From a business improvement standpoint, it’s easy to focus your investment on efforts that are more directly related to sales growth and product development and rely on HR and external partners to attract and find the talent to drive the business.
We would like to argue that the better way would be taking a more holistic approach, investing more in the back-end, in this case, the employer brand, is a better long-term strategy for success. After all, if your organisation is struggling to attract and retain talented people, then you would expect to be out-competed.
The employer brand works in many ways the same way as the consumer-facing brand, in that it’s designed to create an appeal that will resonate with its target audience. The product you’re selling is a career, and your job when working on employer brand is not only to make the product seem as attractive as possible but also to shape the product to make it as appealing as possible.
–In this survey from 2016, 89% of HR professionals suggest that recruitment is becoming more like “marketing”.
So what is it that you stand to gain by building a great employer brand, and approaching recruitment in a similar way to marketing? Well, let’s start with the most obvious.
Cost reduction – this effect is realised in several ways, but the primary one is that having a strong employer brand means that people will have your company on their radar, and will apply directly, which means less advertising costs. Candidates are also more likely to accept an employment offer. There is also evidence that employers with a poor reputation will need to offer a 10% higher salary than then one with a better reputation. On average, a number of surveyed companies saw a cost reduction of 43%
Reduced time to hire – closely related to the previous heading, this deserves its own entry. According to Oxford Economics, the actual cost of replacing an employee is over £30,000, so it’s clearly in everyone’s interest to fill the position as quickly as possible. Not to mention the benefits of getting the talent onboard earlier, which leads to…
20% faster growth rate – the cost savings you stand to make pales into insignificance compared to the positive correlation between the company growth rate and a strong employer brand. Research conducted by LinkedIn suggests that the difference is a staggering 20%.
Lower attrition rate – employees who work for organisations that have a strong reputation tend to be more enthusiastic and motivated, which in turn tends to lead to more engaged team members, who stay longer before moving on. This is consistent with research published in the International Journal of Business and Management Invention, where they found that a “statistically significant relationship exists between employer image and retention of employees. It also shows that there is a significant positive relation between employer-culture and retention.”
Employees as ambassadors – it’s a commonly held belief that the best form of marketing is word of mouth, and it turns out that it’s true in the world of employment too. According to Nielsen, 92% of people would trust recommendations from people they know, with the second most trusted source being consumer opinions posted online at 70%. So a company with a strong employer brand and committed employees wield significant power when it comes to attracting the most talented people in the market.
Increased competitiveness – impossible to measure, but hard to deny; the organisation able to offer the best and most complete package, and I mean this in the broadest terms, will attract the best minds. And it’s the best minds that create the sort of competitive advantage that will ensure runaway success.
So if you’re lagging behind on your investment in building your employer brand, now is the time to start.