Why Employer Branding is Important

When thinking of branding, our mind often goes to consider the company’s logo, social media presence, advertising, brand messaging, and how the brand is perceived by consumers in general.

And while branding for consumers is vital for businesses, so is employer branding. 86% of women and 67% of men in the United States would not join a company if it has a bad reputation. Therefore, how current and potential employees perceive the brand is also crucial to its business.

Having a strong employer brand has its effects on all areas of business – direct effects as well as indirect ones. Below are three reasons why as an employer, you should work on your employer branding.

Decreases Costs

When your current employees are satisfied with the workplace, they become like brand ambassadors. Through word of mouth, more people want to join the same workplace. Consequently, instead of HR reaching out in search of employees, potential employees reach out to the company themselves.

Looking at the numbers, a strong employer brand can reduce the cost of each new employee hired by as much as 50%. With candidates finding and applying to positions themselves, and with them being qualified candidates from the circles of your existing employees, a big chunk of recruitment costs can be saved. These savings can then be better utilized somewhere else like, investing in training and development to improve the qualified talent being recruited.

Alternatively, a negative employer reputation can increase the cost per hire by 10%. Convincing people to join a company with a bad reputation means covering up with increased salaries as compensation – and that is only for the people that can be convinced to join. 

The recruitment process itself can be very underwhelming for a company with a bad employer brand, with either a low number of qualified applicants or a high number of candidates that do not fit the role altogether. When compromising on the people taken on board, it means compromising on the quality of work received from them once they start working. Inefficiency would further increase costs and hence decrease profit margins.

Decreases turnover

With the finest talent wishing to join your company because of your employer brand, it also means that people that are the best fit for the job are being recruited. Along with that, maintaining your employer brand requires you to be consistent in providing your employees with a healthy work environment, a result of which would be happier and more satisfied workers willing to put in their best at work. Think of it like this  – a job that gives you the bare minimum in employee benefits can also only expect you to give them your bare minimum at handling your responsibilities at work. But an employer that makes you feel comfortable and safe at work along with the best employee benefits included, makes you take initiative at work to be seen and appreciated by your employer so you can stay even longer.

Staying at the same place does not become a default because of a lack of other better options but it becomes a choice that employees actively work towards – not only improving their own prospects and growth trajectory but also your business’s.

A study suggests that investing in employer branding can reduce turnover by 28%. When people that know the brand inside out stay at the company, not only is their experience reflected in the quality of their work but they are more likely to develop an emotional attachment with the workplace. When these people compare other potential work offers, they will not be as interested because of their employee benefits at their current work as well as the emotional attachment they have built. When you have invested in employer branding, your current employees will find other places relatively unattractive and hence would be willing to stay ensuring that you get to keep the best people on board possible.

Improves the Company’s Growth Trajectory

When attracting the best candidates and then convincing them to stay is great for their own productivity and career growth, it is also great for the brand that they are working for. Motivated employees mean higher productivity, which means better business with increased revenue and hence growth for the company.

While employer branding is great for recruitment and retention, it also has a trickle-down effect on other departments.

The way a brand is perceived by its employees also has an effect on how its customers see the same brand.  A company that has employees that are happy to be a part of the team are great brand ambassadors. They not only work for the brand with responsibilities in their job description but in a way also act as great salespeople when they endorse the brand.

Moreover, happily posting about their work or workplace on LinkedIn is free marketing for the brand- both for the consumers as well as for the pool of potential candidates.

A brand that is exploitative of its workers and has a negative employer brand makes the consumers think along the lines of whether they want to be associated with a brand that treats the people that work for it in questionable ways. In extreme cases, it may also push the consumers to boycott the brand altogether. Alternatively, a strong employer brand can attract more customers and bring about better business for the consumer brand.


Having a strong employer brand is crucial for business. It not only makes talent acquisition easier and more efficient but also makes the acquired talent want to stay. Retaining qualified employees, makes them build an emotional connection with the brand, convincing them to give their best at work. It also makes them brand ambassadors who serve as the best referrals for new employees, the best salespeople for consumers, and the best marketers for both the customers as well as potential candidates. All these factors combined improve revenue for the brand and grow it in ways unimaginable with a negative employer brand.