Building an effective employer brand is becoming a priority for many of organisations. The added value of favourable employee perceptions of the organisation can be characterised as ‘employer brand equity’.
Take a look at your core employer brand assets in order to evaluate your employer brand equity. EBE is defined as a “set of employment brand assets and liabilities linked to an employment brand, its name and symbol that add to (or subtract from) the value provided by an organization to that organizations employees”, (Ewing, et al 2002).
As a set of attributes we might characterise employer brand equity as comprising:
- symbolic attributes – employer brand awareness, employer brand image, employer brand experience, corporate reputation;
- working culture and environment;
- the perspective of current and prospective employees;
- marketing activities that affect the value provided by working for the organisation.
So employer brand equity can be seen in terms of the attributes that encourage (or discourage) current employees to stay and support the organisation and that motivate (or discourage) potential applicants to apply for roles.
The concept of employer brand equity is straightforward, in order to build a strong EBE, organisations need to address the perceptions of current and prospective employees and promote the positive attitudes about affiliation with the organisation. When organisations demonstrate strong brand equity, their employees are committed, advocate on behalf of the organisation, and tend to be more loyal; so the organisations will be less likely to lose employees to rivals.
Calculating ROI on employer branding can be a complex area, but a focus on the following element will help:
- Clarity around inputs and outputs
- Track changes in sales and performance and changes in employee and customer experience
- Identify the relationship between changed performance and experience.
So applying concepts from marketing to people management the ROI equation depends on objectives related to outcomes.
The optimum mix will depend on sector, service lines and organisational structure. Research suggests that the concept has most application in high value-added, service businesses: the higher the salaries and the fewer the number of employees, the more each employee relationship with the employer matters.
Making a difference
How much does organisational reputation actually matter? The Journal of Applied Social Psychology reports that “job seekers’ reputation perceptions affected job pursuit because
- individuals use reputation as a signal about job attributes, and
- reputation affects the pride that individuals expect from organisational membership
Moreover, individuals were willing to pay a premium in the form of lower wages to join firms with positive reputations.”
The metrics that work in any given situation will vary and the results of brand initiatives will not be immediate but we would encourage you to build a better understanding of the impact of brand on applicant decision-making. Where to work is a high-stakes decision with important consequences.
Recent studies have focussed on the characteristics of employer brands that appeal to prospective applicants – people want to be associated with organisations that have good reputations because it enhances their perceived social status and self-esteem. HR may be able to influence employer brand equity and the perception of the employer in the jobs marketplace but it’s also true that what job seekers think of the organisation may be influenced by external factors beyond the control of the organisation.
From corporate point of view attracting high-performing applicants of the right type and in the right numbers is crucial to organisational success. It pays to pay attention to building the organisational attractiveness that draws applicants’ attention to focus on employer brand and encourages existing employees to stay and work hard for the enterprise.
However you choose to define EBE we believe that an integrated approach to human resource management and employer branding should aim to promote a clear view of what differentiates the enterprise and makes them attractive as an employer.
We developed The Employer Brand Index to help HR professionals measure the employer brand equity of their organisations.