Zero. You don’t make money on employer branding. And certainly not directly.

However, you can save a lot on it. I mean hundreds of thousands, millions, tens of millions per year. It all depends on the size of the company.

For example – according to data from research and the book “Employer Branding without Secrets”¹:

A company that hires 500 factory workers a year can save a minimum of one million zlotys (about 250 000 dollars) on recruitment. And this is only thanks to Employer Branding activities. For those interested, I throw in the calculations at the end of the article*.

However, it is not only manufacturing companies that are investing in EB. In 2008, Dave Lee, the marketing director of the U.S. Army, decided to implement his employer branding plan in the Army. At the time, the army needed more soldiers, and the recruiting itself was to be of better quality. With the right strategy, he was able to achieve these goals and still… save some nice millions of dollars. ²

So I’d like to talk a little about what makes up good employer branding activities. This will give you a clearer understanding of where such huge amounts of money come from.

Richard Mosley in his book “Employer Brand Management” compares employer brand activities to a long-distance run. This is because once a strategy is implemented, profits accumulate from various small actions before becoming a sizable sum. A company implementing its successive subsections is like a runner whose every faster step cuts off unnecessary milliseconds of the final result.

In our case, however, the result comes from acting on other variables: Here we will increase brand recognition by a few percent. Here we will improve the quality of communication within the company. Here we will improve the speed of recruitment and the quality of applications received. Here we will increase the level of employee engagement by a few points and introduce a referral program. And suddenly… suddenly we start saving hundreds of thousands¹.

How do you save with employer branding?

There are several key factors that translate into direct savings for the company. They all stem from good brand management. These include:

Lower turnover levels

Working for an attractive organization that cares about its image and its employees is a real source of satisfaction. This, in turn, translates into their loyalty. They are willing to turn down other offers and instead prefer to climb the career ladder at their favorite company. This saves on recruiting and deploying replacements.

Proof:

LinkedIn has verified that companies with well-developed Employer Branding have a 28% lower rate of layoffs than those without.³ Now multiply these numbers by the average cost of switching from one employee to a new one. It is usually between 90 and 200% of his annual earnings (taking into account onboarding, training and productivity losses).² It is very easy to calculate for yourself how huge these savings can be.

More effective recruiting

If an organization is well-known, has an attractive brand, a pleasant culture and clear operating standards, recruitment becomes much easier. Resumes are submitted by employees that the company simply needs. Recruiters spend less time considering unsuccessful applications, and selected candidates do not deliberate over alternatives. In addition, spontaneous applications from industry professionals are more common.

Proof:

According to various studies, the reduction in the cost of the recruitment process can reach tens of percent.¹ LinkedIn’s report even found that companies with a well-developed EB sector can spend half as much on recruitment as companies that are average or weak at it.⁴ This seems logical when you consider that recruitment time for a specific position is up to twice as short with them.

Attracting talent

Good employees want to be hired by companies with good reputations. They are looking for jobs that allow them to be themselves and develop their skills. They want a culture and communication that allows them to operate in a pleasant and inspiring atmosphere.

Such people may even choose an inferior salary as long as they can work for a company with good branding. That’s all because it gives them benefits other than finances: It builds their personal brand and enables them to feel needed and causal in the place where they spend most of their day. This, in turn, saves them money on salaries, and attracts talent to help grow the company.

Proof:

According to HR Daily Advisor statistics, 50% of those surveyed said they would not take a job at a company with a bad reputation, even if they were paid more there.⁵ Another survey, conducted in America by Lexington Law, confirms these results. 60% of employees would choose a job they love even if they had to earn half as much in it as in one they don’t like. ⁶

We are also unlikely to count on attracting good professionals if our employer brand is not inviting. As many as 3/4 of potential employees analyze the employer brand before applying.³

On the other hand, even if we manage to create a good image, but it is not truthful, we can quickly say goodbye to a good lineup. According to Randstad Employer Brand Research, dissatisfaction with work culture is a key factor in leaving a job. It is cited as the reason for dismissal by 80% of former employees. ⁷

Increased engagement

Here the issue is simple – we are more likely to engage for an employer we simply like and whose values we identify with. If we know that the company appreciates our efforts, allows us to grow and supports our initiatives, we are motivated to act in its favor. After all, we trust that its success, is also our success.

Brands that excel at this make their employees fans of them as well. They are heavily involved in the life of the company, take an interest in current events, and regularly contribute to internal communications media. They are even willing to defend the organization’s image when a crisis arises. In turn, engagement directly translates into their productivity and energy.

Proof:

A Gallup Institute study of millenials shows that 67% of them are significantly more engaged in their work when they feel it is valuable or in line with their views.⁸ Engagement translates into other results as well: Another Gallup study proved that companies with higher levels of engagement have 21% higher profitability.⁹

Harvard Business Review, meanwhile, describes what happens to people who work for companies they trust. They are observed to have 50% higher productivity, 76% higher levels of commitment, 29% more life satisfaction (!) or significantly more energy at work. ¹⁰

Employee referrals

Employees are more likely to speak positively about companies they like. A good brand image is a source of pride for its employee. For this reason, organizations that care about their employer branding are more likely to find ambassadors among their employees. Such people recommend the company to friends, speak warmly about it on social media or even vouch for it with their image.

