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Employer Branding Beats Consumer Branding for Young Job-Seekers

by Aug 5, 2014, 12:29 am ET

Screen Shot 2014-07-21 at 7.31.34 AMTwo studies recently came out that provide interesting perspectives on how a brand is viewed by the general public and by young workers looking to start their careers. These surveys illustrate both the connection and disconnection between branding and employer branding.

The first study was conducted by CoreBrand, which annually surveys more than 10,000 business decision-makers from the top 20 percent of U.S. businesses. This is a survey of peers, not of average consumers. It determines two factors: Familiarity, based on whether respondents could name a brand’s verticals or subsidiaries; and Favorability, based on respondents’ opinions of the brand’s overall reputation, perception of management, and investment potential. CoreBrand considers brands with the highest scores in both categories to be the “Most Respected.” The top 10 of 2014 are:

  1. Coca-Cola
  2. PepsiCo
  3. Hershey
  4. Bayer
  5. Johnson & Johnson
  6. Harley-Davidson
  7. IBM
  8. Apple
  9. Kellogg
  10. General Electric

In short: business leaders know these brands, like them, and feel they’re well-run and have successful futures.

Collegefeed then looked at brands from the other direction, asking 15,000 Millennials (60 percent college students and 40 percent recent grads) their top three companies to work for. Respondents weren’t given a list; they could name any companies. Their top 10 are:

  1. Google
  2. Apple
  3. Facebook
  4. Microsoft
  5. Amazon
  6. eBay
  7. LinkedIn
  8. Yahoo
  9. Goldman Sachs
  10. IBM

The high number of tech companies may be due to the fact that 50 percent of Collegefeed’s respondents were in a “tech-oriented major,” or it might be reveal that more college students are studying technology to get ahead in the weak, post-recession economy.

Either way, only two companies from Collegefeed’s top 10 overlap with CoreBrand’s top 10: Apple and IBM. Coca-Cola and Pepsi, which are CoreBrand’s two “most respected” brands in the world, don’t even make Collegefeed’s top 50! Why the discrepancy? Could it have something to do with employer branding?

Indeed it does. A scan of Glassdoor’s 2014 Best Places to Work shows LinkedIn at No. 3, Facebook at No. 5, and Google at No. 8. Twitter, which just outside the top 10 of Collegefeed’s list, is No. 2 on Glassdoor. My conclusion is that a brand’s familiarity, likability, and even peer respect isn’t as compelling to young job-seekers as whether the company is a great place to work. That’s reinforced by Collegefeed’s respondents’ reasons for choosing their top employers: more than 75 percent said “people and culture fit.” Meanwhile, “company mission” scored below 45 percent and “market leadership” was below 20 percent.

As surprising as it may sound, recent college grads would rather work at an online company that treats them well than one that sells candy or soda or motorcycles.

In fact, the situation gets even more intriguing as you move down the list of Collegefeed’s most sought-after companies. “Boring” brands like Salesforce (No. 18) and Qualcomm (No. 19), which millennials rarely encounter or use, placed ahead of “cool” companies like The Walt Disney Company (No. 20) and Nike (No. 21), which millennials grew up with. Again, the answer lies in the employee experience. Qualcomm is No. 13 on the Glassdoor list, ahead of Nike (No. 29) and Disney (No. 42). Salesforce placed an amazing No. 7 on Fortune’s list of Best Companies to Work For.

Did all these college students read the lists? Probably not. But their information also came from some surprising places. “Friends” was the most-cited way that Collegefeed’s job-seekers heard about a company, with more than 70 percent of respondents putting it in their top three. Social media accounted for a third. As the CEO of Collegefeed put it, “If college students like something, they tell their friends on social media or face-to-face.” If you ask me, that’s one definition of employer branding.

