We have written a new White Paper on Celebrity Endorsements - Pros, Pitfalls, & Principles. Click to read.

Employer Branding – Building the brand behind the brands – Part I

Share this post

This is part 1 of a two part series. To read the second part, click here.

What is employer branding?

Think back to the last time you were considering a job change.

What made you choose one company over the other?
What made you proactively apply for certain companies even when you were happy with your current job?

Besides obvious factors like higher compensation, better perks and a more challenging/interesting role, you would have made your decision based on the company’s reputation, its culture, and whether it would be a ‘nice’ place to work at.

That is employer branding, and in today’s world, companies need to spend money, time and effort to nurture it carefully, almost with as much care as they would devote to nurture and build their consumer-facing brands.

Just as a consumer brand is the sum total of the experiences consumers have with it, an employer brand is the sum total of the experiences its employees- including past, present and future- have with it.

Why is employer branding important?

Despite a relatively challenging economic environment, talented employees have a multitude of job options open to them. This creates a tough fight for employers who want to avail their services. We have all been witness to recent scenarios where companies have gone as far as offering expensive bikes to woo talent.

In such situations, an employer brand with high awareness and equity comes in handy. It offers several advantages:

1. A magnet to attract both active and passive talent: there is a large gap between real and perceived talent availability, with truly talented employees who can walk the talk being few and far between.

To complicate matters, ‘active talent’ (talent that’s actively scouting for a job) forms just the tip of the iceberg. A large, and potentially more relevant talent is ‘passive’- comprising of candidates who aren’t proactively look out for an opportunity.

As per various research estimates, while passive talent comprises about 75% of total talent pool, even in the active pool, the good resources get hired and go out of the job market in less than a fortnight.

Under such circumstances, companies can systematically attract great talent (both active and passive) by investing in and nurturing a great employer brand.

2. Enhances recruitment efficiency: recruitment entails both internal costs (i.e. spends on training, on-boarding and joining incentives) as well as external costs (i.e., spends on various external recruitment agencies and recruitment drives). Put together, these add up to a significant investment on each hire.

Strong employer branding ensures that firms have access to a better-quality talent pool, thereby reducing the chance of hit and miss recruitment. It can also potentially reduce the external component of cost per hire.

That’s because it triggers an organic advocacy for the firm, ensuring that any call for recruitment spreads faster and wider. Further, it can make employee referrals more effective, ensuring that this low-cost channel takes a higher share in the overall recruitment pie.

Finally, a good employer brand also opens the door for ‘talent pull’- where talent that admires the company would organically apply on its website and some of them might even go out of their way to attract its attention on social media accounts (like Twitter and Linkedin).

3. Increases employee retention: good talent is not only motivated by money, but also by higher order needs such as job satisfaction, an internal and external recognition and a sense of creating an impact.

A well cultivated employer brand provides all these and more, thus elevating its employees from committed workforce to proactive brand evangelists, setting up a virtuous cycle of retention and referrals.

In fact, a recent LinkedIn survey on impact of employer branding for small and medium businesses showed that effective employer branding can lead to up to a 28% reduction in employee turnover, a 50% increase in qualified applicants and a 50% reduction in cost-per-hire.

Clearly, when done well, employer branding can fundamentally impact talent pipeline at all stages- from sourcing and searching the right talent to recruiting and retaining them.

4. Offers a competitive advantage: today for any brand building approach, a sustainable moat is tough to achieve. Consumer loyalty is low, innovations are copied fast and operational excellence is becoming table-stakes.

In such a scenario it is imperative that a brand be on a treadmill of innovation and execution to deliver superb experience at all touchpoints consistently. A high-quality talent pipeline is key to achieve this.

Further, good talent is a zero-sum game. By gaining preferential access to good talent, a firm will force its competition to settle for the next lower rung, thereby gaining an edge.

Interestingly, strong employer branding also offers flexibility to the firm to experiment with hiring models (e.g. internships, on contractual payrolls, as consultants etc.) that best suit its business needs, without impacting the quality of accessible talent.

5. Boosts the consumer-facing brand: consumers today judge a brand by its actions at every touchpoint- and these go beyond product and communication to cover the brand backend including its culture.

