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Higher Stakes

A new research report finds that 81 percent of job candidates wouldn’t join a company with a bad reputation.

By the Editors

The importance of a company’s reputation cannot be understated. Corporate Responsibility Magazine’s* annual corporate reputation study indicates that an organization can be perceived as “good” or “bad,” and this perception directly affects both the quantity and quality of talent, and people won’t work at a company that gives off a bad impression.

CR Magazine worked with leading strategic recruitment process outsourcing partner Cielo on the survey, titled The Cost of a Bad Reputation. The results were announced at the 2016 COMMIT!Forum in New York City on Oct. 18.

The report presents the findings of a telephone survey conducted among two national probability samples, which, when combined, consists of 1,001 adults, 482 men and 519 women 18 years of age and older living in the continental United States. Interviewing was completed Sept. 22-25, 2016; 501 were from the landline sample and 500 from the cell phone sample.

According to the results, the implications of a bad reputation remain the same year-to-year: Talent is often unwilling to consider an employment at a company with a negative reputation and when they do, it comes with a high cost.

Which behaviors are most harmful to a company’s culture and reputation? Respondents indicated:

• Public exposure of criminal acts (41 percent); • Failure to recall defective products (25 percent); • Public disclosure of workplace discrimination (20 percent); and
• Public disclosure of environmental scandal (13 percent).

The reason that company reputation is so important today is because quality hires are looking for companies that share the same beliefs.

“Economic shifts have created a candidate-centric hiring market, particularly for highly-skilled and niche roles the talent organizations need most,” says Sue Marks, founder and CEO of Cielo. “To attract, hire and retain great people, organizations need to have an employer value proposition that reflects an authentic work experience. If that employer brand is tarnished by a poor reputation, it is more challenging to hire the best people, which makes it difficult to achieve business success.”

Even an incentive such a higher compensation won’t always win hires. Only 62 percent of those surveyed would take a job with a company that had a bad reputation if they were offered more money. Males are much more likely than females to take the job, 69 percent versus 54 percent,respectively. Of the 2016 respondents, 49 percent would need a pay increase of 50 percent or more to consider moving to a company with an unfavorable reputation.

“According to the data, women and experienced workers in particular are often unwilling to consider an employment offer from an organization with a bad reputation, and when they do it is for a premium over what companies with a good reputation can offer,” Marks says.

However, the younger a job seeker is, the more likely they are to overlook a company’s negative reputation.

Young people in the 18-34 age range are the least concerned about corporate reputation. Just under three-quarters (73 percent) would take a job with a company with a bad reputation, versus 56 percent of those 35 years and older.

But nearly everyone wants to work for a company that is perceived as great. The vast majority of 18- to 34-yearolds, 91 percent, would consider leaving their current jobs if offered another role with a company that had an excellent corporate reputation. Almost all (97 percent) of those in the 35-44 age range would do the same, and companies recognize this.

“Organizations that are successfully maximizing their employer branding efforts have started by developing a clear and compelling employer value proposition,” Marks says. “They take that deal to the market through digital channels—recruitment advertising, social media platforms, custom websites—but also enable their employees as advocates to spread the message across their networks.”

Companies suffering from damaged reputations should expect greater hiring costs and more difficulty in attracting and retaining talent compared with competitors with good reputations. However, even though it’s easier for a “good” company to keep their reputation high than for a “bad” company to improve; it’s not impossible.

“It is much easier to maintain a positive reputation than it is to rebuild from a negative reputation,” Marks says. “But, if an organization takes the necessary steps and shows appropriate growth and transformation, a damaged reputation can be overcome, though it will often take years of intentional action to change the minds of consumers.”

How can it be overcome? It’s not easy, says Marks, but it essential because nowadays, job seekers are more than just candidates.

“Each and every candidate is a potential customer, which means that how they are treated during the hiring process has a direct impact on their future purchase decisions,” she says. “Organizations can showcase their efforts to improve their reputation by investing in a thoughtful and intentional candidate experience that integrates high-touch, personalized outreach with high-tech convenience.”

Corporate Responsibility Magazine is a sister publication of HRO Today.

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