Measuring Return on Investment of Employer Branding

“95% of job seekers’ very first experience with you comes through the ‘careers’ section of your website”, reveals Bernard Hodes Group Inc., a full service employer brand agency, which was acquired by Findly in June 2013.

This means your careers’ website or section decides who responds to the job openings with your organization. It makes a massive difference in attracting talent. In fact, it enhances or damages your reputation as an employer as well as affects your return on investment.

Employer Branding is the New Staple

It won’t be wrong saying that employer brand has become a staple for talented professionals. Therefore, organizations need to serve it to the people they want to attract. Of course, building and communicating employer brand involves a lot of planning and investment, but optimizing your approach helps save cost per hire and achieves greater return on your investment.

The most recent study in this field by Employer Branding International revealed that 39% of the companies had planned to increase their investment in employer branding initiatives in the financial year 2012/13. It was three years back; and therefore, there is no doubt that it has now increased multiple folds.

However, it’s important to consider how much value organizations receive on their investment and how much of it is wasted. Many companies may not be able to predict the return on investment at the first place. And the majority from the remaining may just don’t know how to measure ROI.

Why is it Important to Measure Return on Investment of Employer Branding ?

Before we talk about measuring return on investment done in employer branding, it’s important to understand the link between the two. Employer branding is establishing a great reputation as an employer in the eyes of previous, existing and potential employees. And like any other branding campaign, building an employer brand also incurs human intellect, man hours and money.

Whether it’s communicating on social media, developing mobile optimized websites, shooting and publishing videos, publishing print ads or maintaining careers’ section and communicating your employer brand through third party, everything requires capital. And since it involves huge investment, keeping a track on returns makes sense.

Measuring ROI of Employer Branding

Well, if you know what to measure and what tools to use, measuring return on investment of employer branding is not difficult. The difficult part is to identify what to measure and what metrics to use. According to a global study conducted by Employer Branding International, ‘retention rate’ is the most common metric used by companies around the world to measure employer branding ROI. Following are other metrics that are also used to measure ROI.

  • Retention Rate – 38%
  • Employee Engagement – 37%
  • Quality of Hire – 29%
  • Cost Per Hire – 27%
  • Number of Applicants – 26%

The real question is – which of these metrics to use to measure your ROI? Actually, it depends on your business objectives. For example, it doesn’t make any sense to use ‘number of applicants’ metrics, if you hire just few employees per year. Rather, quality of hire will make more sense. Identifying what produces best hires will play a crucial role in reallocating your investment.

Your employer brand metrics should be in line with your business objectives. Sure, you’ll be able to maximize your return on investment, if you’re able to identify employer brand drivers. The link between building an employer brand and funds is variable. The cost can be reallocated at any point of time, depending upon the results a particular channel produces. The results must be evaluated on regular basis and investment must be reallocated, in order to ensure maximum ROI.

How to Know Which Metrics to Use ?

Let’s understand this with the help of an example. Say, you’re a small ecommerce business bringing in around $500 million of revenues. You have small market share as compared to Amazon. While most professionals would want to work for Amazon, how would you compete for talent in such a scenario?

The answer is not easy to find; however, if you take a step-by-step approach, it becomes slightly easier to identify what will produce the best results for your company.

  1. It begins with the understanding of your audience. Learn about whom you want to attract and what matters to them. You, as a business leader, should be able to think like a researcher and understand how you can collect required information.

  2. Be sure to exhibit a clear differentiation between your employment experience and your competitors’.

  3. Once you know who are looking for and what matters to them, it won’t be difficult to find out where to look for them. You need to identify a channel that expands your market reach and helps meet your hiring objectives.

  4. Now you will know what you need to measure. You will measure quality of hire, as your aim is to recruit the best industry talent in a highly competitive job market. In addition, you need to find:

    • Percentage rise in the number of prospective employees
    • Increase in the level of employer brand awareness
    • Increase in your share of voice

However, this doesn’t at all mean that you don’t need to look inward. Your current employees play an equally important role in building and communicating your employer brand. You must analyze, if:

  • Your existing employees are acting as your brand ambassadors
  • They understand how you have evolved as an employer
  • They can and are willing to communicate this to the world
  • They are happily engaged

Let us take another example. Say, you’re a large business with retail stores around the continent or world. When you opt for bulk hiring, you would want to reduce cost per hire. You focus on employee referrals or search through existing database to hire employees.

Aligning Business Objectives with Employer Branding ROI Measures

It’s essential to make employer branding ROI measurement a cyclic process, in order to continuously evolve your employer brand and reallocate the funds. It’s not an annual planning; rather it’s an ongoing process needed to be repeated several times a year.

It doesn’t matter whether you are a novice or veteran in employer brand management. Below is an action plan that can be followed by beginners and veterans, startups and biggies of business world alike, to align objectives with measures to ensure maximum return:

  • Set your employer branding objectives
  • Understand your audience
  • Identify key drivers of achieving your objectives
  • Pinpoint financial and non-financial measures that will drive your employer brand value
  • Allocate responsibility for brand building activities
  • Collect and analyze data; don’t assume
  • Listen to your employees
  • Measure your performance using an appropriate metric
  • Modify your employer branding strategy and re-allocate budget, if needed

When you have a process in place, it’s possible to ensure a high degree of precision when it comes to investment. Your employer brand strategy delivers higher value.


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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.