Employment Branding: Calculating the Economic Impacts

Employment branding is a powerful recruiting retention and motivation tool. For most successful organizations, great employment branding efforts revolve around these six pillars:

    1. Becoming “talked about” in key industry and functional publications


  1. Getting listed in best-places-to-work lists
  2. Getting listed on best practice benchmarking lists and in research studies
  3. Improving management behaviors across the organization through rapid “what-works sharing” among managers
  4. Developing an industry-leading employee referral program
  5. Having an eye-catching website that attracts passive candidates

But before you can get funding for employment branding efforts, you must convince skeptical managers and CFOs of their ROI and economic value. There are many possible impacts of effective employee branding efforts ó and almost all of them can add economic value to a firm. Before you start the process of making the business case for your branding program, it’s important to first narrow down the list of possible economic impacts to the ones that are likely to be accepted by your CFO. Following is a detailed list of possible economic impacts for you to start with. 1. The value of improved recruiting Better recruiting and hiring (as a result of your branding efforts) will have positive economic benefits, including:

  • Filling vacancies faster means there is no drop in service levels.
  • Hiring better performing workers improves productivity.
  • Hiring workers with different or better skills improves the likelihood of innovative ideas and increased corporate capability.
  • Because branding increases employee referral hires, recruiting costs will decrease because referrals are cheaper. Referrals have also been proven to result in higher quality hires.
  • Because branding helps diversity recruiting (and retention), customer satisfaction and customer attraction may improve, since your employee population will better reflect your customer population.

2. The value of improved retention Branding efforts increase employee retention. The economic benefits of improving retention include the following:

  • Retaining top performers in key positions can avoid the drop in service levels that occur when key employees leave unexpectedly.
  • Retaining top performers in key positions means that fewer of your organization’s ideas and well-trained talent will join competitors.
  • In positions where service levels improve when experience increases, there will be greater productivity, capability, and service as a result of having a higher percentage of experienced workers.

3. The value of improved employee satisfaction Employment branding increases employee pride and satisfaction. Since there is an established connection between employee satisfaction and customer satisfaction, branding can increase customer service levels and customer satisfaction ó both of which have an established economic value. 4. The value of improved management practices as a result of benchmarking An essential component of employment branding is the increased emphasis on benchmarking and the subsequent sharing of management best practices. Being well known as a well-managed organization makes gathering best practice information much easier. Some of the potential economic impacts of increased benchmarking include the following:

  • Faster learning about best practices from better firms inside and outside the industry will result in improved productivity.
  • There is increased pressure to stay ahead and continually improve as a result of being recognized as a well-managed place to work. That pressure can increase “what-works sharing” between managers and units. Faster sharing increases innovation and productivity.
  • Better management practices may reduce employee relations issues and the time it takes to resolve them.

5. The value of increased media exposure Media exposure has an economic value just by itself. PR and marketing professionals have for years been able to quantify the economic value of media exposure. It is similar to free advertising in that it exposes your firm’s name in a positive light to numerous potential high-income customers. Employment branding increases your exposure in the following ways:

  • Being written up in classy magazines that are likely read by highly paid potential customers means increased exposure to those candidates.
  • Being put on best-place-to-work lists results in cascading exposure after being ranked.
  • Being listed on seminar brochures that are distributed to highly paid professionals as a best practice leader increases your exposure to highly desirable customers and candidates.
  • Receiving awards is likely to result in cascading media exposure.
  • Case studies about the firm are likely to receive media attention. Since these are frequently used in university instruction, they may also positively impact recruiting and your firm’s image among college students.

6. The value of word of mouth exposure Employment branding efforts increase the amount of time that employees spend off the job talking positively about the firm, its products, and its management practices. This peer-to-peer exposure tends to be more credible than traditional advertising. There is a great deal of economic value in the increased and highly credible exposure of your organization’s name and practices to potential customers and candidates. 7. The value of the positive impact of employment branding on the product brand Employment branding builds the public’s awareness and positive image of your firm. If your branding efforts are successful, they can build on and enhance your firm’s existing product brand (which already is recognized as having an established economic value). 8. The possible impact on stock valuation Stock analysts look at the quality of key middle managers in a corporation when they make assessments. If branding efforts positively impact workforce productivity and the attraction and retention of key management talent, they may result in a higher stock valuation over time. Potential Negative Economic Impacts of Branding In addition to the positive economic impacts of branding, there can be some unintended consequences and costs beyond just the branding program’s costs. These generally include:

  • The costs of increased retention efforts as a result of recruiters targeting your firm because of its “best-in-class” image
  • The cost of handling the increased flow of applications that a top employment brand encourages
  • The cost of the increase in the volume of benchmarking requests that your firm will get (both desirable and non-desirable) as a result of your firm’s image and participation in other benchmarking groups.
  • The cost of dropping off of best-place-to-work lists, which can have negative impacts on your organization’s image both internally and externally

Getting Finance’s Help in Pre-Selecting Impacts to Assess Rather than trying to build you business case around every possible economic impact (especially since building a business case for each item takes some time), it’s best to first spend some time with someone in your finance department to see which of these factors have any “believability” (what makes sense to some CFOs isn’t always credible to others). Then proceed to make estimates of the possible impacts of the remaining factors.

About Dr John Sullivan

Dr John Sullivan is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high business impact; strategic Talent Management solutions to large corporations.

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