Look at it another way: There are certain companies that are well known, but it’s not considered “cool” to work for them. I’m thinking of Walmart, ExxonMobil, or Bank of America. Job seekers may encounter them every day, and even use their products. And the company might have a lot of job openings that match the job-seekers’ skills. But it will take extra convincing to overcome young people’s perceptions. One way a brand is responding to this problem is WalmartLabs, the retail giant’s outreach to the tech community, which positions Walmart as an alternative to Google.​

The takeaway from all these lists and statistics: For a brand to attract top talent, it’s better to be liked by employees than by consumers, or even by other industry leaders. Hip companies like Google and Apple will always have a slight edge, but job-seekers care far more about cultural fit and career potential than about what their employer actually does — or what they pay. So if you think your “dull” company with average compensation can’t go after the best employees, think again.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  • http://www.medievalrecruiter.com/ Medieval Recruiter

    “[B]ut job-seekers care far more about cultural fit and career potential than about what their employer actually does — or what they pay.”

    Where exactly in this data was pay addressed? Even if it’s true, I wonder how dismissive of pay these millennials will be when they try to pay off their student loans with job satisfaction and cultural fit.

  • Keith D. Halperin

    @ Medieval Recruiter: well-said.
    @ Jod:. You can always GO after the best employees, but if you don’t have anything to offer them besides the deluded hype of the founders, CXOs, sr. execs, etc. and those who pander to their vanity and arrogance, you won’t be able to GET them. Use the Corporate Desirability Score (CDS, http://www.ere.net/2013/02/15/recruiting-supermodels-and-a-tool-to-help-you-do-it/) and go after the best people you really CAN get.
    Cheers,
    Keith “What Makes You Think YOUR Company Is Special?” Halperin

  • Jason Ginsburg

    I work with Jody and helped research this article.

    I think the point she was trying to make in that second-to-last sentence which mentioned pay was that, based on the two lists, as well as Glassdoor and Forbes’ “Best Workplaces,” pay wasn’t rated that highly by college graduates.

    In the Collegefeed survey — which is truly interesting and which I suggest everyone read — “compensation” was fourth on the list of what Millennials look for in employers, behind culture fit, career potential, and work/life balance.

    I hope that helps.

  • Keith D. Halperin

    ISTM that there are far more “millies” looking for *decent-paying FT jobs with benefits so they can start paying off their massive student debt than there are those in the position of deciding which organization they will work for based on “cultural fit”, “career potential” etc. You want to have a high-caliber and motivated “millie” workforce who’ll build you a temple and worship you? Offer to assume their student loan payments for as long as they work for you.
    Cheers,
    Keith

    *http://www.ere.net/2014/07/29/no-country-for-young-men-and-women/

  • http://www.medievalrecruiter.com/ Medieval Recruiter

    I appreciate the answer, Jason, but I find those surveys to be at odds with my experience, the experience of everyone I know, and actual observations of what positions people take and why, both anecdotal and in other surveys I’ve seen. More money is always among the top reasons why people leave current positions, along with bad management. And I’ve found college age people, regardless of generation, are always a bit dismissive of money because they assume it will be there, which is a natural consequence of living largely bill free for the first 18 – 20 years of their lives, and largely due to the lack of practical experience of having to make payments on the loans they used to fund those educations. In short, they are giving the answer they think they’re ‘supposed’ to give, because the practical realities of having to pay rent, service a debt, if not several, and raise a kid haven’t yet hit them.

    I firmly believe people in the Recruiting/HR professions need to stop encouraging employers to be dismissive of salary and confront the issue head on, and communicate to employers that labor is priced on a market like all other goods and services, and that they need to be prepared to pay for what they want, or to accept what they’re willing to pay for. People who are answering these surveys with the expected priorities they know people want to hear will soon find out that writing “I have a lot of job satisfaction, and I fit there really well,” on a check will not pay their rent, much less the 100K+ of debt they incurred for their BA/BS. And to be honest, persistently low salaries are one of the major objections candidates have, especially in the last several years.

    Employers are demanding the world and refusing to train, forcing candidates to have all the required skills or not even be considered, and offering rates at 25-50% below market for the given areas, and then claiming a talent shortage when in reality there is no such shortage. A shortage means you can’t find something, not that you found it but were unwilling to pay for it. And we in the Recruiting/HR profession need to start taking on this issue rather than brushing it aside or under the rug, and claiming a good cultural fit or fulfilling work will compensate or replace the need for an actual paycheck.

