Poor employer brand adds 10% to the cost of hiring

Posted on: April 6th, 2016


New LinkedIn research has revealed that poor employer brands mean companies have to spend more in order to attract the right candidates, the CIPD website reports.

According to a study by the professional social network, which was published in the Harvard Business Review, this is largely because these companies are having to offer higher-than-expected pay packets to make up for their negative reputation, which has put candidates off applying.

Looking at a sample of 1,000 full-time professionals in the US, it was found that candidates needed a minimum 10% pay increase to accept a job working for a company they had a negative impression of. This means that an organisation with 10,000 employees, for example, could be shelling out as much as $7.6 million (£5.3 million) in extra wages to counteract its poor employer image.

The report suggested that three factors contribute to unsatisfactory company reputations: below-par leadership, dysfuntional teams and fears about job security. Nearly half of those surveyed said they would turn down a job at a company that displayed all three factors.

Businesses with an outdated employer brand that hasn’t moved with the times also run the risk of alienating the next generation of talent; but rather than pouring money into additional wages, a more cost-effective solution is to improve or repair their employer brand.

One expert – Richard Mosley, author of The Employer Brand – explained that the biggest change in employer branding in recent years has been a shift from using recruitment advertising campaigns to “a more diverse flow of authentic, employee-generated content through social media.”

“Given the greater transparency that social media has brought to employer branding, and the growing role of employee advocacy, there has been a correspondingly greater emphasis on delivering a more consistently positive employer brand experience,” he added.

Crucially, businesses that showcased aspects of their employee environment on social media platforms witnessed improved results in their employer brand – one such company even reported five times more applications over a period of six months.

So, what is your company doing to promote its employer brand this year?

Image: LinkedIn Chocolate by Nan Palmero available under the (CC by 2.0) license

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