Every time a business invests in a new project or a venture, it involves time, efforts, resources, and finances. Now, the RETURN ON INVESTMENT (ROI) becomes an important Key Performance Indicator, an often-used metric by businesses. This is a useful tool to measure success which drives the business profitability and ensures efficient deployment of capital.

Ultimately, the game in any business is to show profitability combined with growth. Human Capital is the sum of creativity, performance, knowledge, and competence on the employees’ part, which has an important role in creating value for customers, leading to increased revenue.

Business Functions that Affect the ROI

While assessing the business strategy of any organization, management usually looks at trying to perfect the marketing mix or improving productivity to increase the ROI.

Similarly, there are other functions of businesses that would strive to improve the ROI by cutting costs or through improved processes. Each of them is important and cannot be neglected.

However, in a competitive business scenario, other strategies can have a significant effect on the business metrics. These are often neglected and not given due importance.

In large businesses, Human Resources is the most neglected and underrated function, and management often does not place much emphasis on this area. A business that has a large/front-facing workforce has the potential to increase the ROI through effective “Employer Branding”.

What is Employer Branding?

In simple words, Employer branding refers to the reputation of an organization as a place to work. Thus, we need to assess a business from the viewpoint of an employee, whether or not it has a harmonious work environment that makes the place desirable for them to work there.

On the other side, from the point of view of the organization, employee retention and ease of new hires have a bearing on the costs and external perception.

At Brandemix, it has been observed that these days, the work culture of the organization is viewed closely by the job aspirants. The organizational beliefs and what they can expect while working there can lead to a radically transformative process. A better and committed hire leads to a stronger team, one that is committed to the organization’s vision of the brand. A happy workforce improves business metrics like ROI.

Why Do Modern Organizations Spend Tremendously on Employer Branding?

  • Reputation: Job aspirants want to be employed by reputable organizations for various reasons for the image or the presumption that these companies are strong.
  • Complex Hiring Processes: Hiring the right person for a role is a difficult process. Also, notwithstanding the aberration of a skewed job date due to the pandemic, the unemployment rate in developed countries is getting lower by the year. To attract and retain performers is key.
  • The Perceived Employer/Employee Value-Proposition is Important: Increased use of social media has led to communication on public forums that can be accessed by all stakeholders – internal and external and can have a spinoff on public perception.
  • It’s not only about Compensation, it’s the Employee experience: The organizational culture that has a purpose leads to employee satisfaction, personal development and it pays for a business to invest in this area as it leads to a stronger brand.

How Does Employer Branding Improve Business ROI?

There can be several tangible and intangible benefits to be had with Employer Branding. Seven ways that Employee branding affects the ROI are:

1. It Makes the Recruitment Process Easy and Fast

Hiring is a time-consuming process, both financially and in terms of opportunity cost for the time taken till the post is filled. A good employee brand reduces this time substantially, thereby leading to direct benefit.

2. Employees Refer Their Network

A satisfied employee is the company’s best spokesperson. Referrals reduce recruitment time, costs and improve the quality of hires.

3. It Improves the Quality of Hire

Good employee brands attract the best talent in the job market thereby improving the quality of hires. A quality hire is an asset for a company.

4. Brings Down the Hiring Cost

Effective employment branding leads to a reduction in recruitment costs as well as less time, workforce, money, etc. all that is required in the process.

5. It Boosts Employee Retention Rate

A good organizational culture, the feeling of belonging, and motivation lead to better retention. This ultimately brings stability and economy within the organization. A high employee turnover can lead to disruption and high replacement costs.

6. It Improves Employee Engagement Considerably

Satisfied employees are generally zealous, motivated, and passionate about their work. This leads to better productivity and is the growth driver for the organization.

7. It Translates to Better Employees Performances

External benefits of Employee Branding are usually derived through a better corporate brand perception driven by employees acting as the ambassadors. This has a direct spinoff, leading to improved business performance in the marketplace.

Over to You

To sum up, employees are the organization’s greatest assets. Positivity in their social and professional interactions can have wide-ranging benefits that ultimately help the organization to grow and move forward.

In today’s technology-driven world, the lines are blurred between professional and personal lives. Digital communication and collaboration enable knowledge sharing across the organization. Business relationships go beyond workgroups and the employees need to keep evolving.

Going forward only those organizations that have an employer brand will be able to attract, hire, and retain top talent, besides leaving an indelible external impression.

Read more: Debunking Personal Brand Cultural Myths: Part 3