Feb 15th 2022

What is an employer brand and why is it important?

Getting your employer brand right can be the key to landing the best talent, even during challenging times. Let’s find out more. 

In our previous article about the current candidate shortage, we briefly mentioned employer brands. A company with a great employer brand will find it much simpler (and cheaper) to attract the top talent they need to grow. For example, 92% of people would think about moving to a new role if it was with a company with an excellent corporate reputation. However, some businesses misunderstand what an employer brand is and their efforts backfire. 

In this article, we’ll look at exactly what an employer brand is (and what it isn’t) and explain why it can make all the difference to your hiring.

Employer brand – defined

The CIPD (the trade body for HR professionals) defines an employer brand as ‘how an organisation markets what it has to offer to potential and existing employees’.

When it relates to hiring, your employer brand is what gives a potential candidate that feeling on whether your company is a good place to work (so they apply) or a bad one (so they don’t). For top talent, who have the skills and track record to pick and choose where they work, the employer brand often drives their final decision on where to work.

Your employer brand should align with your company’s values, conveying how you run your hiring process and how you treat your staff when they join. It should promote your company mission, your ethics and how you give your employees a voice. In short, it should define your company as an employer.

Why your employer brand is important

Here are three reasons why a strong employer brand is essential for your business:

• Hiring
• Retention
• Customer trust

Let’s look at each of these in turn.

1 – Hiring

An effective employer brand makes your company desirable to potential future employees, whether they’re actively looking for a new role or not. It will determine who applies for available positions in your organisation. Will it be top talent who align with your values, or people without that deep connection who are happy to work ‘just anywhere’?

For example, research from CISM found that 76% of candidates are explicitly searching for what makes a company an attractive place to work. Even in the aftermath of the pandemic, when an increasing number of employees are working remotely, company culture is still a massive factor for people when they’re deciding whether to apply for a job. 

A strong employer brand can also improve your bottom line by reducing your cost per hire. This is because your employer brand encourages top candidates to come to you, rather than you having to pay to reach them. You’ll also attract passive candidates, who aren’t actively looking for new roles but would love to work for your company. In addition, companies with bad reputations have to offer 10% higher salaries to get people to work for them, according to research from Harvard Business Review.

2 – Retention

When you build a strong employer brand – one that accurately reflects what it’s actually like to work at your company, rather than what you think looks best on paper – successful candidates are more likely to stay at your company for longer. High retention boosts productivity, creates a better culture and lowers your hiring costs. 

Companies that actively invest in their employer brand can reduce staff churn by up to 28%. On the other hand, 30% of new starters will leave their roles before the 90-day point. This indicates either that the job wasn’t everything the employee hoped for (because the employer brand isn’t a true reflection) or that the candidate didn’t have the right attributes for the role (meaning that the employer brand is attracting the wrong type of candidate). Either way, it shows the importance of employer brand to recruiting the right people, then keeping them.

3 – Customer trust

Finally, while your employer brand serves primarily to attract great candidates to your available roles, it can also spread out into the wider world.

Most people prefer to support brands that make a positive difference to the world – and that includes treating their employees well. On the other hand, when news comes out about companies neglecting their employees, it reflects poorly on their entire brand and can even lead to customers taking their business elsewhere. 

For example, back in 2015, Pizza Express were found to be taking money from their serving staff’s tips when the customer paid by card. It was front-page news and there was a public outcry. Eventually, Pizza Express dropped this policy.

Getting your employer brand right

The strength of your employment brand could be the difference between success and failure. Getting it right could mean you recruit the best talent in your industry, at a lower cost, keeping them for longer. Conversely, getting it wrong could spell disaster, even in the eyes of your customers. 

But remember, your employer brand is an ongoing project. It’s never done – and there are no quick fixes. Above all, you must make sure your employer brand is authentic and aligns with your mission and values. 

In our next article, we’ll look at how to build an employer brand that attracts the talent you want.

Want to learn more about employer branding? Join us on 17 Feb at 12pm UK for our lunch and learn webinar: How to build and leverage your employer brand to secure top talent.