INTRODUCTION

Many companies from China, India and Russia have entered Western markets in recent years. To be successful in a highly competitive business environment and to gain a foothold in these markets, they require managerial resources (see, eg Child and Rodrigues, 2005; Liu and Tian, 2008; Millar and Choi, 2008). In this context, one of their greatest challenges is to attract qualified local employees in order to exploit and extend their own capabilities (Bulatov, 2001; Berthon et al., 2005; Dietz et al., 2008; Law et al., 2009; Shenkar, 2009; Giriprakash, 2010; Milelli et al., 2010). A key prerequisite for this ability is to stand out against their competitors and to be regarded as attractive employers (Lievens and Highhouse, 2003). Although this is important for the companies in general (Michaels et al., 2001), it is even more relevant for emerging market firms as they have been operating in developed countries for only a short time and are therefore not well-known by potential employees. Moreover, companies of these countries are often faced with a negative country-of-origin image (Pappu et al., 2006; Tung, 2007; Fetscherin and Toncar, 2010; Held and Berg, 2014).

The challenges for Chinese, Indian and Russian companies to recruit qualified employees for their operations in developed countries are emphasized by several case studies and statements of top managers. For example, the CEO of a Chinese machine building company in Germany states in a personal interview that ‘in order to compete in Germany, it is essential to recruit qualified local employees. Even if you have a sound financial background and a proper internationalization strategy […], without the right employees you won’t succeed. This is particularly important when you operate in a highly reputable industry in Germany and compete for qualified employees with your German counterparts […]. In Germany, potential employees think mostly skeptically and negatively about Chinese companies’. With regard to Indian companies in Germany, Tiwari and Herstatt (2010) argue that recruiting and retaining local talent is one of the most salient critical success factors. They furthermore outline that the low attractiveness of Indian companies in Germany often hinders them in successfully hiring qualified employees. This is supported by a statement of a German manager of an Indian pharmaceutical company in Germany, who points out that ‘attracting the right employees is a key challenge for us. This is especially because of negative perceptions of Indian companies held by the applicant population’. In the case of Russian companies in Germany, Tirpitz et al. (2011) accentuate the challenge to recruit qualified employees because of a poor public image. Filippov (2010: 325) also points to the difficulties that Russian companies face when entering new markets and striving to attract local employees because of their poor image and their ‘bunker mentality’. These and other examples show that the recruitment of highly qualified employees is a key requirement for Chinese, Indian and Russian companies in developed markets. In order to achieve this goal, being perceived as an attractive employer by potential employees is crucial.

Despite its high relevance, only few studies are related to the role of emerging market firms as employers (eg, Tung, 2007; Alkire, 2014; Zhu et al., 2014). The focus of most studies on foreign direct investment (FDI) of Chinese, Indian and Russian companies is on various aspects of internationalization strategies, such as determinants of FDI (eg, Buckley et al., 2007; Holtbrügge, and Kreppel, 2012), location choice (eg, Makino et al., 2002; Rugman and Li, 2007; Niosi and Tschang, 2009), market entry mode (eg, Makino et al., 2002; Bonaglia et al., 2007; Khanna et al., 2011; Klossek et al., 2012) and government support (see, eg, Bulatov, 2001; Feinberg and Majumdar, 2001; Holtbrügge and Berning, 2014).

This lack of research concerning the employer attractiveness of emerging market firms in Western countries is surprising despite the high relevance that this topic receives with regard to other countries (eg, Turban, 2001; Backhaus et al., 2002; Clardy, 2005; Froese et al., 2010). The main argument of these studies is that potential employees often lack reliable information and that companies have to adapt adequate communication strategies to enhance their employer attractiveness.

In this context, particularly the signaling of human resource (HR) practices is regarded as an important instrument. While this is indisputable in previous research, little is known about which HR practices potential employees find relevant in their application-decision process. As argued above, this is particularly true for firms from emerging markets. The objective of this study is therefore

  1. 1)

    to analyze the perceived employer attractiveness of Chinese, Indian, and Russian companies in various industries,

  2. 2)

    to explore which HR practices may enhance the employer attractiveness of Chinese, Indian and Russian companies and

  3. 3)

    to analyze whether the aptitude of HR practices for enhancing the employer attractiveness of Chinese, Indian and Russian companies varies between potential employees with different individual characteristics (gender, age, education).

