HOW TO MEASURE THE IMPACT OFEMPLOYER BRANDINGHCI EXECUTIVE SUMMARY
2HOW TO MEASURE THE IMPACT OFEMPLOYER BRANDINGWhile the concept of product and trademark brandshave been around for quite some time, the conceptof employer brand is relatively new. In brief, anemployer brand is the gestalt of an organization; thesum total, or essence, of a company’s culture,ethics, reputation, products and services, and theway it values its workers. Unlike the more familiarmarket-oriented concept of branding, whereproducts or services with recognizable and trustedtrade names may be associated with a company’sname, employer branding is also meant tocommunicate an organization’s attractiveness as aplace to succeed for current employees and to toutits value proposition to prospective hires. The lastpoint is of immediate signiﬁcance to organizationsthat want an advantage in the increasinglycompetitive search for talent: Almost half of U.S.workers made a decision to apply for their currentjob based in part on the company’s image, or brand.1Organizations have an employer brand whetherthey know it or not. This paper will look at ways tomanage branding and how to measure the impactof branding efforts.INTRODUCTIONBased on the assumption that an organization hasdetermined the value of its brand in retaining itsmost valuable employees, converting potentialrecruits into applicants, and applicants to newemployees, what parts of a company’s employerbranding work well and what parts need work? Oneway to determine this is for an organization to doan analysis of attributes that attract and/or retaintalent. Figure 1 shows an example of this.In this analysis, the company determined thestrength or weakness of its employer brand driversby comparison against an internal benchmark.2Here,the company’s high value branding attractors are areputation as a fun place to work, its trainingopportunities, the perception among candidates thework is familiar (thereby making the possibility ofintegration into their new job easier) and careeropportunities. But it is weak in other high valueattractors, including a reputation as an innovator.ASSESSING THEIMPACT OFBRANDING EFFORTSOne way to determine why the company inFigure 1 is weak in key value attractors is to surveyits employees. It’s important to ﬁrst establish abenchmark. What you really want to measure is thereality of what it’s like to work in your organizationand then compare from that baseline where youneed to be.What signs does one look for, beside impact to thebottom line, to know if employer branding effortshave an effect? Sean Otto of Qualtrics Labs looks atthe number of hits the career portion of hiscompany’s Web sites gets; how employees discussthe company in weblogs and other media; and theway employees talk about company culture. He alsomonitors how the culture changes over discreteperiods. At Emerson Electric Co., Sandip Malliksays, “We look at three broad indicators. The ﬁrst isthe impact on employee satisfaction, especiallyparameters like pride in working for Emerson,would they recommend Emerson to their friendsand relatives, etc. The second is the attrition(turnover) statistics, especially reasons given byEMPLOYERBRANDING LEVERSFIGURE 1Source: Mckinsey — Using Branding to Attract Talent
3HOW TO MEASURE THE IMACT OFEMPLOYER BRANDINGemployees [who leave] with high value to thecompany. Third is our ability to hire the best fromengineering and business schools, and laterals fromthe market. The attractiveness of the company in allthree counts needs to go beyond the pay. Brandingplays a big role in becoming an ‘employer ofchoice.’” Starbucks’ Paul Rogers uses “tacticalmeasurements” to get feedback that helps thecompany reposition its Web site message to attractqualiﬁed candidates. One method is an in-homeinterview of candidates who have applied; anotheris a satisfaction survey of candidates who acceptedor declined a job offer. Such methods help Rogersreﬁne the branding message to increase the numberof candidates referred by current employees.A 2.6% return above market average over the longterm (provided this level of return can be sustained)is a signiﬁcant ﬁgure. When the negative 6.9% returnfor weak brands is considered, strong brands in theexample return 9.5% more to shareholders than weakones. Can the same analysis be applied to employerbranding? Quite frankly, the concept is so new and sofew companies have even examined it thatanswers tend to be cautious at best. Asked whetherhe’s been able to quantify branding activities inﬁnancial terms, Sandip Mallik says, “We are at a verynascent stage in the journey. At the present momentwe measure for impact on turnover and operationalperformance. We are debating economic valueadded as an optional measure but that’s not got offthe drawing board yet.” At Choice AssetManagement, Madeline McGartlin says the program isstill too new for a strict ﬁnancial assessment.