November 18, 2019
Low unemployment and rising wages currently mark the expanding United States economy. However, such conditions are ideal for high employee turnover. Even as businesses cope with this reality, online employer reputation will become increasingly viral, influencing future success in the labor market.
Disgruntled employees reduce applications
Suppose that a warehouse worker has a bad experience with his manager. He quits. He turns to Glassdoor, Indeed, or another job board to voice his frustration. Below are real Glassdoor reviews from former package handlers.
“Your direct manager and her direct manager will destroy your self esteem. They make people cry. They swear at you in front of the team. They use fear as a motivator. Everyone is leaving the team because of how toxic the work environment is… Please do not even apply for this job…”
“This particular location treats their employees just like slaves, and the mangers are horrible.”
“Nobody cares about you or your personal growth there. You have to be the person in charge. Any ‘trainings’ or ‘conferences’ are done on your own dime and managers will see all personal growth as time you could have spent doing work for them.”
Of course, these types of reviews reflect poorly on the employer in question. However, there are additional, more lasting effects.
A recent survey found that 76% of applicants closely research the job opportunity online before submitting an application. The same survey found that seven in ten employees will not work for a company that they are not proud of, and six in ten employees “give importance to an employer’s brand name” before considering an offer.
Considering that one-third of job seekers refuse to consider a company with less than three stars, online reviews evidently play an important role in hiring the best candidates. In addition to the qualitative damage levied by poor written reviews, ratings of one, two, or three stars tarnish the quantitative metrics that applicants use to judge employers.
Good employer reputation is invaluable
Conversely, positive reviews boost online employer reputation, which in turn boosts applications.
Roughly 48% of job applicants consider Glassdoor ratings when examining a position. A business with consistently good reviews will stand out from its competitors.
In addition to improving a company’s applicant pool, good online employer reviews imply higher revenue. A Harvard Business School study found that “one star’s worth of improvement leads… to an increase of between 5 and 9 percent in revenue.”
Harvard Business Review recommends several courses of action for improving employer brand. Namely, it encourages businesses to grant employees a voice, listen to suggestions, and “mind the gap” between recruitment marketing and employees’ actual experiences.
The benefits of implementing these changes are manifest—namely, through lower employee turnover. Churn costs frontline businesses thousands of dollars per employee, both through tangible and intangible costs. Over 75% of employee turnover has nothing to do with wages; rather, most hourly employees resign due to cultural factors such as low opportunity for advancement, boredom, and poor relationships with management.
Learn how Qlicket is beginning to see its customers’ Glassdoor ratings improve, and how your firm can experience similar benefits.