Why Companies Should Develop their Employer Brand
Author: Victoria Antunevich, Senior Account Manager, GROU agency
The question of employer branding has been acquiring popularity nowadays. Abroad Numerous companies abroad invest huge amounts of time and money in employer brand developing. Will these investments be returned? And what would be more important for attracting and retaining talents: strong employer brand or amount of compensation that the company offers? Let’s try to sort it out.
What is employer brand? What is the difference between it and brand of a company or its products?
Employer brand is a complex of efforts made by the company to interact with existing and potential employees, which makes it an attractive place to work. In other words, it is a combination of functional and psychological benefits, which an employee gets while working in a company. It’s always associated with your current and potential colleagues in your mind. This is what they feel and think about you as a place of work, and what they share with other people. In addition, the image of the employer is also shaped by a feedback and impressions of the former employees.
The integral part of an employer brand is an employee value proposition (EVP). This is a set of tangible and intangible benefits offered to an employee in exchange for his knowledge, skills, abilities and loyalty. In this case, proposed benefits (attributes) should be of some value for the target audience: employees and candidates. Typically external attributes of EVP are aimed at attracting talents to the company, as well as internal ones – at the talents within the company, are distinguished.
One should also note that there are two different things: building a company brand in the market and building employer brand. The first one ensures the company’s attractiveness in the eyes of clients, partners and other stakeholders, and the second one – only in the eyes of employees and candidates. Employer brand can be successfully built without a market brand, and vice versa. Nevertheless, as practice confirms, companies become the most attractive employers having made their name on the market.
What is the benefit of successful employer brand for business? Why do companies need to spend their own resources on it?
First, strong employer brand directly impacts company’s business performance – according to the recent research, financial results are 2 times higher than those of similar companies in the market, and the level of staff involvement – 5 times higher.
In other words, this mechanism looks like as follows: satisfied employees – increasing their involvement in the processes and life of the company – improving the quality of work – increasing customer satisfaction, which ultimately significantly affects the company’s financial performance.
In addition, according to the Employer Brand Institute, strong employer brand also has the following benefits:
• Recognition of the company as the best place to work (32%)
• Facilitating the attraction of candidates (28%)
• Decrease in personnel turnover (25%)
• Reduction of personnel recruitment costs (25%)
Employees are the most influential ambassadors of your brand
It is important for top managers to know that today most of the information about the company comes from its employees, and not from the media, as it is commonly believed. According to the Harvard Business Review, the staff itself is the source of 80% reputation crises. These are your employees who are the main ambassadors of your brand and today their role is constantly growing. Their behavior could strengthen or undermine trust in the organization if its actions does not meet the declared values. It is impossible just to declare the corporate culture and values of the organization to people who directly experience them 40-60 hours a week. Any declarations must be supported by clear and understandable actions.
Fighting for talents
Speed of technological changes, flexibility and clipping thinking, globalization of the labor market have made employer’s position vulnerable today. One of the main challenges of modern employers is fighting for talents. Nowadays we have been witnessing shift of the whole paradigm of perception and attitude to work. According to the Employer Brand Research 2017, it’s important to be part of a company with the right values and corporate culture for 88% of millennials; 87% came to the company because their own values were the same as the company’s ones; 50% are not ready to work in companies with poor reputation, even if the salary is high there; companies with bad reputation pay 10% more for recruiting of one employee. In other words, strong employer brand today is not just the latest HR trend; it is the key factor for successful business development.
Of course, employer branding is not panacea for any inconvenience that business can face from time to time, but it can become your rescue circle in difficult times. This is exactly the issue, which could retain people in the company during the crisis, when it is impossible to involve financial incentives.
To make a conclusion of all abovementioned – the result that could be achieved is worth the money spent. After all, every employer wants his business to develop, and his company to be considered the best place to work. This is not difficult to achieve thorough analysis, regular work, determination and perseverance, as well as indelible belief in your brand.