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How shoddy employer branding costs recruiters dearly

Poor employer branding can negatively impact a business’s bottom line

According to research carried out in the US, businesses with a negative reputation and poor brand perception are forced to advertise increased salaries to encourage prospective employees to apply for positions.

A company’s reputation is not just important for winning new customers but is also vital for attracting the best candidates, and it is a well-known fact that staff members are one of the most valuable assets of a business.

The LinkedIn study looked at a typical national sample of over 1,000 professionals in full-time work and found that a business with 10,000 employees can spend in the region of $7.6m (£5.3m) in further salaries to recompense for its negative brand image. The report, which was published in the Harvard Business Review, also stated that a company with a poor reputation would find that a 10% pay increase was the minimum amount necessary to persuade an applicant to take the job, which equates to around $4,723 (£3,297) per vacancy.

The findings of the research show that there are three determining influences that can result in a company gaining a poor reputation: sub-par leadership, dysfunctional teams and anxieties over job security. If a company showed any of these factors, almost 50% of the people who took part in the survey firmly believed that they would refuse to work there.

According to an expert source, this means businesses with an undesirable or out-of-date employer brand could miss out on successfully attracting new and exciting talent that could drive companies forward. It is therefore essential for a business to quickly and efficiently resolve a negative reputation, which is a far more cost-effective option than throwing money into the recruitment process.

Richard Mosley, author of The Employer Brand, feels that the biggest change within employer branding is the shift towards utilising social media and featuring employee-generated and authentic content. Mosley believes that this has come about because social media platforms offer greater transparency to employer branding and can deliver a more positive brand experience.

Harvard Business Review reports that businesses had substantially more positive results for employer branding once they had showcased fragments of their employee environment across social media. One such company was InMobi, which saw the number of people applying for jobs increase fivefold over six months. This resulted in an estimated saving of $1.7m (£1.2m) within one year.

Mosley points out that a crucial first step in changing your employer brand is to recognise why your business is struggling to find applicants. He feels that companies need to find out what the talent groups they are seeking to employ think about the business. Once this is known, it is easier to define a more persuasive employer brand.

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