Brands that are recognized as a great place to work, are known to attract the best of talent and treat their employees with empathy and fairness get a favourable edge among consumers too.

On the contrary, brands with a poor employee feedback and those with a poor reputation in the talent market can also cast their consumer-brand in a poor light.

In fact, many brands are viewing this as an opportunity. They leverage their employer brand to garner positive consumer equity by giving consumers an inside peek into their culture and showcasing happy and satisfied employees vouching for their product or service.

Wakefit’s afternoon naptime campaign – not only is it a great way to give a sneak peek into the culture of the company, but it is also in sync with the category.

Building an employer brand today requires teams to consider the changing landscape

From the above narrative it’s clear that employer branding cannot be a cosmetic exercise that is just about a logo and tagline. It is a strategic pursuit that can impact an organization’s topline as well as its bottom-line.

However, as firms go about building their employer brand, they need to keep a few things in mind.

Companies today are dealing with a millennial and gen-Z workforce that comes with a slightly different outlook towards work. They see employee contracts as a 2-way street and strongly focus on the value-add the job will bring to their career beyond just monetary benefits. They seek continuous learning, a consistent growth trajectory, flexibility and a sense of impact. They thoroughly research all these aspects before committing.

And this research will be comprehensive and multi-dimensional- ranging from Glassdoor ratings and Quora reviews to connecting with current and past employees for reference checks.

In a nutshell, savvy talent today seeks a high RoE (Return on Employment).

What factors underpin Return on Employment (RoE)?

As per our framework, Return on Employment is a function of 5Cs:

WinnerBrands 5C model of Return on Employment

  • Career Potential – Will working at the company open new and hitherto inaccessible doors to help further the employee’s career? Will it help them access new technology that increases their ‘value’ in the job market? The era of joining one company and retiring from there is over. Now employees evaluate companies like VCs evaluate a startup to invest in – judging risk, upside potential (including upskilling, perks, pay, work-life balance), and exit options.
  • Community Reputation – Does this company carry a high and positive awareness in their society / peer-group? Will it give them instant recognition? That’s the reason why even today companies like Unilever, McKinsey and Tata are viewed as coveted employers and enjoy a preferential status in placement drives across college campuses.
  • Credible Impact – Will working at the company help the employee create a meaningful and positive impact on the society at large? Companies that work to have a disproportionate impact on the future, those that seek to challenge the status-quo or those that espouse a clear sense of purpose naturally attract employees even if there are tradeoffs. This is an interesting factor that we have seen becoming increasingly popular in recent times. New-age tech-based startups are using general narratives around creating a positive impact or disrupting the status-quo as a tool to attract talent.
  • Culture-Value Match – Will workplace have a likeminded community with whom one can collaborate, debate, learn and also have fun? Employees today seek a culture where they can seamlessly blend-in and one that they can proudly evangelize. The quality of peer group and the organization’s values therefore becomes an important consideration. Beyond perks like a fancy office, foosball tables and free food, employees also look into more subtle aspects like diversity, equality, inclusivity and work-life balance at their workplace. In addition, even the organization’s outlook towards environmental awareness and social responsibility counts when it comes to building its perception amongst potential talent.
  • Competitive compensation – In many ways, this is a table stakes requirement. While it is not necessary for company to offer the ‘highest’ salary or ‘largest’ bonuses, the bouquet of compensation needs to be competitive to ensure the firm comes into consideration. Startups today are effectively competing vs. established firms on this aspect by offering ESOPs or by allowing their talent more flexibility by easing norms around remote working / work from home.

Companies that focus on delivering a great ROE by focusing on the above 5Cs stand a chance to build a great employer brand.

This brings us to the end of the first part of this two part series. In the next part, we will take a look at the building blocks of employer branding, its nuances, and a simple framework to build a great employer brand for your company.

Share this post

Leave a Reply

Your email address will not be published. Required fields are marked *

More from us

FreeFlowing is a weekly newsletter that makes you better brand builders.
Sign up to get the latest edition every week.

Hello there!
Thanks for dropping by.

FreeFlowing is a weekly newsletter that makes you better brand builders.

Sign up and you’ll get

– In-depth case studies of Indian brands
– Breakdown of marketing concepts
– Deep analysis of marketing trends

We never spam