A bad reputation costs a company at least 10 per cent more per hire

By Wade Burgess

A few years ago, domain registrar and web hosting company GoDaddy was known for its racy ads. While they may have gotten attention in the media, they didn’t help the company do one important thing: hire women.

In 2014, women constituted only 14% of GoDaddy’s engineering interns and new graduate hires. Realizing it had a problem, the company tackled the issue head-on, speaking at women-in-tech conferences, training hiring managers to address bias, and live-streaming events that featured inspirational women or highlighted women’s rights issues. Today, nearly 40% of GoDaddy’s tech hires are female.

So how much does a company’s reputation as a place to work — its employer brand — really matter when it comes to hiring? And what exactly makes up a bad reputation or a good one?

To learn more about how consumers evaluate a company’s employer brand and then translate their impressions into dollars, we recently partnered with ICM Unlimited to conduct a survey among a nationally representative sample of 1,003 full-time professionals in the US.

Our research found that the top three factors that contribute most to a bad reputation as a place to work are concerns about job security, dysfunctional teams, and poor leadership. The top three factors associated with a good reputation as an employer are stability, opportunities for career growth, and the ability to work with a top-notch team.

Nearly half of the people we surveyed would entirely rule out taking a job with a company that exhibited the top three negative employer brand factors, regardless of any pay increase. Even a 10% raise would only tempt 28% of them to join such a company.

No business wants to pay a premium in higher salaries because of a bad reputation. But there are ways to both address the root of your company’s bad reputation and better communicate the positives of what it’s like to work at your company to potential employees.

And because not everyone is dealing in extremes, these tactics can also help those who may not have a bad reputation but suffer from a misdirected, misunderstood, or outdated employer brand. These companies might not be paying thousands in salary premiums, but they’re still missing opportunities to attract and engage the talented people they need.

First, find out where your reputation stands. If you think you have reputation issues, take the time to understand what prospective employees actually think. Following the Deepwater Horizon disaster, BP conducted surveys to learn how people actually felt about potentially working at the beleaguered company. Not only did a lot of people not realize BP was hiring, but many were interested in jobs.

BP also gained insight into what candidates were concerned about: the company’s financial position and safety record, of course, but also their career goals and whether they’d be a fit for the culture.

Figure out your employee value proposition. Do you understand what inspires your workforce to do their jobs each day? Knowing this will inform your brand efforts and help engage your prospects. Perhaps your team loves the free-spirited culture or your mentorship opportunities. If you don’t know, ask. InMobi, a performance-based ad network in India, surveyed 1,000 employees to learn what they valued about their workplace. When the company discovered its culture and practices set it apart, it was able to build employer brand campaigns around those concepts.

InMobi created a number of videos showcasing work life there, blogged about its culture and employee value proposition, and encouraged employees to get active on social. Its efforts caught the attention of the media, resulting in several favourable stories. Within six months InMobi saw applications increase fivefold. Interestingly, the jump in applications didn’t bring in a rush of lower-quality candidates. In fact, it was just the opposite — the company reports that because of its efforts, it’s attracting candidates of a higher calibre.

Speak to your audience (like a human). Once you know what to communicate, make sure you’re sending the right message to the right people. Consider SAP. To target more young tech workers, SAP revamped its career page, increasing visuals, adding 40 videos featuring employee stories, and tailoring content to students, graduates, and professionals. “Life at SAP,” a social media campaign designed to show rather than tell what it’s like to work at the company, engages prospects on Facebook, Twitter, LinkedIn, Instagram, and YouTube. SAP now has a thriving talent community with more than 550,000 members, giving the company a well-stocked pipeline of potential new hires.

Mobilize your biggest fans. When you’re ready to share, don’t forget your best brand ambassadors: your employees. Arm them with great content — images, stories, videos, tweets, GIFs, articles — encourage them to share, and amplify their efforts.

Get executive buy-in. The storytelling must come from the top. The difference between mediocre and great employer branding often is executive involvement. When the C-suite publishes or shares on social, it sets the tone for the entire organization.

At Cisco, part of an effort to energize the employer brand on social media included #IChoseCisco, a campaign encouraging employees to create content around the hashtag. Executives all the way up to CEO Chuck Robbins participated; Robbins posed in a photo with a young employee holding a sign that reads, “#IChoseCisco because…the CEO supports innovative ideas — even from interns!” Cisco’s efforts significantly boosted its social following, are driving traffic to its jobs site, and helped it train its recruiters on the value of social media.

As we look ahead to increased competition for skilled workers, we expect companies that understand, develop, and communicate their employer brand to come out on top. Just ask GoDaddy and its new tech hires. What we now know is that this one move could save millions.

A longer version of this article first appeared at HBR.