Employer Branding Delivers ROI—If You Get the Strategy Right

Steve Odland: Welcome to C-Suite Perspectives, a signature series by The Conference Board. I'm Steve Odland from The Conference Board and the host of this podcast series, and in today's conversation we're going to discuss employer branding—how it relates to talent recruitment and talent retention. 

Joining me today is Erka Amursi, the principal researcher in our Human Capital Center at The Conference Board. Erka, welcome.  

Erka Amursi: Thank you. Happy to be here.  

Steve Odland:So this term "employer brand" is relatively new. And people have started using it in the past decade or so to talk about thinking of their company as a brand and marketing it to current employees and prospective employees. Talk about what the employer brand means, cause it goes beyond the name of the company, doesn't it?  

Erka Amursi: Yes. Well, we know about the brand and it has a long history from when farmers marked and burned their animals so that everybody would know who this animal belonged to. And then the Industrial Revolution, when the perception of the term "brand" changed because there was more competition, and now there were more options for people to purchase products from a different company or the other.  

But employer brand has, as a term, has been relatively new. It started to be used in the '90s and more at the beginning of the century, when Glassdoor and Indeed and all the technology made it possible for employees to share how they were experiencing their employers, how they felt in specific organizations. So all that information that was available to new candidates or the public made the importance of employer branding more interesting, more emphasized. 

Steve Odland:Yeah. And more important because when you have social media and you have ubiquity of information and commentary and so forth, well, then you have to think of it as something that needs to be managed carefully, yeah?  

Erka Amursi: Yes, sure. You can not manage, it's your option, but you better manage it.  

Today, I was reviewing my LinkedIn feed, and I was seeing people sharing, for example, recordings of meetings with employers, with their managers and how they were not happy about the communication of how the meeting was done. So those internal communications that before, remained with the organization, or some employee would tell some other friends, et cetera, now they can become public. So, being able to manage your employer brand becomes more and more important.  

Steve Odland:Yeah. And you mentioned the origin of the term coming from farmers branding animals, and that led to branding products and services. And people spend lots of money, millions of dollars and Euro and every other currency, supporting their brands and building an image of those brands. And so, this is thought of as something that needs to be that deliberate and that important, where employers need to position their company for prospective workers. It's a whole different mindset change, isn't it?  

Erka Amursi: Yes. And especially when we know that attracting and retaining talent and employees is very important for organizations. We did our C-suite Outlook. We have those data. We know that attracting talent is really a priority.  

Steve Odland:You'vewritten a paper on the importance of employer branding, and where can people find that paper?  

Erka Amursi:It'sin our website for our members. They can download "The ROI of Employer Branding." We have two reports connected to one research that we did in the previous months, where we conducted a survey with HC leaders and marketing and communications leaders on employer branding. And we also conducted interviews with leaders, and all those findings we have summarized and published in those reports.  

Steve Odland:Yeah. And that's at tcb.org. Congratulations on the report. Now, tell us what determines the perception of a company's employer brand? What are the various components?  

Erka Amursi:I think it depends on the candidate, on the person, on the employee. Firstly, what they want to achieve from an employer.So it may vary, but as we know, human needs are those that overlap between people and we know that everybody of us wants to work for an organization that provides financial incentives so that it can cover the expenses in our lives. So everything related to salaries, benefits, et cetera, is important.  

It is important to feel secure in your working environment. It is important to work for an organization that has a good culture where you feel respected and where you feel that your abilities are used and you are getting credit for those. 

So there are many components that make an employer good or bad for people. And in addition to all these things that employers have to offer, it's also the way that this packet is communicated to the employees, how the employer branding professionals are capturing everything that an employer has to offer to the employee or prospective candidate, and be able to communicate it in a way that is attractive, and be able to communicate insights that these people go and can see those communications. Soit's the core, what you offer as an employer, but also the part of how well you are communicating that.  

Steve Odland:Yeah, but you can'tcommunicate it if it's not real, right? I mean, you can't just execute something or have an environment that's one way, and then say it's all sunshine and roses if it's not. So, it starts with creating a great culture, and that is dependent on values. Talk about how employees value the values and the soft side of companies. 