The remainder of the paper is structured as follows. In the next section, the underlying theoretical framework with regard to employer attractiveness, HR practices and signaling theory is outlined. On the basis of these considerations, the research hypotheses are developed. In the following section, the research model is described and the methodology is outlined. Next, the results of the study are reported and discussed. In the final section, the contributions, limitations, and the theoretical and managerial implications of the study are derived.

THEORY AND HYPOTHESES

Employer Attractiveness, HR Practices and Signaling Theory

Previous research has shown that firms that are perceived as attractive employers are more capable to hire qualified employees (see, eg, Turban and Greening, 1997; Cable and Turban, 2001; Collins and Stevens, 2002; Lievens and Highhouse, 2003; Backhaus and Tikoo, 2004; Barrow and Moseley, 2005; Newburry et al., 2006). While previous studies relate to concepts such as corporate image (Fombrun and Shanley, 1990; Gatewood et al., 1993), corporate reputation (Gotsi and Wilson, 2001), company image (Turban, 2001), employer brand (Cable and Turban, 2001), employer of choice (Herman and Gioia, 2001), organizational attractiveness (Thomas and Wise, 1999; Collins and Stevens, 2002; Lievens and Highhouse, 2003; Slaughter et al., 2004), employer brand image (Collins and Stevens, 2002; Turban and Cable, 2003; Backhaus and Tikoo, 2004; Knox and Freeman, 2006), employer image (Lievens et al., 2007; van Hoye, 2008), employer reputation (Davies et al., 2004) or organizational attachment (Casper and Harris, 2008), more recent research often applies the concept of employer attractiveness (Mitlacher and Welker, 2010; Ritz and Waldner, 2011). According to Berthon et al. (2005: 156), this is defined as ‘the envisioned benefits that a potential employee sees in working for a specific organization’.

Several factors have been regarded as benefits by potential employees and thus affect employer attractiveness (eg, Highhouse et al., 1999; Collins and Stevens, 2002; Lievens and Highhouse, 2003; Slaughter et al., 2004; Berthon et al., 2005; Michaelis et al., 2008). In particular, HR practices have been proved to be of significant relevance. For instance, Thomas and Wise (1999) reveal that job factors (eg, compensation and career advancement opportunities) are more important than organizational, diversity and recruiter characteristics. Turban (2001) points out that job security, financial soundness, treatment of employees and opportunities for advancement are highly relevant. Batt (2002) emphasizes the role of motivation-enhancing practices, training, employment security and relative high salary. In their study on organizational attractiveness and individual differences, Berthon et al. (2005) refer to an above average salary and an attractive overall compensation package as well as career enhancing experiences, among others. Further studies analyze the relevance of additional HR practices such as opportunities for advancement, location or career programs (Harris and Fink, 1987; Turban and Keon, 1993; Honeycutt and Rosen, 1997; Cable and Graham, 2000; Lievens et al., 2001; Lievens and Highhouse, 2003; Chapman et al., 2005; Highhouse et al. 2009; Backes-Gellner and Tuor, 2010; Froese et al., 2010).

Previous research reveals that the HR practices of a company do not influence its employer attractiveness automatically. Instead, their effects also depend on whether and being perceived by potential employees. Hence, to improve employer attractiveness it is not only important to implement adequate HR practices but to communicate their implementation to the job market (Wilden et al., 2010). This aspect is often analyzed from the perspective of signaling theory (Berthon et al., 2005; Backes-Gellner and Tuor, 2010).

Signaling theory is primarily concerned with the information asymmetry between two parties. In general, one party (the sender) has information that the other party (the receiver) does not, and the first party decides to send relevant information to the latter (signal) (Spence, 1973, 2002). The signal is then subject to perception and interpretation by the receiver. By doing so, information asymmetry is reduced. Thus, signaling theory is supportive in analyzing the relationship between signals and their quality sent by the sender and the interpretation of the signal by the receiver. Moreover, signaling theory helps to describe behavior when two parties have access to different information (Connelly et al., 2011).

