Study Finds Millennial, Generation Z Workers Will Give Damaged Brands a Chance

Be proactive in combatting a bad reputation anyway, experts say

Roy Maurer By Roy Maurer December 15, 2017
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New research counters conventional thinking and finds that younger job seekers are the age group least concerned about employer brand when it comes to working for companies with damaged reputations.

A survey of 578 people conducted by HR media company HRO Today and global recruitment firm Cielo revealed that 73 percent of Millennial and Generation Z workers are willing to leave their current job for a position at a company with a bad reputation, compared to less than 60 percent of Generation X or Baby Boomer employees.

Overall, nearly all respondents across age groups said they would change jobs for an opportunity at an employer with a good reputation. But older workers are less likely to leave their job to join a company with a tarnished brand—62 percent of workers ages 35-44 said they would not change jobs in that case, followed by 59 percent of workers ages 45-54, and 52 percent of workers ages 55-64.

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Some companies with challenged reputations, like Uber or Amazon, are still considered exciting places to work because of the technology or products they're advancing, or for the flexibility and advancement opportunities they offer. "The younger generation doesn't know as much about working as more-tenured employees, and maybe they just don't care as much in the beginning of their careers," said Angie Verros, CEO and founder of Vaia Talent, a recruitment consulting firm based in Chicago. "People coming out of college may think 'Hey, there has been a scandal, but the company is known for great perks, an exciting culture or work/life balance. How bad can the company really be?' "

Millennials are able to separate their personal brand from their employer's professional brand, said Michail Takach, director of Cielo's employer brand practice group. "Because of their comfort with that separation, they can consider one employer brand from multiple angles, accepting both the ugly flaws and the gorgeous facets, without rejecting the whole company."

Younger workers are also more willing to job hop. "When you're younger, you're more nimble and agile," Verros said. "You don't have as much holding you back. If a company is not the right fit, you can try somewhere else. People who have been in the workforce longer will probably not want to leave because of where they are in their careers at that time."

The response from younger workers notwithstanding, organizations suffering from damaged brands should expect greater costs and increased difficulty in attracting and retaining talent than competitors with strong reputations.

On average, respondents would require a pay increase of 58 percent to leave their current employer and take a job with a company with a bad reputation. Forty-two percent would require a pay increase of 50 percent or more.

A bad reputation affects more than just the cost of recruiting. If the company they were working for is tainted by scandal, over three-quarters (77 percent) of respondents indicated that they would look for a new job. Further, over one-half (52 percent) would start looking immediately, defined as less than 30 days, resulting in a potential companywide talent drain that would severely impact an organization's ability to compete and meet business goals.

The public exposure of criminal acts is the type of scandal that is most harmful to a company's culture and reputation, according to 41 percent of respondents, followed by the failure to recall defective products (24 percent) and public disclosure of workplace discrimination (23 percent).

Be Proactive When Managing Your Reputation

In addition to working to correct the practices or culture that lead to bad reputations, a strong offense is a good defense, experts said.

"A proactive employer brand strategy helps companies realize superior talent outcomes, such as quality of hire, time-to-hire and increased referrals," Takach said. "All of these have a real financial impact: cost-savings on agency fees, faster time to productivity, increased business performance and more."

One-third of job seekers reported having shared at least one negative review of a previous or prospective employer, according to a 2017 survey of 438 people conducted by CareerArc, an HR technology company focused on social recruiting and outplacement, in partnership with research firm Future Workplace. Those who write negative online reviews are also 66 percent more likely to spread those opinions on social media, compared to those who only convey their opinions directly with a friend or colleague. Yet, 86 percent of 616 employers think negative online ratings are unfair, and 55 percent neither monitor nor address negative comments on social media and review sites, according to the CareerArc study.

There may be justification for senior leaders not responding: Respondents said current employees are the most trusted source for information about a company and CEOs and other company executives are the least trusted.

"Candidates now shop for jobs the same way they shop online, with sites like Glassdoor and Indeed among their first reference points," Takach said. "Employers no longer control what's being said about the employee experience, nor can they hide from the conversation. The best thing an HR department can do is engage with negative online reviews."

Verros added that responding to employer reviews doesn't mean trying to cover up the damages.

"That will make things worse," she said. "Show the good with the bad in full transparency. Explain how the company is overcoming the problem. The most important thing is being authentic."

Takach said that successful brands today aren't just reacting to negative reviews, they're assembling smart reputation management strategies that combine humility, transparency and accountability. "HR teams are encouraging employees to write reviews that tell the true story of the brand," he said. "They've claimed their pages on these platforms and created digital experiences that build trust and credibility. They're learning from negative posts, rather than silencing them. They're publishing positive cultural content—photos, videos, testimonials that balance out the negative noise."

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