Erka Amursi: Usually, employer brand professionals are engaged in defining the employee value proposition, where they ask their employees about the main values that they are valuing in their organization. So, that's the main important part of the employer branding, capturing that information. And what employees value, it may be a lot of things, as I said, it can start with salaries and benefits, but it's also about culture. It's about communication internally with everybody. it's about how interesting the job is. And it may be about the meaningfulness of the job, the main values, the mission that you are trying to achieve by working for that organization. 

It depends also on how happy people are with the work design. Do they have flexibility? Do they have autonomy? Do they have opportunities to feel creative in what they do? Are they appreciated for what they do? All these aspects of the culture are also very important.  

Steve Odland:Soit's as much how they feel about their job and their supervisor and how they're valued as anything else, right?  

Erka Amursi: Mm-hmm.  

Steve Odland:Yeah. So, when you think about an employer brand, you can start thinking about salary, benefits, the hard numbers side of it, but it really is becoming more about the softer side. And it's a feeling of belonging. It's whether employers and their supervisors value their work and whether they have the flexibility to balance work and life. And these were things that decades ago were not important or were not perceived to be as important as they are today. 

Erka Amursi: Yes.  

Steve Odland:So when you think about an employer brand, whose accountability is it to govern and manage that?  

Erka Amursi: When we conducted our study, our focus was not as much on identifying roles accountable, who's accountable, who's responsible. We were much more focused on the measurement aspect of the employer branding. But when we focused on identifying how the work was done, what were the main barriers, et cetera, we realized that actually it can vary in different organization.  

You can have it under talent acquisition or in another organization. You can have it under marketing and communications, or there are other organizations that are trying to create an independent employer branding team, which reports to one or the other, TA or marketing and communication. So the leaders of these functions, HR leaders, talent acquisition leaders, would be the accountable in this case, these teams are reporting to them. And usually the teams, the employer branding teams, are small. And we have realized that almost everywhere where we ask, there is an issue of not enough resources in those teams of employer branding.  

Steve Odland: And then who has the responsibility for implementing all this? Is it mainly the human resources organization? 

Erka Amursi: Usually, this team that I'm identifying as employer branding team, which is usually small, as I said, they are responsible for defining the employer branding and then leveraging it and communicating it in different sites and sources. Sometimes they communicate and collaborate with vendors to do this. 

And so sometimes, there are external people involved in this process, but usually the small employer branding teams. And of course, they will need to collaborate with other stakeholders in the organization.  

Steve Odland: And that's the management of the brand. But you know, when you think about it, you start with the brand, and you start with the environment, and what is the reality of it. And that really emanates from the board of directors and the C-Suite creating this environment and holding leaders throughout the organization accountable for living those values every single day, such that that environment is one that is brandable and is marketable. If it's a terrible environment, you can do a great job of marketing it, but ultimately, it's not going to work because people won't want to stay and they won't want to come. 

So, then it becomes just vapor, if you will. So it really starts with walking the talk and creating that environment which emanates through the organization.  

Erka Amursi: Yes, I agree. And this was one of the main challenges for these employer branding teams because they're saying that, "OK, is the ROI of employer branding measuring our work on the branding creation process? Or is it showing and reflecting what the organization as a whole is offering to the employees?"And so yeah, there is that debate there on who's really accountable.And of course, the organization is, the leaders of the organizations are, because they create the environment, they create the culture, they create all the talent management systems. 

Steve Odland:Yeah, now is this more of a generational thing? As you think about an organization that might have three or maybe even four generations in the organization, is the employer brand, part of it, more important to certain generations versus others?  

Erka Amursi:I think the younger generations are, because of access and because of what they want from the employer, are looking at different aspects of the employer branding. For example, ESG. For example, having a meaningful job. For example flexibility, et cetera. So it depends on the generation, but I personally believe that each generation wants to work for organization that treats them with respect and provide security, et cetera. Then, the nuances may differ from one generation to the other.  

Steve Odland:We're talking about the importance of employer branding. We're going to take a short break and be right back.  

Welcome back to C-Suite Perspectives. I'm your host, Steve Odland, from The Conference Board. And I'm joined today by Erka Amursi, the principal researcher in our Human Capital Center at The Conference Board. So, Erka, before the break, you were talking about the ROI of employer branding. What is the ROI, and how do you calculate that?  