The concept of signaling has been applied in a wide range of selection processes in which two parties are involved that do not share the same information. Examples comprise, among others, commercial law (Stephenson, 2006), risk perception (Levy and Lazarovich-Porat, 1995) and venture capitalism (Busenitz et al., 2000). With regard to organizational research, signaling theory has been used related to issues such as corporate governance (eg, Johnson and Greening, 1999; Daily et al., 2003), company popularity (Rindova et al., 2006), brand equity management (Boulding and Kirmani, 1993; Rao et al., 1999), or the signaling effect of top management teams (Carpenter and Fredrickson, 2001; for an overview see Connelly et al., 2011).

In the field of HR, signaling theory has been applied particularly in the context of attracting and recruiting employees. The classical study of Spence (1973) analyzes how job seekers signal their qualifications by informing the potential employer about their educational level in order to increase their opportunities on the job market. The educational level of job seekers thus acts as a signal for their qualification. Subsequently, a number of studies have investigated how signaling occurs during the recruitment process (eg, Rynes et al., 2006; Suazo et al., 2009). While Spence’s original job market signaling model focused on the potential employee as the sender of signals, some studies take the contrary point of view and see the company as the sender of signals in order to attract potential employees. However, this stream of research is basically centered on single recruitment instruments, such as career fairs (Thomas and Wise, 1999) or recruitment advertising (Collins and Stevens, 2002; Allen et al., 2007). Only few studies investigated employer signaling on a more general level (Schmidtke and Backes-Gellner, 2002; Backes-Gellner and Tuor, 2010; Falk and Mohnen, 2011). As Celani and Singh (2011) argue, despite the widespread acceptance of signaling theory in recruitment research, little is known about the relationship between an organization’s HR practices and applicant attraction outcomes.

Summarizing the results of previous research, we argue that the employer attractiveness of a firm depends on the characteristics of the sender (ie, the company as an employer), the signal (ie, the HR practices) and the receiver (ie, the potential employee). In the following, these considerations will be applied to firms from China, India and Russia, and the research hypotheses of our study will be derived. An overview of our research model and hypotheses is presented in Figure 1.

Figure 1
figure 1

Research model and hypotheses

Full size image

Hypotheses

Previous studies reveal that the perceived employer attractiveness of a firm largely depends on the country it originates from (Berthon et al., 2005; Froese et al., 2010). For example, Newburry et al. (2006) show that the US students prefer jobs in companies that have their headquarters in the home country while jobs in companies from emerging markets are less attractive. Other studies confirm these results, that is, national companies are generally preferred by prospective applicants, and well-known companies are preferred over less well-known ones from emerging countries with lower employer attractiveness (Aperia et al., 2004; Fombrun and van Riel, 2004).

With regard to Chinese and Indian firms in Europe and the United States, the study of Alkire (2014) reveals significant negative country-of-origin effects in comparison to local firms that negatively impact their perceived attractiveness as employers. Particularly American respondents in this study were significantly less attracted to emerging market firms than French and German respondents. According to Tung (2007), the most salient factor for not willing to work for Chinese companies is disagreement with Chinese government policies and programs. Moreover, the low status associated with working for a Chinese company was named as major reason by the respondents from Canada and the United States. Another manifestation of country-of-origin effects may be the perception that firms from emerging markets underestimate the significance of labor relations and cooperative leadership expectations in the Western countries (Zhu et al., 2014).

We argue that firms from emerging markets are not only faced with negative country-of-origin effects in general, but that there are also country differences between various emerging markets. For example, a report published by Huawei Technologies (2014) shows that German respondents have a more positive perception of China than of India and Russia. Twenty-four percent of the respondents perceive China as very positive, 20 percent India and 18 percent Russia. In particular, China’s economic success is highly acknowledged. The comparably more positive image of China in comparison to India among German consumers is also reflected by the study of Kreppel and Holtbrügge (2013). The authors explain this result by the fact that China has generated higher growth rates and attracted more public attention because of the global events, such as the Olympic Games in Beijing 2008 and the Expo in Shanghai in 2010, than India which is often mentioned in the context of negative events, such as poverty and environmental disasters. In comparison, a report published by Köcher (2008) reveals that Russia is often associated by Germans with corruption, strong influence of the intelligence apparatus and high crime rates. According to a report of Tirpitz et al. (2011), the negative image of Russian companies in Germany is particularly attributed to the fear of massive state interventions. We argue that these different country images also influence the perceived employer attractiveness of emerging market firms and propose:

H1:

  • The perceived employer attractiveness of Chinese, Indian and Russian firms depends on their country-of-origin.