Employees attesting for their friends is a great way to quickly find the best job candidates, as they pre-screen themselves. In addition, they feel responsible for them because they are directly connected to them. This cuts down on recruiting costs and helps to identify talent more efficiently.

Proof:

The Employer Branding in Poland 2023 report shows that we look at employers most favorably when employees themselves speak positively about them. This is one of the most important reasons why as many as 78% of employers in Poland offer employee referral programs. ¹¹

It’s worth remembering that we build our brand image at every stage and not just for the people we ultimately hire. According to TalentLyft, as many as 97% of candidates will tell their friends about a positive recruiting experience.¹² This is important, because even someone who doesn’t get hired can be a bridge to getting another valuable employee.

Employer Branding in Poland

According to a report by HR institute in 2023, less than 1/4 of Polish companies declared that they do not have, or are not working on implementing, any employer branding strategy. In contrast, the HR Analytics Survey (5th Edition) report states that only 2.3% of domestic organizations have no HR-related goals¹³ for 2024. Employers are thus noticing what has long been evident in the West: Taking care of employees and a good employer brand is becoming a necessity rather than a fad. Not surprisingly, year after year, more companies are allocating more and more money to work on their internal and external image.

83% of Polish companies believe that the topic of employer branding will be important or a priority for them in 2024. 53% of them have an internal image action plan. At least 47% of them will allocate a special, separate budget for EB activities in the coming year.¹¹

To quote Anna Macnar, co-author of the report: “Taking care of your organization is simply smart business.”

Calculation*:

We hire factory workers, specialists

Annual recruitment: 500 people (new hires plus turnover)

Average salary: 4,000 PLN net (employment contract)

Cost to the employer: 6800 PLN

Time to train and make the employee independent: 6 months

Cost of training and making the employee independent: 6 months x PLN 6800 = PLN 40,800 Total costs: PLN 40,800 x 500 people = PLN 20,400,000

Example turnover rate: 15%

According to reports, the average savings is 22% of costs = PLN 4,488,000

Version of minimum savings (10%): PLN 2,040,000

Rotation reduction of 5% (example assumption) = PLN 1,020,000 (about 250 000 dollars)

Note: Amounts may be higher depending on the cost of attracting, hiring and training an employee in your company.

Bibliography

¹ Macnar, Anna. Employer Branding Without Secrets. 2020.

² Mosley, Richard. Employer Brand Management : Practical Lessons from the World’s Leading Employers. Chichester, John Wiley And Sons, 2014.

³ The Ultimate List ofE mployer Brand Statistics. LinkedIn Talent Solutions, 2016. https://business.linkedin.com/content/dam/business/talent-solutions/global/en_us/c/pdfs/ultimate-list-of-employer-brand-stats.pdf

⁴ Employer Brand Playbook 5 Steps to Crafting a Highly Social Talent Brand. LinkedIn Talent Solutions, 2013. LinkedIn_Employer_Brand_Playbook.pdf.

⁵ HR Daily Advisor Staff. Better Manage Your Online Reputation to Attract Talent. 2019, https://hrdailyadvisor.com/2019/11/01/better-manage-your-online-reputation-to-attract-talent/

⁶ [Study] Americans Would Take a 50% Pay Cut for a Job They Really Love – Lexington Law. 2020, web.archive.org/web/20200811154236/www.lexingtonlaw.com/blog/news/employee-happiness.html. Accessed 30 Mar. 2024.

⁷ Randstad Poland . “Employer Branding Matters – Your Compendium of Employer Branding Knowledge.” Info.randstad.pl, 2020, info.randstad.pl/employer-branding

⁸ Inc, Gallup. “Millennials Not Connecting with Their Company’s Mission.” Gallup.com, 15 Nov. 2016, www.gallup.com/workplace/236342/millennials-not-connecting-company-mission.aspx

⁹ Harter, Jim. “Employee Engagement on the Rise in the U.S.” Gallup.com, Gallup, 26 Aug. 2018, news.gallup.com/poll/241649/employee-engagement-rise.aspx

¹⁰ Zak, Paul J. “The Neuroscience of Trust.” Harvard Business Review, Feb. 2017, hbr.org/2017/01/the-neuroscience-of-trust

¹¹ Employer Branding in Poland 2023. HRM Institute, 2023, hrminstitute.pl/wp-content/uploads/2023/06/23REBWPL.pdf.

¹² Zojceska, Anja. “15 New Recruiting Trends You Should Implement in 2021.” Blog, 24 Sept. 2018, www.talentlyft.com/en/blog/article/87/15-new-recruiting-trends-you-should-implement-in-2021

¹³ “The State of HR Analytics in Poland Based on the v Edition of the HR Analytics Survey.” https://policzhr.pl, HRR3BELS, 2023.