What is employer branding and why do you need it?

What do Airbnb, Hilton, Google, Facebook, and HubSpot have in common? Apart from being highly successful, these are some of the best companies to work for, according to several surveys. These are also some of the companies that have invested heavily in employer branding.

Employer branding is the key to differentiating your company and attracting top talent. This type of branding is different from corporate branding and promotes your company’s values and objectives to job seekers and internal employees. In short, it answers the questions of why people should choose to work for your company and why your existing employees should continue to work for you.

Why do you need employer branding?

In the hyper-competitive business world, attracting and retaining top talent is a priority for companies. While everyone wants to win the talent war, skill shortages are escalating. A 2019 Gartner study shows talent shortage is the top risk for companies globally. On the other hand, a TalentNow study reveals that the reputation of the company is the key factor for 84% of job seekers.

A LinkedIn study shows 72 percent of global recruiters believe employer branding impacts hiring in a significant way.

Benefits of employer branding

Apart from the fact that employer branding makes it easier for you to recruit top talent, it also positively impacts your business’s bottom line in many ways. A LinkedIn study shows that 59% of recruiters are investing in employer branding while 55 percent have a proactive branding strategy.

According to this study, employer branding can reduce cost-per-hire by as much as 50% while speeding up time-to-hire by one to two times. It also helps in getting 50% more qualified applicants while reducing turnover by 28%.

Evolution of employer branding

The term ‘employer branding’ has become more and more popular with employers. The term was first introduced by People in Business chairman, Simon Barrow, and Senior Fellow of London Business School, Tim Ambler, in 1996 in their academic paper. They defined it as “the package of functional, economic, and psychological benefits provided by employment, and identified with the employing company.”

In 1998, Adidas Group’s chief HR officer, Matthias Malessa, set up an HR marketing department to focus on the company’s external presentation. In 2003, the Economist conducted a global employer brand survey and found that 41% of non-HR and 61% of HR professionals were aware of the concept. Several studies have been conducted over the years that show the benefits of employer branding.

Employer branding is an umbrella term for internal marketing, brand management, and employer brand positioning. It’s an inside-out, implicitly explicit, value-based approach to shaping the perceptions and behaviors of employees, as well as external talent.

The different elements of employer branding

Building a positive employer brand involves much more than just offering an attractive salary. It is a combination of the company’s reputation and the values on offer, including culture, career advancement opportunities, flexibility, social responsibility, and much more.

Four elements of branding: Aaker (1996) suggests that there are four elements of brand identity to be considered to develop employer branding. These include:

• Brand as a product - relates to salary, benefits, working hours, and assignments.
• Brand as an organization - core values, mission, vision, and corporate social responsibility.
• Brand as a person - brand personality and its relationship with customers.
• Brand as a symbol - visual imagery, heritage, metaphors related to your brand, for instance, the brand logo, colors, and images.

The two key elements that you need to consider to shape your brand identity are:

Company culture. You can develop your company culture consciously, or it can exist by default. Rather than just being policy-driven, culture relates to the consistent actions you take in communicating your firm’s core values, mission, and objectives.

Workplace culture drives the behaviors and attitudes of your workforce effectively or otherwise. Encouraging positivity, fostering workplace social connections, promoting wellness, imbibing transparency, and providing meaning and purpose are some ways to build a strong company culture.

Reputation. This refers to how your company is perceived by your employees and other stakeholders. One of the key attributes of successful employer branding is when your employees volunteer to tell positive stories about your company’s business practices, management, and culture.

Reputation, as per a study, impacts 49% of the employees’ decision to continue in the company. It is also important to align your employer branding with your potential candidates’ expectations. The study shows that in aligned organizations, employees are more likely to promote their company’s services or products.

Employer branding is a powerful tool that can add value to your company by improving the quality of employees, helping retain top talent, and inspiring engagement and productivity.