Another important predictor of employer attractiveness is the industry a company belongs to. This factor is especially relevant when potential employees do not have much knowledge about the company itself (eg, Perkins et al., 2000; Lievens and Highhouse, 2003; Reuber and Fischer, 2011). The results of Burmann et al. (2008) confirm that the industry type has a significant influence on employer attractiveness in the case of banking and insurance. Knox and Freeman (2006) show that industry image is an important factor with regard to employer attractiveness. In order to control for industry effects, many studies in this field of research focus on a single industry when evaluating employer attractiveness, for example, the banking sector (Greyser, 1999; Lievens and Highhouse, 2003), the retail sector (Devendorf and Highhouse, 2008), the armed forces (Lievens et al., 2005) or the fast-food industry (Backhaus et al., 2002).

Following studies of brand image, we argue that industry is also relevant when evaluating the employer attractiveness of Chinese, Indian and Russian firms. For example, Pappu et al. (2006) revealed significant differences between companies in the automotive and televisions industries. Laroche et al. (2005) show that there exist favorable product-country matches for automobiles and watches for Germany, Japan and the United States, while automobiles and watches from Mexico or Hungary are not perceived as good. Referring to the three countries in our study, previous research shows that Indian IT companies have a more positive image in Western countries than carmakers of this country. Similarly, Chinese home appliances have a better reputation than automotives. Positive examples from Russia are vodka and caviar, while the image of Russian airplanes is bad (Johansson et al., 1994; Fetscherin and Toncar, 2010). On the basis of these considerations, we propose:

H2:

  • The perceived employer attractiveness of Chinese, Indian and Russian firms differs between various industries.

The second element of our research model is the signals that firms send to potential employees. Previous studies reveal that different HR practices have different signaling effects on the perceived employer attractiveness. Berthon et al. (2005) find that a self-dependent and creative working environment is most important with regard to employer attractiveness for potential employees in Austria, followed by an above average basic salary, an attractive overall compensation package and career advancement opportunities, while job security is named afterwards. The fact that the company produces high-quality and innovative products and services is also less important. In their study among students and employees in the banking sector in the United States, Lievens and Highhouse (2003) show that compensation and benefits are most important with regard to employer attractiveness, while career advancement opportunities are ranked lower. Job security did not have a significant influence on employer attractiveness. The studies of Turban (2001) and Batt (2002) reveal job security and opportunities for advancement of being highly important. Thus, previous studies show that various HR practices have different signaling effects, although their results are not consistent. Applying these considerations to the context of our study leads us to the following hypothesis:

H3:

  • HR practices have different signaling effects on the perceived employer attractiveness of Chinese, Indian and Russian firms.

As most Chinese, Indian and Russian firms have entered the German market only recently, many potential employees are not yet familiar with them. In this case, the country-of-origin is argued to moderate the signaling effects of HR practices. For example, the evaluation of HR practices such as compensation or career programs may be better for companies originating in a country with a more positive image than for those that are confronted with more negative country-of-origin effects (eg, Froese et al., 2010; Zaveri and Mulye, 2010). One reason for this moderating relationship may be that negative country-of-origin effects may outshine the signaling effects of HR practices. Moreover, more pronounced HR practices may be needed to compensate for the negative country image of a firm. Positive country-of-origin effects, on the other hand, may intensify the signaling effects of HR. Therefore, the following hypothesis is proposed:

H4:

  • The signaling effects of HR practices differ between Chinese, Indian and Russian firms.

The third element of our research model is the receiver. On the basis of the signaling theory, we argue that the interpretation of HR policies that are signaled by firms largely depends on the personal characteristics of potential employees. Previous research shows that gender, age and educational level are of particular relevance in this context (eg, Albinger and Freeman, 2000; Backhaus et al., 2002; Newburry et al., 2006; Froese et al., 2010).

