Calculate the ROI on your Employer Brand

One of the biggest obstacles to embarking on an EVP or Employer Brand initiative is being able to show the ROI, or justify the spend in support of long-term goals when the money can be used to more immediate-impact type of projects.
But we’ve all heard the statistics; a strong employer brand reduces cost and time per hire, while increasing positive candidate experience and retention. It can even reduce the salary you have to offer to get a yes!
So what would it look like if we applied those numbers to create a formula to show just how critical this is? I’ll use averages for illustration, but also developed a calculator for you that will do all the work (and send you a nicely formatted PDF with the results that you can take to your next budget meeting!).
Let’s start with just some of the benefits that studies tell us a strong employer brand can provide:
10% lower salary required for candidates to accept an offer
50% reduction in cost per hire
Now let’s look at where those numbers generally sit:
Turnover: 18%
Average salary: $45,000/year
Cost per hire: $4,129
And what does this turnover cost? Consensus rests around a third of the salary of the lost worker.
So let’s look at a hypothetical example of a company with 1,000 employees with average metrics looking to growing at a modest 5% annually.
Now, what if they had a strong employer brand?
In just one year, a strong brand vs average numbers for this company with just 1,000 people would save $1.3 million.
$1.3 MILLION EVERY YEAR.
Now imagine what that could be for your organization. Now stop imagining and actually get the number! I know this calculator has some limitations. It doesn’t take into consideration the current state of your brand, first and foremost. But what is does is put a number to the impact your employer brand can have on your bottom line, which is something I know that I and many others have struggled with communicating when it comes to being prioritized in budgeting and supported initiatives. Now you can bring research-backed data to the table. It drives a different kind of conversation, and will certainly open some people’s eyes to the value of your employer branding work in a way they haven’t considered before, helping to move projects from “nice-to-have” to “mission-critical”.
Helpful? Interesting? Ideas on how to improve? Comment below or send me a note!
