barney, J. B. (1995). Looking inside for competitive advantage. Academy of Management

Perspectives, 9(4), 49–61.

Barney, J. B., Ketchen, D. J., & Wright, M. (2011). The Future of Resource-Based Theory: Revitalization or Decline? Journal of Management, 37(5), 1299–1315.

Boxall, P., & Purcell, J. (2000). Strategic human resource management: where have we come from and where should we be going? International Journal of Management Reviews,

2(2), 183–203.

Campion, M. a., Cheraskin, L., & Stevens, M. J. (1994). Career-Related Antecedents and Outcomes of Job Rotation. Academy of Management Journal, 37(6), 1518–1542. Cappelli, P. (2008). Talent Management for the Twenty-First Century. Harvard Business

Review, (March).

Keller, L., Sternthal, B., Tybout, A., & Extensions, B. (2002). Three Questions You Need to Ask About Your Brand. Harvard Business Review, 80–86.

Lepak, D. P., Takeuchi, R., & Snell, S. a. (2003). Employment flexibility and firm performance: Examining the interaction effects of employment mode, environmental dynamism, and technological intensity. Journal of Management, 29(5), 681–703.

Macduffie, J. P. (1995). Human resource bundles and manufacturing performance: Organizational logic and flexible production systems in the world auto industry.

Industrial & Labor Relations Review, 48(2), 197–221.

McCrindle, M. (2003). Understanding Generation Y. McCrindle, M. (2006). New Generations at Work.

McCrindle, M. and E. W. (2011). The ABC of XYZ. In The ABC of XYZ, Understanding the

Global Generations. UNSW Press.

Ortega, J. (2001). Job Rotation as a Learning Mechanism. Management Science, 47(10), 1361–1370.

(35)

34

Porter, M. E. (1985). Competitive Advantage: Creating and sustaining superior performance.

New York (Vol. 15).

Stone, T. (1982). Understanding Personnel Management. Dryden Press.

Ulrich, D. (1998). A New Mandate for Human Resources. Harvard Business Review, 76(1), 124–134.

B. Internet

 Avanade Vision Statement: http://www.avanade.com/en/about-avanade/about-us/about-us, Last visited: 10-08-2015

 (Image) Brand Relationship Spectrum:

http://blogs-

images.forbes.com/onmarketing/files/2015/06/Brand-Relationship-Spectrum--1247x1940.jpg, Downloaded: 10-08-2015

 (Image) Value Chain:

http://cdn2.businesssetfree.com/wp-content/uploads/2013/09/Porters-Value-Chain-e1379298719516.png?3d1de4,

Downloaded: 11-08-2015

 (Image) HR Business Partnership:

http://image.slidesharecdn.com/strategichumanresourcemanagement-

120716211840-phpapp02/95/strategic-human-resource-management-18-638.jpg?cb=1415412948, Downloaded: 10-08-2015

C. Foot- and End-Notes

i. Avanade Press Release Top Employer: http://www.avanade.com/nl-nl/press-releases/avanade-top-employer-europa-en-top-employers-ict-2015-page, Last visited: 24-08-2015

ii. Capgemini Young Professional landing page: https://www.nl.capgemini.com/werken-bij-capgemini/jouw-carrierepad/young-professionals, Last visited: 13-08-2015

iii. Rabobank Young Professional landing page: http://www.raboworkx.nl/nl/ict/young-professional-programme-it, Last visited: 13-08-2015

D. List of Figures

Figure 1: The Value Chain by Porter (1985) ... 6 Figure 2: Brand Relationship Spectrum by Aaker & Joachimsthaler (2000) ... 15 Figure 3: HR Business Partnership by Ulrich (1998) ... 36

(36)

35

E. List of Tables

Table i: The VRIO Framework adapted from Barney (1995) ... 8

Table ii: Generations adapted from McCrindle (2003) ... 10

Table iii: Brand Separation Model by Aaker & Joachimsthaler (2000) ... 17

(37)

36

Appendix A – HR Business Partnership Model by Ulrich (1998)

In his article Ulrich suggest there are five (5) competitive challenges for today’s

organisations, being: Globalisation, Profitability Through Growth, Technology, Intellectual

Capital, and Change, Change, and More Change. (Ulrich, 1998) and suggest that in order to

develop the capabilities of dealing with these challenges the HR team has to play a key role. Then Ulrich then suggest the setup of the HR function

to be changed to contain the following four (4) roles which HR must perform, being:

1. Strategic Partner; Aligning the HR processes with business strategy

2. Change Agent; Embracing change & build capacity to capitalize on change.

3. Administrative Expert; Optimisation of current processes to be better, faster, and cheaper. 4. Employee Champion; Keeping employees

engaged and committed to the organisation.

(Figure 3: HR Business Partnership by Ulrich (1998)) Ulrich considers all four (4) tasks to be essential in the he HR mandate and summarizes this as the following equation:

Business Partnership = Strategic Partner + Change Agent + Administrative Expert + Employee Champion

Changes to the HR function / structure would also require a change in behaviour and

knowledge of the HR professional which should start to focus on the value their work creates to the business. Of course HR cannot change itself without support of the business,

therefore Ulrich suggest (senior) management should change their expectations of HR and change their attitude towards the HR staff. (Ulrich, 1998)

(38)

37

Appendix B – Tables

Company / Seniority

Avanade

YSE / Kirkman

HR Director(s) 1 1

HR Staff 3 (none)

Alumni (former Young Professional)

1 2

Young Professionals 4 1

(39)

38 i http://www.avanade.com/nl-nl/press-releases/avanade-top-employer-europa-en-top-employers-ict-2015-page ii_{https://www.nl.capgemini.com/werken-bij-capgemini/jouw-carrierepad/young-professionals} iii_{http://www.raboworkx.nl/nl/ict/young-professional-programme-it}