Poor employer brand adds 10% to the cost of hiring

Posted on: April 6th, 2016

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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Businesses with an outdated employer brand that hasn’t moved with the times also run the risk of alienating the next generation of talent; but rather than pouring money into additional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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