Measuring the Employer Brand ROI

A strong employer brand lends an organisation a significant competitive edge in recruiting, retaining and making the most of employees; it is a differentiator, aimed at building engagement and loyalty through identity.

This addresses two audiences – potential employees and existing employees – those organisations developing their employer brand will expect to see enhanced employee engagement. A strategic approach to managing the employer brand will employ relevant metrics to monitor progress; there are a number of ways to measure employment branding efforts.

A traditional method of determining ROI is to divide the benefits by costs. Costs are fairly easy to establish:

• Time spent by staff working on employer branding efforts.
• Costs of developing communication materials and channels.
• Recruitment related costs, advertising, travel expenses, etc.

Benefits will vary for each organisation, the obvious one is that HR should fill vacancies more quickly with a concomitant improvement in staff retention; checking retention and turnover rates is something most HR departments do periodically, so it should be possible to assess effects here relatively easily. Other benefits may be:

• Reduced hiring costs
• Enhanced talent pipeline which also aids succession planning
• Improved employee engagement
• Better brand reputation

Data for development

Metrics to measure the value of an organisation’s branding investment depend on sector and recruiting objectives. Once metrics are established that reflect the organisational profile the data derived from the study can be harnessed for continued development of the employer brand.

Research conducted by CEB in 2010 concluded “49 percent of applicants leave with a negative impression after an unsuccessful application.” It gets worse, one in five of those applicants stop using or buying from the organisation as a result. How you treat applicants and how they perceive your employment brand can affect your consumer brand and reputation in the marketplace.

Reputation as an employer is where you most want to see ROI so check online sources such as Glassdoor, be prepared to deal with both positive and negative comments. Then consider backing up this data with employee engagement and candidate experience surveys.

A note of caution here, with regards to employer brand management the CIPD point out a potential pitfall “over-branding: the creation of unrealistic expectations of organisational life. This is a well-established problem in graduate recruitment and employment.”

Feedback and validation

Don’t forget the potential of exit interviews as a means to gain insight into employer brand and staff perceptions. Use the information gained as a baseline for employer branding improvement efforts, alongside results for areas such as number of employee referrals.

This is an important measure of success – the number of employee referrals you receive. If employees talk up the benefits of working for an organisation then others will want to join. Employee referral programs are a key source of quality hires, your employees are going to be recommending people who have the qualities needed to be successful in the organisation, those who are likely to be a good fit with the organisational culture and values.

Business growth, competition for talent, the improving economy all point up the increasing importance of employer brand management. When the organisation is included on one of the ‘great places to work’ lists that external validation is invaluable but until then monitor the employee brand and alignment with the organisation’s broader business objectives and analyse the indicators that are meaningful for the brand.

Success lies in applying the same commitment and discipline to managing the employer brand reputation and experience as is devoted to customer and consumer brands.