Erka Amursi: Well, that was the challenge of all of our report and study. So, ROI is a financial term for return on investment. So you want to calculate any initiative, any intervention, anything that you are adding toward the organization, you calculate the costs that you are investing on it, and then you want to see the revenue. And then you want to have more revenue than costs, right? So the return on investment is how much revenue you are getting compared to the costs that you are putting in a certain activity. 

Steve Odland: And often, people think of this as just soft, you can't measure it, but in fact you can. You can look at variables like turnover. You can look at the longevity of people, the tenure of people. You can measure through engagement surveys, the happiness of people, the willingness to recommend their employer to others, and family members and friends to work there, as well. So there are some real things here.  

And there is a cost to turnover and a cost to losing your best people. So, it may not be as finite as some accounting principles, but there is a general way to measure all of this and measure the return on investing in a great environment and the marketing of it. Talk about all that.  

Erka Amursi: So, yeah, through employer branding, there are some financial benefits, achievements that you want to reach. For example, we know that a good employer branding can help reducing cost per hire, time to hire, et cetera. So, a good employer,an attractive employer branding can have an impact on recruitment costs, reducing those costs, which is something that organizations may want to achieve. Another thing, through retention. If you have a good employer brand, employees want to stay with your organization, and we know that there is a cost of attrition. So the more your employees stay with you, the more that cost of attrition is reduced. 

Another thing is because a good employer brand can impact engagement, people feel respected, valued, like each other, et cetera. All that translates into better engagement. A better engagement we know can lead to better productivity. So you can see an increase in productivity for any investment in employer branding that actually increase engagement. 

Also, the quality of hire is one of the main things that we have heard during this research from our interview. Many organizations, the thing they are most interested in is quality of hire, but also better quality of hire can be translated in revenue because they can be more productive, et cetera. 

Steve Odland: Yeah. So how do you know whether the perception of an employer's brand is good or bad? How do you track all that? 

Erka Amursi: There are many things organizations can do to track that. Now we have Glassdoor, LinkedIn, indeed, all these sites where employer employees share their perspectives and opinions about their employer, so that is very important to track. I tried with ChatGPT just asking, "How is this organization as an employer?" And ChatGPT was able to provide me a summary of the comments that were written in Glassdoor and Indeed and everywhere, and give me some main points about specific organizations I looked for.  

So, tracking these data is important, but in addition, organizations can conduct surveys with their own employees. The engagement surveys can be useful in this regard. Exit interviews, stay interviews are important. Or interviewing candidates about their experience with the recruiting process, as well as checking the application rates, checking if people want to stay in the ladder so that they can be hired at a later date if they are not hired for the specific position. Employees recommending other brands or people they know. So there are a lot of metrics that can be used in this regard. 

Steve Odland: But with social media these days, once somebody's put a bad comment out there, it's almost impossible to get rid of it. And it stays out there forever. So it comes back to what we were talking about before, which is you got to create the right environment. And even when you do, you do get some people who are disenchanted employees or were let go for financial reasons or let go for nefarious things that they may have done. But it doesn't matter at the end of the day,all of that goes into the soup of an employer brand.  

Soit's hard to manage. And you read a lot of stuff on Glassdoor about various organizations. And so how do you know how much of that's actually true?  

Erka Amursi: That's where the importance of employer branding is so that they are able to track those comments that are out there and be able to communicate about the accuracy or not of the message. Or if it was accurate, what the organization did to solve or to mitigate a certain issue.So if you have the response in those comments, that can be helpful, as well.  

Steve Odland: So how do you improve? If you're thinking about, I'm in an HR organization, I'm accountable for this. Or even if I'm not, I want to help, I want to improve my employer's brand, I'm really happy with my employer. How do you do that? What steps do you take?  

Erka Amursi:So I think you cannot improve something if you don't know how well it is working. So the first thing is to actually understand what is working and what is not working. So having those data is very important. Not just the return on investment, but all other metrics that we talked about. So having that, listening to the employees, listening to the candidates, have the data, is the first step to actually understand. And this is the step that makes the employer branding teams very essential and important. Because if their employer branding process is real, they are not modifying it, and the data that is coming back is directly about the employer brand, the employer offerings that the organization has, then those data can be shared with the leaders, with a board. Those data can be shared in order to actually transform the organization, make changes that need to be changed in the organization. 

