How applying consumer branding techniques to the world of HR can generate revenues

In organisations the world over, financial decision-makers and executives are poring over the area of greatest expense to their businesses. They carefully examine financial records, search for potential savings and try to find ways of reducing the largest expense on the balance sheet – people. HR is steadfastly viewed as a cost centre – and rightly so, with the cost of people frequently the most expensive part of a business.

But what if HR could demonstrate bottom-line savings – or even a contribution to profit?

Employer branding

Employer branding is a relatively recent addition to the HR and recruitment arsenal. There isn’t a set definition, as employer branding can mean different things to different people, but in essence an employer brand establishes the identity of the organisation as an employer. It encompasses the organisation’s values, systems, policies and behaviours towards the objectives of attracting, motivating and retaining the organisation’s current and potential employees.

Naturally, employer branding shares strong links with consumer branding as the employer brand usually reflects a significant element of the consumer brand. Any well-managed and well-communicated consumer brand will provide a boost to the recruitment efforts of an organisation. But it’s when companies begin to bring consumer marketing techniques into the world of HR that employer branding gets really interesting.

Building the business case

Consumer marketing has long been forced to justify its existence by proving that marketing activity works, demonstrating the impact to the bottom line of the business. Effective employer branding programmes draw upon this core principle, generating demonstrable business cases and highlighting dollars saved – or generated – through investment in best practice.

A good place to start is identifying savings at the recruitment end of the employee lifecycle, during the recruitment experience. Research from online job boards* indicates that when applicants have a negative experience during the recruitment process, 76% are less likely to take a job at that company, 82% are less likely to recommend the company to others, and 64% are less likely to buy that company’s products or services. The last statistic is the most telling. Given the thousands, or tens of thousands, or even hundreds of thousands of applications made each year, a poorly-managed employer brand and recruitment process results in the loss of many potential sales.

The converse is true – a great employer brand and engaging recruitment process can realise revenues. Should exposure to the employer brand through the recruitment process have such a positive influence that an applicant becomes a customer, the organisation can realise additional revenues. If an organisation that transacts 10,000 applications per year can convert just 5% of these candidates into customers, it gains 500 customers. Multiply the number of new customers by average customer spend – and that’s HR’s contribution to revenue.

So, how do we measure this? The answer is straightforward – incorporate special offers into candidate management, and track them at point of sale. For instance, an organisation in the FMCG sector could consider offering promotional or discount coupons to unsuccessful applicants, and track uptake of offers through the normal promotion management channels. Other sectors could offer similar benefits; discounts, promotional offers, and loyalty programmes.

Additional savings can be realised simply by raising the profile of the business, and the employer brand. Every candidate who approaches the company directly – rather than through a recruitment or search agency – saves the agent’s fee. A successfully executed employer brand drives significantly higher volumes of direct applications, reducing the annual recruitment bill.

It’s not all about recruitment

Despite the extensive recruitment-related gains, employer branding is not solely recruitment-focused – there are many benefits to applying the employer brand throughout the employee lifecycle. A strong employer brand reduces attrition, ensuring that the organisation’s best and brightest talent remains in place, creating competitive advantage. There is a monetary saving as well – reduced attrition means lower recruitment costs, and hiring manager, HR and recruiter time savings.

Perhaps the most important part of consumer branding to be brought to employer branding, and to HR as a whole, is being able to demonstrate the benefits of these programmes in real dollar savings or dollar revenues. By speaking the language of the decision-makers – money – HR stands a far greater chance of having these initiatives accepted and signed off.

*totaljobs.co.uk research in 2008

Martin Cerullo

Director of resourcing communications

Alexander Mann Solutions

www.alexandermannsolutions.com