“I can’t say we have a lot of quantitative data,”admits Paul Rogers. In terms of ROI, Rogers looksat the numbers of candidates referred by employees.In work done by Regina Miller, CEO and Founder ofThe Seventh Suite, “We held people accountable forcertain behaviors (related to customer servicedeliverables) and looked at EBIDA.”3In regard to thelarger issue of employer branding, Miller believesthat “if a company is doing well and over-achievingin all targets they’re usually not isolating factors ...and saying ‘here’s what’s causing us to do well. Let’smake the direct correlation in our analysis betweenwhat the brand[ing] is getting us and what thevaluation of the company is.’” On the other hand,she says “If companies are doing poorly they mightwant to ask ‘what’s the implication of our brand onperformance?’”JWT INSIDE takes a similar view on the value ofalignment throughout an organization. A companythat has aligned its human capital needs with itsbusiness plan has a pretty good idea of its realityand what it requires in terms of talent, also ﬁnding ahigh correlation between brand alignment andbusiness success. You can’t do a super job ofemployer branding, have a terrible businessstrategy, poor products and faulty quality and expectto succeed in the marketplace. The cart can’t dragthe horse — understanding who you are as anemployer doesn’t make a poorly-run business better,but it can make a good business more successful as itFINANCIAL IMPACTSSo far we’ve discussed the effectiveness of employerbranding in terms that are not always easy toquantify, even if they can be tracked independently:Employee satisfaction•Attrition statistics•Ability to ﬁnd the best candidates•Attracting those candidates to apply•Increasing employee referrals•Hits to a company’s career site•Favorable media presence•But what is the impact of employer branding to thebottom line? Can branding efforts be quantiﬁed inﬁnancial terms? As a basis for further discussion, Figure2 provides an example of traditional, or product,brand inﬂuence, in this case measured as total returnto shareholders compared to market average.FIGURE 1: Brand Inﬂuence on the Bottom Line
4HOW TO MEASURE THE IMPACT OFEMPLOYER BRANDINGattracts more of the right people. Not to say thatemployer branding will save your business, but thereare many, many business factors that impact yourbusiness success. One factor is your ability to ﬁndand keep employees who are able to deliver on yourbusiness promise because they are well-aligned withyour value proposition.MEASURINGBRANDINGEFFECTIVENESSOnce a company decides to actively manage itsemployer branding effort, how long will it take beforethere’s a sense that the effort is effective? “We arelooking at a twelve month run,” says MadelineMcGartlin. Sandip Mallik estimates at least 12 to 18months, while Brenda Tooker at Harcourt Educationguesses six months to a year. But not everyone has soclear cut an answer. “It’s really hard for me to put atimeframe on it,” says Rogers. He sees branding asan “ongoing platform you keep extending to meet theneeds of the organization.” In this view of a dynamic,adaptable brand, what’s effective is “what worksevery day.”JWT INSIDE largely agrees with Rogers’ assessment ofmeasuring branding effectiveness. It’s not a string witha beginning and an end. It’s a constant process. Onecan’t possibly put a time on it unless it is correlatedwith some sort of investment. It would only be aprocess we could give one answer to if everyone tookthe same approach and made the same dollarinvestments. Again, JWT INSIDE urges a focus on acompany’s internal alignment of human capitalmanagement, business model, and strategy, andmeasures a branding effort by the impact it has onall three components. A brand is not about what yousay but about what you do. What you’d like people tobelieve about you is irrelevant unless backed up withaction. Rather than try to look at the effectiveness ofbranding strategy as a whole, the company suggests ayearly examination of speciﬁc components (what Rogerscalls “tactical measurements”) for example, time tohire, cost of hire, acceptance level, etc. Since one ofthe main goals in deﬁning your employer brand is to beable to attract the most appropriate talent and get iton board, this is a good place to measure.Miller suggests measuring at the two-year mark orperhaps between 18 months and two year. Herparticular experience with the Czech communicationcompany, Oskar, (since sold for $1.5 billion) allowedher to see the effects of a branding campaign fromthe very beginning. The company’s name said littleabout what it did, but within six months of thelaunch of a new branding campaign it had achieved98% consumer awareness. The problem, Millerrecalls, was that it had a hard time recruiting thehighly skilled technicians it needed because itsconsumer brand image wasn’t associated with itshigh level of communication technology. Onesolution found to counter this disconnect was aninternal employee survey to get at the heart of whypeople liked working there. The company’s clever andinnovative consumer advertising, it was found, gaveit a reputation for being “smart” and association with“smart” was the leverage the company needed toattract technical talent. Within two years of thecampaign’s launch in 2000, U.S.-based ComputerworldMagazine named Oskar as one of the Top 100 bestplaces to work for IT people.WHO OWNS THEBRANDING EFFORTOne question not yet asked but pertinent to thisdiscussion is, who should have ownership of thebranding process? Does it belong to the marketing orhuman resource functions in an organization?McGartlin believes the ownership should be betweenhuman resources and the company. “It’s all about thecompany,” she says. At TELUS Sue Comeau saysresponsibility is shared between HR and theoperational business units. Brenda Tooker of Harcourtplans to apply the employer branding effort to HRstafﬁng functions as a ﬁrst step. In JWT INSIDE’s work,the relationship stands on the HR and stafﬁng side butit’s a marketing position at its heart. Branding worksbest with great collaboration between HR andMarketing. Rogers agrees, “You want it to be a verynatural extension of your company’s brand but reallyspeaking to the audience you’re trying to recruit.”The best way to do this, he believes, is for talentedpeople from Marketing and HR to work together.Miller believes “this is a really big issue for the headof Marketing and the head of HR to be joined at thehip on this topic because it’s a question of culture.What you’re really doing is affecting the [corporate]culture when you’ve created an employer brand.”
5HOW TO MEASURE THE IMACT OFEMPLOYER BRANDINGBoth parties, HR and Marketing, must rethink theirskill sets says Miller, and each must try to understandthe niche where their particular skills interact, orhave the best effect. Marketing may be moreconcerned, for example, with the “front end” of thecompany’s Web site; HR with the career pages, butboth must be in alignment with the company’s goalsto make the best use of each. It behooves the folkson the HR side to get ahold of this issue before itgets deﬁned for them. Many marketing organizationsare dealing constantly with the issue of employeeengagement and its role in the communicationprocess, and its role in the success of the overallbrand. JWT INSIDE suggests HR and Marketing askfor partnership in the process of employer branding.“The process starts at the top and at the table withexecutives,” Miller notes.Employer branding is rapidly gaining traction as aneffective way for companies to retain and engageemployees, attract new talent, and complementtraditional branding efforts. As yet the practice istoo new to deﬁne its ROI in speciﬁc terms that havewide agreement, but certain results can bemeasured with a high degree of accuracy. Internallyone can look for the following:Employee satisfaction, as measured by length of•service, turnover statistics, and targeted surveysIncreased level of employee referrals, evidence•that employees believe the company is a goodplace to workDecreased absenteeism and a good safety record•The effectiveness of the branding effort on acompany’s ability to attract and hire the best talentcan be gauged in several ways:Hits to a company’s career site and number of•applicants compared to pre-employer brandingeffortsConversion rate of applicants to potential•candidatesJob acceptance rate of candidates•Cost to hire and time to hire•There are, of course, other measurements of brandingeffectiveness that will be developed or become moreclear as companies’ efforts mature and are reﬁned.And a company whose employees, business model,CONCLUSIONand strategy are already in alignment has anadvantage because it will be better able to articulateits brand.149% according to a 2001 Maritz poll2Language adapted from McKinsey & Company study3Earnings Before Interest, Depreciation, and Amortization