Following studies of brand image (Ahmed and d’Astous, 2002; Pappu et al., 2007; Demirbag et al., 2010; Wang and Gao, 2010), we argue that personal characteristics are also relevant when evaluating the employer attractiveness of Chinese, Indian and Russian firms. Younger job seekers have experienced the opening and liberalization of these three countries in recent years, while older individuals were socialized in a time when the three countries had been regarded as socialist, backward and – in the case of China and Russia – hostile. Thus, the former are supposed to have a more favorable image of Chinese, Indian and Russian firms. Female employees might fear discriminatory practices because of the stereotype gender roles in those countries, while this is supposed to be less relevant for male job seekers (Newburry et al., 2006; Froese et al., 2010). Concerning educational level, we argue that higher educated people tend to have more job choices. Previous research reveals that highly qualified individuals with a variety of employment alternatives regard firm reputation as important criterion of employer selection (Cable and Turban, 2003). Thus, they will perceive working for firms originating in China, India and Russia who are argued to suffer from negative country-of-origin effects as less attractive than less-educated individuals. On the basis of these considerations we propose:

H5:

  • The perceived employer attractiveness of Chinese, Indian and Russian firms varies between individuals with different characteristics (age, gender, educational level).

We argue that personal characteristics of potential employees do not only affect the perceived attractiveness of firms as employers but also moderate the signaling effects of their HR practices. For example, previous studies reveal that female and male respondents perceive the relevance of HR practices differently (Albinger and Freeman, 2000; Greening and Turban, 2000; Gould-Williams, 2003). According to the study of Batt and Valcour (2001), male respondents regard higher compensation as more important than their female counterparts. The latter find job security more important. However, another study of Backhaus et al. (2002) could not find any gender-related differences in the evaluation of HR practices.

Referring to age, previous studies show that younger job seekers value a creative working place and career advancement opportunities more than the older individuals (Albinger and Freeman, 2000). According to Edgar and Geare (2004), the latter find ongoing training more important than the younger employees. The study of Kovach (1987) reveals that the elder employees find job security more relevant than the younger ones. However, the study of Kinnie et al. (2005) does not assert any influence of age on the perceived relevance of HR practices.

Finally, previous research reveals that the evaluation of HR practices may also be affected by the level of education. Potential employees with a lower educational level are supposed to have fewer job choices. Thus, they may regard job security as more important than potential employees with a higher educational level, while the latter may foster career advancement opportunities (eg, Albinger and Freeman, 2000; Lievens and Highhouse, 2003). Martin et al. (2010) argue that higher educated people can choose between different jobs and can therefore often negotiate higher compensation. Moreover, people with a higher education are supposed to look for ongoing learning during the job (Batt, 2002). Furthermore, they may value an international working atmosphere and the opportunity to aim at foreign assignments more than potential employees with a lower level of education (Newburry et al., 2006). On the basis of these arguments, the following hypothesis is proposed:

H6:

  • The signaling effects of HR practices vary between individuals with different characteristics (age, gender, educational level).

METHODOLOGY

Sample

The study was conducted in Germany between November and December 2008. A total of 726 responses were collected through systematic sampling. On the basis of the previous studies, a questionnaire was developed and adapted to the context of this study. As the respondents were Germans, questions that were derived from previous studies published in English were translated into German. Afterwards the questionnaire was back-translated to ensure reliability and appropriate translation of the items. In a pretest, the questionnaire was distributed to a sample of 50 individuals and subsequently revised to improve intelligibility. As individuals’ country images were known to differ dependent on their home country and it was intended to control for this effect, only German respondents were included (see also Pappu et al., 2007).

The sample comprises 311 female respondents (42.8 percent) and 415 male respondents (57.2 percent) (Table 1). The age group is from 16 to 60 years with an average age of 33.35 years. People above 60 were not considered to take part in the survey as our study is focused on the working population. The sample is shifted toward younger and more highly educated people. This is relevant for this study, as younger and more highly educated people are supposed to be the main target group for Chinese, Indian and Russian companies in their strive to become a global player, especially as these are looking for high quality employees in order to gain competitive advantage. With regard to country differences, ANOVA analyses show that the distributions of gender (p=0.000) and educational level (p=0.017) differ significantly, although this is not the case for age (p=0.297). To control for this effect, an analysis was run with the data of the overrepresented group weighted according to the real distribution. The results showed no differences compared with the total sample. Therefore, the total sample was used in order to include all available information.

Table 1 Demographic Profile of the Three Subsamples and the Total Sample
Full size table

The participants were randomly assigned to three subsamples, that is, one group to Chinese companies, one group to Indian companies and another group to Russian companies. Pretests showed that the willingness to evaluate 28 items for the assessment of attractiveness and HR practices of companies from three countries is very low and would lead to a very high drop-out-rate. Moreover, respondents tended to have difficulties in distinguishing between Chinese, Indian and Russian companies when asked questions with regard to all three countries. Only fully completed questionnaires were included in our study. In the end, we had 224 respondents evaluating Chinese companies, 284 respondents evaluating Indian companies and 218 respondents evaluating Russian companies.

