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2019-06-29 13:16:34HR and Management: Human ResourcesEnglishHiring top talent is challenging and crucial for growth of a small business Hence, employer branding is indispensable to attract qualified... is Employer Branding and Why is it Important?

What is Employer Branding and Why is it Important?

9 min read

72% of the recruiting leaders across the globe agreed that employer brand has a great impact on recruiting and hiring. The term “branding” today is just not restricted to defining consumer goods or services. It is rather used to describe anything that has a unique identity and a reputation attached to it.

Branding is nothing but the identity of a product or service that distinguishes it from its competitors. Further,  it entails a promise to deliver performance in terms of functionality. In other words, brand of a product or a service conveys an implicit guarantee. This guarantee proclaims that whatever is promised would be delivered to the customers. For instance, shoe labels would simply not be able to sustain in the market if shoes they manufacture split apart.

Likewise, even employees do not prefer to work for employers who fail to live up to fundamental functional benefits and performance guarantees. These include good working environment, attractive pay packages etc.

Also, 75% of people seeking jobs consider an employer’s brand before even applying for a job. Thus, we can conclude that the effect of employer branding is quite significant on job seekers. This is  in terms of their engagement with your business.

Thus, hiring top talent is challenging for SMBs. But it is also crucial for the growth of small business. Hence, employer branding is indispensable for small business owners. This helps them to attract qualified candidates to join their team over competitors.

What is Employer Branding?

An employer brand is defined as “a package of functional, economic and psychological benefits provided by employment. Furthermore, these benefits are identified with the employing company.

In other words, employer brand is what people perceive of your company as an employer. It sets out or presents the value you create for employees in return of their skill set, social network and experience. Thus, employer brand is a way that a company sells itself to the people seeking jobs.

Furthermore, employer branding involves advocating values a company creates as an employer. These values are advocated both within and outside the firm. This means employer brand refers to the characteristics that make an employer different and an “employer of choice” for those seeking employment.

The concept of employer branding originated from the marketing concept of branding and its components. Branding is based on concepts like (i) value proposition, (ii) brand personality, (iii) brand positioning and (iv) brand management and development. Similarly, employer branding also finds its foundation in such concepts.

So, let’s  first understand how employer branding can help organizations in achieving their business objectives.

Benefits of Employer Branding

1. Reducing Costs

Strong employer branding helps companies in reducing costs.  Thus, the major area where costs can be reduced is the recruitment. As per a report, the costs for replacing middle level managers came close to one and a half times their annual salary. Whereas, it was around two and half times for senior level managers.

Thus, companies having strong employer brands have increased employee retention. Further, these companies also enjoy the benefit of lower employee turnover costs over competitors.

The second major cost burden to the companies arose from leave on account of sickness. These costs not only included the direct costs like sick pay, but also involved indirect costs such as loss of production, decreased efficiency and opportunity loss.

Therefore, these costs get significantly reduced if companies have strong employer brands. This is because these brands have highly engaged employees and possess above average employee attitude.

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2. Customer Satisfaction

The quality of service rendered by a brand depends upon the overall experience it creates for its customers. Thus, employees attached to the brand have a major role to play in creating such an experience.

As per a study, it was found that there exists a strong link between employee engagement and customer satisfaction. It was observed that an increase in employee engagement lead to increase in customer satisfaction. This further lead to increase in sales for the company.

Thus, it is essential that the employees working for a company are themselves engaged and satisfied. This is because engaged and satisfied employees deliver the requisite satisfaction to the brand’s customers. Thus, companies are more likely to achieve above-average customer satisfaction if they have highly committed and engaged employees.

3. Positive Financial Results

The reasons why companies focus on building strong employer brands are not only restricted to lowering costs and increasing customer satisfaction. It also extends to improving the financial performance of a company.

There exists a link between strong employee engagement and increased financial performance of a business. Studies have shown that increase in employee engagement translated into additional revenue and increased profit margins for the companies.

Stronger employer brands having highly engaged employees help in:

  • Reducing costs related to recruitment, retention and absenteeism
  • Increasing customer satisfaction
  • Increasing revenue and profit margins

Employer Branding Process

Employer branding is a multi-step process. It begins with understanding the customer and other insights required to successfully manage a brand. These insights lay a foundation for the employer value proposition. This proposition gives all reasons to employees to work with a brand. Hence, following steps involved in the employer branding process.