So the first step: get the data, listen to employees, listen to the candidates, share those data with the stakeholders that are involved or leaders of specific areas of the organizations that are targeted or are involved with what is not going well.  

And then trying to react, have clear steps of reaction. If you need to create a new employee value proposition, you can reengage employees in the process by saying that, "OK, we had this issue, now we are modifying it. So, let's focus again on what it means to work for this organization." And then improving, modifying all the communications campaigns, et cetera, based on the real changes that you make in the organization. 

Steve Odland:Yeah, and it's like trying to change the tire on a car while it's moving, because organizations are in flight and not starting at the very beginning. Some of it will have to be remedial, and so that means that you need to think through the review process, and there are tools, like 360 degree reviews and so forth. And those should be geared towards measuring versus the important values in an organization to drive employer brand. Soit's all linked together, isn't it?  

Erka Amursi: Yes, it is. And as you said, the organization is not stopping for you to do the evaluation and then changing everything. And soit's important to have these periodic evaluations so that you can track and correlate things that have happened with specific messages, sentiment, attitudes that you are tracking. I think that would be helpful.  

Steve Odland:Yeah. But there needs to be coaching, you have to be deliberate about it, and you have to get right down to the supervisor level and make sure that people, they understand how they're being perceived because, if they're being perceived positively, that's great. What do they need to do more of? If they’re being perceived negatively, it's going to show up, on the employer brand or on these reviews. And I know everybody thinks, "Oh, it's all due to the CEO," and that's an important measure. But it's not just the CEO, it's every supervisor in the organization that has an accountability for making sure that she or he are doing the right things every day.  

Erka Amursi: Yes, and even your peers can impact, but it's more difficult to identify accountability. It's the whole climate and culture that impacts. 

Steve Odland: OK, so say your employer brand is in a certain state, and you want to improve it. What kind of change management steps can be used to do that?  

Erka Amursi: I actually think that change management, and we are also doing another research on change management and writing other reports, change management on itself can help with employer branding. The more you use change management in the changes that you implement, the better the outcome in terms of culture and trust and engagement. Because what you are doing is you are communicating broadly, frequently. You are sharing what the main important things regarding change are. You are engaging employees to contribute in the change management process. And all that can lead to a better culture, a more trusted organization.  

So just implementing change management over any change can be helpful. Then using change management specifically in employer branding can only be beneficial. I can say one thing that I am concerned is that usually when you use change management, you need a leader to sponsor that change. And for employer branding teams, identifying that leader that will say, "Hey, we need to, we got this data," or "We don't have good data. We need to improve our way of collecting data about employer branding. But come with a change that needs to be made and sponsor it." You need that leadership support and then engaging everybody else.  

Steve Odland:Yeah. And for our listeners, we have a podcast out there on how do youdo change management? And it's really a very deliberate process that you can implement to take, whatever you're trying to change in the organization from A to B. And this is a great subject to try and use the steps of change management on. So, Erka, just to sum up, any other thoughts on or points that you made in your study here on employer branding that you'd like to share?  

Erka Amursi: The main point, and I'memphasizing it over and over, is the need for metrics and the need for ROI calculations, which will empower this process and make organizations have better employer branding. Because they know where to start. They know with what to compare. If you don't have a baseline of these metrics, you cannot compare with anything, and you don't know what way you are progressing. And identifying and mapping all the stakeholders that are involved in the employer branding, and creating patterns of communication so that everybody knows they are in this process together, what are their roles and responsibilities and how they can help each other in the process is very important.  

And then, outlining metrics that are important to you. As I said, organizations may have different strategies for talent. They may have different pain points or business goals. So targeting the employer brand versus those main goals and needs is an important aspect, as well.  

Steve Odland: Erka Amursi, thanks for being with us today.  

Erka Amursi: Great being here.  

Steve Odland: And thanks to all of you for listening to C-Suite Perspectives. I'm Steve Odland, and this series has been brought to you by The Conference Board.