6HOW TO MEASURE THE IMPACT OFEMPLOYER BRANDINGBased on the Human Capital Institute webcast, How to Measure the Impact of Employer Branding on April 12, 2006.PANELISTSRegina MillerCEO and Founder, The Seventh SuiteRegina Miller has more than 18 years of experience in International Operations, Organization Development, Human Resources, andLeadership Development. Based on her experience in launching successful companies, growingproﬁtable businesses and being part of an executive team, she is well positioned to assist growing companies bolster their competi-tive edge with aligned strategy deployment, executive and team development, internal branding and progressive people practices.She holds an undergraduate degree in Political Science from Hunter College in New York; a Master’s of Art degree in Human Resourc-es/OD from the New School for Social Research in New York; a diploma from the Human Resources Executive Program at the Univer-sity of Michigan in Ann Arbor; and a diploma from INSEAD inClinical Organizational Psychology. She currently is the author of three blogs: http://blogs.bnet.com/hr/,www.corante.com/futuretense, www.theseventhsuite.comPaul RogersProgram Manager for Employer Branding, Starbucks Coffee CompanyPaul Rogers drives the execution of initiatives to promote Starbucks as a best place to work around the globe. Paul’s role includesthe development of a branding campaign that captures the unique beneﬁts of Starbucks as an employer, while recognizing the greatvalue that the company places on its current “partners” or employees. By working closely with key stakeholders across the organi-zation, Paul’s ultimate mission is to facilitate the recruitment and retention of future talent to Starbucks by attracting high poten-tial candidates, building meaningful relationships with them, and ensuring a legendary candidate experience. Paul graduated fromthe University of Texas in Austin and currently lives in Seattle, Washington.MODERATORBill CraibSenior Director — HCI Communities, Human Capital InstitutePrior to joining the Human Capital Institute, Bill was the Founding Director of AIRS Human Capital Solutions, and served as Directorof Training and Curriculum Development from 1997 to 2003. An early Internet adopter and advocate of its far-reaching potential, Billdeveloped his practical experience by establishing an Internet-centric executive search practice focused on telecommunications.This endeavor helped lay the groundwork for the signiﬁcant contributions he has made to the core curriculum of AIRS. Bill earned aBS Degree from the Newhouse School of Public Communications at Syracuse University and spent 10 years as a journalist working forseveral media organizations, including ESPN and the Rocky Mountain News, before entering the recruiting industry.ACKNOWLEDGEMENTSThis White Paper is made possible by JWT, sponsors of HCI’s Employer Branding Track.ABOUT THE HUMAN CAPITAL INSTITUTEThe Human Capital Institute is a catalyst for innovative new thinking in talent acquisition, development and deployment. Throughresearch and collaboration, our programs collect original, creative ideas from a ﬁeld of top executives and the brightest thoughtleaders in strategic HR and talent management. Those ideas are then transformed into measurable, real-world strategies that helpour members attract and retain the best talent, build a diverse, inclusive workplace, and leverage individual and team performancethroughout the enterprise.ABOUT US: JWT INSIDE helps organizations advance employee engagement through comprehensive advertising, marketing andemployee communications services. Measurement tools, consulting resources and strategic approaches are employed to put the rightpeople in the right jobs and keep the workforce engaged. The agency has 12 ofﬁces and 9 satellite locations across North Americaand internationally. It is a subsidiary of JWT, the largest advertising agency in the United States and the third full-service network inthe world. Its parent company is WPP (NASDAQ:WPPGY). Visit www.jwtinside.com for more information.