Measures

The measures were derived from previous studies on employer attractiveness and adapted to the specific research questions and country conditions.

Country of origin: Three identical questionnaires were distributed to three sub-samples with regard to (1) Chinese, (2) Indian and (3) Russian companies. All questionnaires contained the same questions.

Employer attractiveness: Respondents were asked to rate the employer attractiveness of Chinese, Indian and Russian companies in ten different industries on a 7-point-Likert scale (1=‘not attractive at all’, 7=‘highly attractive’). The industry classification corresponds to the Standard Industrial Classification and involves automotives, bank/insurance, the chemical industry, consumer goods, consultancy, engineering, IT & electronics, media, pharmaceuticals and transport & logistics (see also Turban and Greening, 1997; Newburry et al., 2006). For overall employer attractiveness, the arithmetical average of the industry values was calculated.

HR practices: Respondents were asked to rate the relevance of different HR practices with regard to employer attractiveness on a 7-point-Likert scale by answering the question ‘I would regard Chinese (Indian, Russian) companies as an attractive place to work if they provide …’ (1=‘not attractive at all’, 7=‘highly attractive’). Fourteen HR practices that proved to be relevant in previous studies, such as opportunities for advancement, location, career programs, job security, salary/pay, educational opportunities, work-life-balance and so on were included in the questionnaire (see, eg, Turban and Keon, 1993; Honeycutt and Rosen, 1997; Cable and Graham, 2000; Lievens et al., 2001; Lievens and Highhouse, 2003; Berthon et al., 2005; Highhouse et al. 2009; Jiang and Iles, 2011).

Demographics: Respondents were asked to fill in their gender, age and level of education (see, eg, Greening and Turban, 2000; Backhaus et al., 2002; Lievens and Highhouse, 2003; Berthon, et al., 2005). For the latter, the highest obtained degree (primary school (four years), secondary school (five years), secondary school (six years)), high school and graduate school had to be named. An ordinal scale with 1=‘primary school’ and 5=‘graduate school’ was constructed.

RESULTS AND DISCUSSION

Employer Attractiveness and Firm-Level Characteristics

In order to test the hypotheses, multivariate analysis of variance (MANOVA) and regression analyses were conducted. Table 2 shows the country- and industry-wise analyses of employer attractiveness. Industries with values that are above average are marked in bold letters and those with values below average in italics.

Table 2 Perceived Employer Attractiveness of Chinese, Indian and Russian Firms in Different Industries (Means, SD and MANOVA)
Full size table

H1 proposed effects of the country of origin on the perceived employer attractiveness of Chinese, Indian and Russian companies. The results show that the Indian companies (3.34) are rated as a more attractive place to work than the Russian (3.20) and the Chinese companies (3.16). However, the differences in means are very low and statistically not significant. Thus, H1 is not supported. A possible explanation for this finding, which is in contrast to brand image perceptions of firms from these countries (eg, Johansson et al., 1994; Pappu et al., 2006; Fetscherin and Toncar, 2010; Kreppel and Holtbrügge, 2013), is the structure of the German labor market. While consumers can choose products from a variety of different countries with some industries even dominated by foreign products, the vast majority of employers are German companies. Thus, job seekers have a less differentiated perception of foreign firms than consumers.

The industry-wise comparison of the mean values for all three countries in our sample shows that IT & electronics is regarded as most attractive (3.93), followed by consumer goods (3.54) and transports & logistics (3.49). Automotives (3.03), consultancy (2.96) and bank/insurance (2.65) are regarded as least attractive industries. This is in contrast to the findings of recent studies in Germany which find that the students and employees regard working in banking/insurance or consultancy as highly attractive (Burmann and Schaefer, 2005; Eckhardt, 2008). Other surveys indicate that the most attractive employers in Germany are automotive firms (Horizont, 2011; KPMG, 2011; Universum Global, 2015).