1. Get Company Insights

The first step in developing an employer brand strategy is to understand the key aspects about your company. These include:

  • organizational culture,
  • purpose,
  • values,
  • organizations’ unique characteristics,
  • factors influencing employee engagement,
  • employee segmentation etc.

2. Undertaking Employer Brand Audit

The next step is to understand how outside people or current employees perceive your company. Thus,you need to undertake research and find the current state of your employer brand in order to get insights like these. You can use certain techniques to undertake such a research. These include:

Employee Insights

Conventional employee surveys just emphasized on studying generic factors pertaining to employees. These include quality of management, teamwork, training and development etc. These surveys did not consider a wider approach to understand the employees. In fact, these surveys just focused on measuring the employees in different aspects.

Therefore, these conventional surveys are not enough if one needs insights to develop an effective employer brand. Companies need to delve deep to know more about employees.

Employee Engagement and Commitment

A company should concentrate on defining and measuring employee commitment and engagement over employee satisfaction via an employee survey. This helps in determining employees relationship with the employer and lays the foundation the employer brand strategy.


You need to compare the employee engagement levels with the peers in the industry once you measure them within your organization. One way of comparing employee engagement levels is to approach employee research agencies. The other is to take part in best employer surveys.

Correlation Analysis

Correlation Analysis is another tool that helps in understanding various factors about an employee who works with an organization. These factors refer to aspects like (i) what attracts people to join an organisation, (ii) things that motivate employees to give their best, and (iii) reasons why they leave.

Continuous Research

It is important to undertake research on a continuous basis since change is something that remains constant. This research helps in understanding employees in a better way. Furthermore, it helps management to quickly identify problems associated with employee engagement and hence respond immediately.

Culture Mapping

You also need to understand the culture of the organization if you need to strengthen your employer brand. Understanding organization’s culture is challenging as it describes general patterns rather than explaining objective aspects. Thus, such general patterns can be very useful in knowing what people think about how your organization works.

Brand Roots

You need to know what makes your company unique if you need to make an effective employer branding strategy. And that is possible by studying the history of your brand. This analysis gives insights about the character and personality of the brand.

Projective and Enabling Techniques

Another way to determine unique characteristics about your brand is to undertake employee focus groups. These studies focus on more general issues over urgent issues like business strategy. Furthermore, these studies make use of projective techniques like role playing to identify feelings that people find difficult to express in direct questioning.

3. Formulate Employer Value Proposition

Employee Value Proposition (EVP) is the total value that an employer offers to the employee. This is in return of an employees’ experience, work, skill-set and social network. It includes everything that the employee gets from the employer. This value is in exchange of an employee’s time and effort put in at the workplace.

It is not just restricted to the tangible benefits that the employees receive such as compensation benefits. But it also includes intangible benefits such as safe working environment, flexible working hours etc. Thus, these are the values for which your current employees choose you, like the most about you and stay with you.

Thus, you must write down the factors while formulating the EVP. Theses factors are the things considered by current and potential employees in considering as the employer of choice over others. These factors could include compensation, benefits, culture, working environment and career opportunities.

4. Use Marketing

Enlist the talents of creative wordsmiths in your own marketing or communications department when designing an EVP. You can even outsource this and other brand work to an agency.

Thus, you’ll be in the best position to craft an employer brand by borrowing a few marketing techniques. One of these techniques include starting every branding endeavor with the following questions:

  • Who are we trying to reach?
  • What do they want?”

Thus, the employer brand so created is able to speak to your exact target audience.

5. Increase Employee Engagement

Look no further than your own workforce in order to help you become a trusted employer. For finding out what it’s like to work for your company, employees are 3x more likely to be trusted by leads than your CEO. Your employees also shape your company’s culture, live your values, achieve your objectives, and manifest your company’s mission. Without their participation, your employer brand would be nothing.

So, it’s quite beneficial to undertake employer branding for a business. Therefore, to help you understand how it is undertaken in a much easier way, here is an infographic on what is what is employer branding and why is it important?

What is Employer Branding and Why is it Important?
Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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