How middle-market companies can enhance employer brand


By Neil Amato

Middle-market companies with strong employer brands stand to make greater financial gains than those with less-defined employer brands.

Employer brand, based on a recent report by the National Center for the Middle Market (NCMM), is defined as a company’s image and reputation as a place to work as perceived by current employees, prospective candidates, and the general public.

What the public says about a company matters when it comes to recruiting top talent, which is no small task for organisations competing against behemoth corporations that have name recognition, established identities, and, often, bigger salary offers than their midsize brethren.

But few midsize companies say they have a strong employer brand: Just 25% in the US say they have a clear brand with which they are satisfied, according to the NCMM survey. About the same percentage say they have a strong employee value proposition (EVP), the term for what a company provides to employees in tangible and intangible benefits.

The report offered four takeaways for middle-market organisations:

  1. A unique employer brand and persuasive EVP can give middle-market organisations the edge they need to secure top talent. It’s difficult for midsize firms to compete with larger rivals on name recognition or pay. But middle-market companies can secure top talent if they have strong reputations and unique benefits and rewards.
  2. Companies with an established employer brand and strong EVP outperform their peers. Such companies have higher revenue and employment growth. The survey showed that mean revenue growth for companies with a clear employer brand was 20.1%, and employment growth was 12.3%. Those with a less developed employer brand had mean revenue growth of 6%.
  3. Top talent candidates seek more than an attractive salary. Salary is the leading benefit to attract the attention of a passive candidate, but research shows candidates are also interested in opportunities for advancement and work/life balance.
  4. Companies with the most compelling EVPs offer attractive and unique options. The quality of the staff, meaningfulness of the work, and company culture are leading components of effective EVPs.

Companies that are highly regarded have the chance to differentiate themselves as a destination for talent. On the other hand, research shows, many workers will not consider joining companies with dented reputations.

A report by EY showed that nearly 80% of workers in the Asia-Pacific region would be unwilling to work for companies involved in bribery and corruption. Also, 53% of UK workers in a LinkedIn survey would not consider taking a role at a company with a poor employer brand, no matter how much money they were offered.

Those types of companies have an image problem. But at least they have an image. Midsize companies, because of size or type of business, often lack name recognition, even if they have a strong culture with an engaged workforce. They often don’t have a large budget for recruiting future talent, which they must do if they intend to grow.

“A lot of these companies aren’t attending job fairs or recruiting events,” said Doug Farren, associate director of the NCMM. “When they do (attend recruiting events), candidates have no idea what the company does or what they’re all about. So that’s a challenge.”

The first step in building a stronger brand is recognising that, whether they know it or not, all companies have employer brands. Organisations can learn more about what exactly people are saying through anonymous employee surveys, social media and job-site mentions, and exit interviews.

Once a company has a feel for its reputation, it can start to come up with ways to strengthen its brand and differentiate itself. A company that can clearly articulate its brand and EVP – and use that brand as a recruiting tool – has a leg up on finding rising stars.

Of those who say they have a clear employer brand, 83% believe that the brand helps the company acquire top talent. Among those with a less-developed brand, 21% say the brand helps them in securing top talent. In a separate study, by the UK’s Chartered Institute of Personnel and Development, 86% of companies had taken steps in the last two years to improve employer brand, and 25% had taken steps to measure the impact of that brand.

Reaching the passive candidate

More than 60% of potential workers are passive candidates, meaning they are satisfied with their current job or open to other opportunities, the NCMM report says. That’s different from active candidates, which includes those currently not employed or those who are not happy in their current job and are looking to work elsewhere.

Companies that fail to tap into the passive candidate market lag behind competitors in terms of revenue growth. The survey showed that 63% of companies that had revenue growth of 11% or more made a commitment to change their process when recruiting passive candidates.

One example of a company that has excelled at finding passive candidates and is growing at a steady clip is Jeni’s Splendid Ice Creams in Columbus, Ohio. Regionally, Jeni’s is known as a strong corporate citizen, and its employees enjoy such perks as supplemented gym memberships, free ice cream, and a one-month sabbatical for every three years of work.

But few candidates in major cities have heard of Jeni’s, despite recent growth.

“If someone is located on the coast in New York or (Los Angeles), they’re not always excited about the prospect of moving to the Midwest,” Eric Duerksen, the chief people officer at Jeni’s, said in the report. “This makes it especially important to craft a compensation package that goes beyond salary to include meaningful and unique benefits.”

The company recalled its products in April after listeria was found in a pint of ice cream in Nebraska. The source of the bacteria eventually was traced to its Ohio production facility. The company closed its stores for more than five weeks during the recall, but it paid full-time employees 50% of their wages whilst closed. In mid-June, the company announced that routine swabbing had led to another listeria discovery in the production facility. The company didn’t recall products but did close shops for about a week because of low inventory.

The way the company responded, with regular and detailed statements on its website, and the way it treated its workforce can go a long way towards building Jeni’s employer brand, Farren said.

“The employees could have been out on the street or not making anything during the shutdown, so that says a lot,” Farren said. “The employees are willing to bend over backwards after that.”

Related CGMA Magazine content:

Midsize US Companies Struggle to Retain Employees”: An increasing number of midsize US companies are struggling to retain talent, a recent Deloitte survey found. To sustain expected growth, companies are planning to invest more in technology, increase worker compensation, and boost training.

4 Traits of High-Performing Companies”: Companies with a well-conceived, well-communicated strategy for interacting with customers are more likely to have financial success, according to a survey report. The report offers four key findings about how high-performing companies think about and carry out customer-engagement strategies.

Neil Amato (namato@aicpa.org) is a CGMA Magazine senior editor.

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