The Value of Reputation…A Five Part Series from ReputationUs.
Your company’s reputation is not merely a reflection of your public image, but a tangible asset with measurable impact on the most essential aspects of your operations. This five-part series delves into the key areas where the concrete value of managing your reputation has clear business and financial benefits. In this final article of our series, we consider the value of STAFF RETENTION on your reputation.
Stabilizing The Workforce
A stable workforce contributes to the development of trust and credibility, both internally and externally. This supports your good reputation and signals to stakeholders that your company is a desirable employer and a reliable business partner. Conversely, high turnover rates can signal instability and internal issues within a company, leading to negative perceptions among consumers and investors alike.
Employees who feel valued and secure in their positions are more likely to exhibit higher levels of job satisfaction and commitment, leading to increased productivity and quality of work. As well, an employee’s voice is three times more credible than the CEO’s when it comes to talking about working conditions in that company, according to Glassdoor reports.
It’s clear that retaining staff supports your good reputation. But retention can also bring bottom-line benefits that shine a light on the value of having a solid reputation management plan. Consider these three aspects:
- Reputation supports consumer purchasing decisions and investor trust.
Prioritizing staff retention not only fosters a positive internal culture, but also safeguards the company’s reputation in the eyes of consumers. According to a 2022 survey by Lending Tree, one in four Americans is currently boycotting a company, with 34 percent of boycotters pointing to how a company treats its employees. A survey conducted by Bain & Company for its 2023 CEO Stability Guide found that a third of Gen Z consumers say they would boycott a brand with bad labor practices.
When it comes to investors, companies that make the Fortune 100 Best Companies to Work For List consistently outperform the market by a factor of 3.36, according to FTSE Russell, the global index and data provider.
Likewise, a study published in the Journal of Financial Economics in 2019 found that companies that experience improvements in Glassdoor ratings (as posted by employees) outperform those with declines in the following quarter.
- A solid reputation reduces the cost of turnover.
Employee turnover is financially burdensome and can be detrimental to your company’s reputation. According to Glassdoor recruiting statistics, a strong employer brand can reduce the cost-per-hire by as much as 50 percent, while a negative reputation can cost a company as much as 10 percent more per hire.
The cost of replacing an employee can range from 30 percent to 60 percent of their annual salary for entry-level positions; up to 150 percent for mid-level positions; and up to 400 percent for a high-level or specialized position, according to and employee retention report by staffing agency MGR Workforce. These expenses encompass recruitment, training, decreased productivity during the transition period and the potential impact on customer satisfaction.
How much does this amount to? Gartner research from their 2018 annual turnover survey shows employee turnover can cost anywhere from $33,000 (for a company with 10 employees or less) to $1.7 billion (for companies with more than 500.000 employees). These figures further underscore the tangible financial impact of maintaining your employees and your positive image.
- A strong reputation supports recruitment efforts and your ability to attract top talent.
According to Glassdoor, 86 percent of employees and job seekers research company reviews and ratings to decide where to apply for a job. More importantly, 92 percent of people would consider changing jobs if offered a role with a company with an excellent corporate reputation. And half of candidates say they wouldn’t work for a company with a bad reputation, even for a pay increase.
Considering, as career expert company Zippia reports, “All companies, regardless of size, receive over 20 percent of their hires from referrals,” the importance of employee retention and solid reputation management is paramount in not only keeping employees, but bringing in new ones.”
The interconnection between your staff and your good reputation cannot be separated. A positive work environment translates into better customer experiences, as satisfied employees are generally more inclined to deliver exceptional service and uphold your company’s values.
ReputationUs can support your company by conducting an internal reputation assessment using surveys and a variety of assessments. Gauging your employees’ thoughts about your company can help you understand how internal perceptions may be impacting your external reputation — and your bottom line…Contact@ReputationUs.com
- To review Part One of our “Value of Reputation Management” series, highlighting the FINANCIAL BENEFITS of managing your reputation, click here.
- To review Part Two of our series discussing the value of MITIGATING RISKS to your corporate reputation, click here.
- To review Part Three of our series exploring the valuable connection between SOCIAL MEDIA INFLUENCERS and the reputation of your brand, click here.
- To review Part Four of our series exploring how CUSTOMER LOYALTY and RETENTION affect your reputation, click here.