With regard to H2, the country-wise analysis reveals significant differences between industries. For China, firms in the IT & electronics, transport & logistics, and consumer goods industry are perceived as the most attractive employers. The mean values are significantly higher than the average value for this country. For India, IT & electronics, media and consumer goods are the most attractive industries, and for Russia, firms in transports & logistics, consumer goods and engineering are preferred. Thus, H2 is supported, that is, the perceived attractiveness of Chinese, Indian and Russian firms differs between various industries. The variance of these industry effects is similar in all the three countries (China: SD=1.195; India: SD=1.198; Russia: SD=1.200).

Employer Attractiveness and HR Practices

H3 proposed different signaling effects of HR practices on the perceived employer attractiveness. Table 3 shows the country-wise analysis of 14 HR practices. All values that are above average are marked in bold letters and those with values below average in italics.

Table 3 Relevance of HR Practices for Perceived Employer Attractiveness (Means, SD and MANOVA)
Full size table

In general, the results provide support for H3. The results show that high salary/compensation is regarded as the most relevant signal, followed by job security a good work-life-balance additional benefits and self-dependent and creative work conditions Least relevant are popular websites and university recruiting/job fairs.

A comparison with the results of previous studies of the employer attractiveness of German firms in Germany reveals both similarities and remarkable differences. Franke (2000) found that career advancement is the most important determinant of employer selection among business administration students. In a study among business administration graduate students of Bahner and Eisele (2004), a good work atmosphere proved to be most important. Compensation comes only second, followed by career advancement. Moreover, international activities and assignments are regarded as more important than in our study. One explanation for this difference may be that our respondents anticipated international activities in the home countries of the considered firms, that is, China, India and Russia, which they regarded as not appealing. The relatively low relevance of career advancement and further training in our study may be explained by the fact that – given their overall low employer attractiveness – working for a Chinese, Indian or Russian firm in Germany is regarded as the second-best option and as temporary, only. Under this condition, short-term financial rewards are more important than long-term career opportunities. Moreover, the relatively high relevance of job security in comparison to studies of the employer attractiveness of German firms may be explained by the fact that our survey took place in November and December 2008, that is, at the peak of the financial crisis when job security in Germany was generally low.

H4 proposed that the signaling effects of HR practices differ between firms from China, India and Russia. Table 3 shows that compensation is most relevant in all three countries (China: India: Russia: ). Job security is ranked in second place for China and India and in third place for Russia Additional benefits are ranked third in the case of Chinese firms Indian, and Russian firms A MANOVA reveals no significant differences for compensation (p=0.197), however, for job security (p=0.023), good work-life-balance (p=0.040), and additional benefits and services (p=0.047). These three HR practices are regarded as more relevant in Russia than in the other two countries. In total, significant differences are revealed for 13 out of 14 HR practices included in our study, thus supporting H4.

Employer Attractiveness, HR Practices and Individual Characteristics (Gender, Age and Educational Level)

Our last two hypotheses focused on the individual characteristics of potential employees and their impact on the evaluation of employer attractiveness and HR practices. H5 proposed that the perceived employer attractiveness of Chinese, Indian and Russian firms varies between individuals with different characteristics in terms of gender, age and educational level. In order to test this hypothesis, linear regression analyses were conducted.

Table 4 shows that there are no significant differences between the perceived employer attractiveness of Chinese, Indian and Russian companies with regard to gender. Similarly, no age effect is found. The level of education has a negative effect on the perceived employer attractiveness, however, this effect is significant only for Indian companies, although on a very high level (p=0.003). In total, the three variables explain only a very low amount of variance of the dependent variable.

Table 4 Univariate Linear Regression of Individual Characteristics on Perceived Employer Attractiveness
Full size table

Finally, H6 proposed that the signaling effects of HR practices vary between individuals with different characteristics. Table 5 shows that, altogether, gender has no impact with only one regression coefficient being significant. Moreover, age affects 5 out of 14 and the level of education 4 out of 14 HR policies, although on a low to modest level, only. A strong effect on a p<0.01-level of significance can be found only for locations with favorable rent prices/rates, which are significantly more relevant for younger and less educated respondents than for older and better educated ones. In total, there is no support for H6 in terms of gender and only partial support in terms of age and level of education.