  • Another Recruiter

    @medievalrecruiter:disqus, totally agree with you on your post

    Employer branding has to have all that was discussed (i.e. Career potential, working environment, good management, competitive salary packages etc)

    In fact, after adopting a competitive salary matrix (which i had a hard time convincing the Mgmt to adopt, our outdated matrix was almost 30% below the market rate!), word about our salary offers spread like wildfire during campus recruitment.

    Hence, competitive salaries for top talents CAN serve as an employment branding tool too. We’re serious in attracting top talents, and we’ll pay for them.

  • http://www.medievalrecruiter.com/ Medieval Recruiter

    Yup. I’ve related previous experience where regularizing the salaries in two departments in my last job, and bringing them to market levels, significantly affected retention and recruiting efforts. put simply, turnover went through the floor and hiring became much easier once people started seeing offers that were in line with the market and their experience. Like your experience, prior to the change they were double digit percentage points below market, people were leaving for way more pay, and recruiting people was damn near impossible. Instead we got the salaries up to par, and started targeting younger/junior candidates and training them. All of a sudden, retention and hiring problems vanished, nearly overnight.

    I went into HR and recruiting with the same idea that gets pushed over and over again, that pay is secondary to job fulfillment and making sure the walls are painted a pleasing color. I learned very quickly that this was nonsense fed to executives, who essentially paid consultants to tell them what they wanted to hear, and then used that as justification for continuing poor practices. Money doesn’t just matter, at the end of the day it matters the most. All the job satisfaction in the world matters not one whit when you can’t pay basic living costs.

  • Keith D. Halperin

    Thanks again, Medieval Recruiter. Re” decent pay-
    To res0state the old saying: It’s not that enough money makes everything good, it’s that not enough money makes everything bad.”
    Also, ISTM that people who downplay the importance of compensation are either trying to justify why they don’t make enough money themselves or why other people shouldn’t make enough money (when they themselves do).

    -kh

  • Jason Ginsburg

    I hope all readers understand that Jody is not ADVOCATING that companies pay lower wages. Rather, she was analyzing data, directly from Millennials, that puts employer branding, cultural fit, and work/life balance above consumer branding and compensation.

    Whether this is a positive or a negative is for others to decide. But, according to the surveys quoted in the article, it is the truth.

  • http://www.medievalrecruiter.com/ Medieval Recruiter

    Hi Jsaon,

    That’s understood, however HR and Recruiting sites are littered with these implications, and people, including executives and hiring managers, read them and make decisions based on them, often without digging in to understand context.

    Now, according to the survey this is not “the truth,” it’s just the answer they gave that day. Ask people if they prefer X or Y, they may tell you one or the other. Require people to make a real life, discrete, non automatic, and with real life consequences decision between X and Y, with all the attendant opportunity costs of foregoing one for the other, and their actual decisions will tend to be different. An analogous concept in economics is Demonstrated Preference; values revealed through people’s actual actions as opposed to what they, or anyone else, hypothetically thinks they prefer, or should prefer. Someone may say in a survey they prefer a blue sweater to a green one. When they go to buy a sweater though they may buy green, because it roughly goes with similar colors, the store had their size, they needed it for that night, and the blue one they had also had a design on it they didn’t like. I’m sure both you and I, if given a survey, would rate curing cancer over buying lunch, but how many of your past lunch breaks have been you going to the nearest donation center as opposed to getting a salad or sandwich? I went to the deli yesterday, myself.

    When faced with a survey question there’s no opportunity cost, so it’s always ceteris paribus, and people give answers they think others want. In real world decisions people assign vastly different weights to each thing, and more immediate concerns like paying rent always end up dominating decision making over longer term goals like being more satisfied with their job.

    Actions reveal the truth, not surveys. In other words, surveys aren’t good for revealing what people actually value, they will always give the answer they think is right, not the one they will choose if they face the choice in the real world. And with persistently low salaries being one of the number one complaints of candidates, and with companies routinely low balling people and setting salary ranges ridiculously low, and with ‘more money’ consistently being one of the top reasons people leave a job, as HR and Recruiting professionals we need to be very careful about putting these kinds of statements out. This is not an aspect of our jobs we need to exacerbate and make worse by further convincing hiring managers that people don’t care about money as much as a warm, fuzzy feeling inside.