When choosing an employer, employees consider more than just salary. According to a study by iConText Group, nearly 40% of job seekers pay attention to the HR brand of the business: how the company positions itself in the market, the working conditions it offers, its reputation, and how former and current employees speak about the employer.
How Job Seekers View a Company’s HR Brand
The stronger the HR brand of an employer, the easier and faster it will be for the business to hire employees. Contacts with potential employees automatically become warm since candidates already know what the company does.
In this article, we discuss what constitutes an HR brand, the benefits it brings, and how to properly develop it.
What is an Employer Brand and Why is it Important?
An HR brand, or employer brand, is the image of the company as perceived by employees and candidates, as well as its reputation in the labor market. Many companies are currently experiencing difficulties hiring new employees, and this includes not only highly qualified specialists. For example, there is also a shortage of workers in vocational professions that support the production process, such as builders, machinists, electricians, drivers, and cooks. One of the reasons for this is the demographic situation. The current unemployment rate in the country is 2.7%, which is below the normal rate of 4–5%, meaning the demand for workers exceeds the supply.
As of March 2024, the unemployment rate was 2.7%.
However, even with an increased demand in the labor market, employers are not ready to raise salaries; the business economy doesn’t allow it. Thus, the material conditions among employers at the same level are approximately equal. Companies can compete for employees by developing their HR brand. A job seeker will choose the employer that seems closer to them in spirit and work principles.
Advantages of Developing an HR Brand
The competition for employees is not the only issue that developing an HR brand can help with. There are other advantages:
- Employee engagement increases.
- Only loyal employees remain in the company.
- Staff turnover decreases.
- Time spent on recruiting staff reduces.
- Employees are more likely to recommend the company to acquaintances.
Increased Employee Engagement.
When employees clearly understand the company’s goals and feel that management cares about them, they strive to perform their work better and achieve results. Greater motivation among employees leads to greater business efficiency with the same production investments.
What Influences Employee Engagement.
Only Loyal Employees Remain.
If a person’s values align with the company’s values, they are more likely to continue working and perform their job well. If individuals do not share the employer’s goals and values, they often leave the company. Thus, a strong brand naturally filters out employees.
Decreased Staff Turnover.
If the employer brand holds value in the eyes of employees, they will have a desire to stay with the company. Even if a competitor with a weaker brand offers a salary that is 5-10% higher, the specialist is more likely to stay with their current employer. Retaining existing employees is more beneficial for employers than searching for new specialists, which can be much more costly.
Seven Steps to Reduce Employee Turnover from the HR Director of ВсеИнструменты.ру.
Reduced Time Spent on Recruitment.
Typically, the job search operates similarly to a sales funnel, although individuals may take more time to make decisions. A strong HR brand encourages candidates to make quicker decisions regarding job offers.
Sales Funnel: How to Build and Analyze It.
Current Employees More Often Recommend Their Employer.
Employees usually want good colleagues to join their team. Therefore, the quality of personnel hired through referrals is usually higher. A clearly formulated employer brand simplifies the work of the HR department or hiring specialist: fewer irrelevant candidates show up at interviews, and fewer resources are spent on recruitment.
Components of an HR Brand
An employer brand consists of several components that form the company’s image:
- Brand Core. This includes the company’s mission and values. Any business exists to generate profit, but the company’s goals do not end there. People need to know that their activities are beneficial to others, which is reflected in the company’s values.