Table 5 Individual Characteristics and HR Factors. Results of Uni-Variate Linear Regression Analyses (N=726)
Full size table

An explanation for the lack of support for H5 and H6 may be that individual characteristics do not only influence the perception of Chinese, Indian and Russian firms as potential employers, but also the evaluation of job opportunities in general. For example, older and less educated job seekers may find job opportunities generally, regardless of employer nationality, more positive than younger and higher educated individuals. Furthermore, the relationship between individual characteristics and perceived employer attractiveness may be moderated by additional factors such as employment status, unemployment rates or economic trends that were not considered in our study.

CONTRIBUTIONS, IMPLICATIONS AND LIMITATIONS

The purpose of this study was to analyze the perceived employer attractiveness of Chinese, Indian and Russian companies in different industries in Germany and to explore how this may be enhanced by various HR practices. Moreover, we sought to analyze whether the aptitude of HR practices for enhancing the employer attractiveness of Chinese, Indian and Russian companies varies between potential employees with different individual characteristics. On the basis of signaling theory, a study among 726 German individuals was conducted.

This paper extends the job market signaling model of Spence (1973), and further studies of employer attractiveness, by focusing on what employers may signal to the job market in order to be perceived as an attractive place to work. It is one of the first studies to analyze the employer attractiveness of Chinese, Indian and Russian companies, that is, firms from emerging markets that are substantially investing in Western countries. It is based on a self-collected, matched dataset instead of a mere student sample that allows for a more comprehensive and realistic picture. Determinants on the sender, signal and receiver level are included and their impact on employer attractiveness and the relationship with HR practices is analyzed. By doing so, the study gives vital insights for managers and HR professionals of Chinese, Indian and Russian companies in Germany and also enhances our theoretical understanding of the determinants of employer attractiveness.

An important result of this study is that the employer attractiveness of Chinese, Indian and Russian companies differs significantly among industries. While this is generally in line with previous research, our study reveals remarkable differences to studies on employer attractiveness of German companies in Germany with regard to industry preferences. While the latter shows that employers in the automotive and consulting sectors are most attractive, these industries are ranked at the lower end in our study. On the contrary, most respondents would like to work in Chinese, Indian and Russian companies in the IT & Electronics industry.

Our study also contributes to research on the relationship between the HR practices and the employer attractiveness (Alniacik et al., 2012). In contrast to previous studies in Germany we revealed a higher relevance of compensation and job security as HR practices, while the relevance of career advancement and training is much lower. One managerial implication that can be derived from this result is that Chinese, Indian and Russian firms should focus on these HR practices in their recruitment and employee attraction strategies. Future studies may apply conjoint analyses (Flaherty and Pappas, 2004; Tumasjan et al., 2011) to test whether they should also offer higher salaries than their local competitors in order to attract qualified employees. It would also be interesting to analyze whether the high relevance of compensation among German job seekers changes over time and whether other HR factors will become more relevant once Chinese, Indian and Russian companies have established themselves in Germany and are better known by potential employees.

An important theoretical contribution of our study is to show how a firm’s nationality may impact its perception as an employer. In response to the call for more research on the impact of country-of-origin effects on employer attractiveness (Berthon et al., 2005; Zaveri and Mulye, 2010) our study reveals that these effects are more complex than often assumed in the literature. For example, we demonstrated that country-of-origin effects vary between industries and HR practices. Thus, future studies should not only consider direct relationships, but also possible interaction effects and conceptualize the country of origin as a moderator of individual and firm-level characteristics and employer attractiveness.

A further result of this study is that the perceived employer attractiveness of Chinese, Indian and Russian firms depends, only to a minor extent, on individual characteristics of potential job seekers in terms of gender, age and educational level. A theoretical implication that can be derived from this finding is to extend our conceptual framework with additional moderators such as employment status, unemployment rates or economic trends that were not considered in our study. Depending on the country setting, the inclusion of further variables may be useful.

A limitation of our study is that we were not able to analyze employer attractiveness on the firm level. Given the fact that Chinese, Indian and Russian companies are active in Germany for only a short time, we believe that only very few respondents would have been aware of concrete examples. It would also be interesting to repeat this study in a few years and to analyze whether the attitudes of job seekers toward firms from these countries change once they have established themselves on the German job market, and potential employees have become more familiar with them. Finally, an interesting direction for future research would be to compare the perceived employer attractiveness between job seekers and actual employees of Chinese, Indian and Russian companies. This would not only help companies from these countries to communicate their HR policies more adequately, but enhance our knowledge of signaling effects in the area of HRM in a more general sense.