5 reasons why it makes sense to invest in employer branding

How investing in long-term employer branding activities pays off

The purpose of employer branding is to market yourself as an attractive employer, get early-stage access to promising candidates and also retain employees in the long-term. A well-planned employer branding strategy which leads to a strong employer brand is inevitable for companies which are planning to hire in Germany. Here are five reasons why employer branding matters.

1. Don’t underestimate the skill shortage in Germany

Hiring in Germany can be a troublesome issue. The war for talents resulting from the current shortage of skilled workforce in Germany makes it increasingly difficult for companies to find qualified employees. The labour market is highly competitive in fields as IT and engineering. Especially small and medium-sized enterprises (SMEs) have trouble to compete for the best talents, especially against larger competitors. They perceive the lack of suitable candidates as a risk to their business activities.

This situation might be unusual to international companies and investors who are new to Germany. However, looking at the situation on the German labour market, the fact that the skill gap can become a major risk for companies in Germany should not be underestimated. A recent survey conducted by meetra, the Federation of Indian Chambers of Commerce and Industry (FICCI) and the German Indian Start-up Exchange Program (GINSEP), among Indian companies in Germany, shows similar results (click here to see the survey results): 40% of the participants named recruitment as one of their top challenges while setting up a business in Germany. In addition, 48% of the participants experienced obstacles in terms of recruitment in the set-up phase out of which many stated that the lack of talent and the differences in the way recruitment is done were underestimated during the planning phase.

Source: “Challenges and potential of doing business for Indian companies in Germany. Survey results 2019.”

2. Stay ahead of the game: Attract the best talent, not just any talent

The development and performance of a company can only be as successful as the employees who work for it. Companies who have a strong pull factor attract talented candidates who help in taking the business to the next level. Among other factors, the quality of applicants you get depends on your visibility as an employer. For instance, you will be able to attract more talented (local) graduates if you connect to them while they are still students. Such long-term recruiting approaches provide the company with a constant stream of best talents, save time in recruitment processes and help to close job openings faster.

3. Less dependence on headhunters

In order to source candidates, especially highly skilled ones with a specific expertise or on a senior level, it can be helpful to make use of a headhunter. Headhunters mostly work on a commission basis and charge a percentage of the employee’s yearly income as a reward for successful placement. The more senior the position, the higher the paid commission – a cost-intensive game in the long run. In addition, the search for workforce to fill junior positions is less lucrative and often not covered by recruitment agents. Employer branding reduces your dependence on headhunters and can build a more cost-effective access to talent. Employers which are already well-known in Germany give us good examples of how using effective marketing measures, referral programs or cooperations with strategic partners to position themselves as prominent employers. For them it does not take long to find good applicants. This minimises the amount of money and effort spent on active recruiting.

4. Lower turnover rates and faster hiring processes will save you a lot of money

Successful employer branding is the result of continuous commitment. If you are expecting high growth in the upcoming years, employer branding measures can save you a lot of money and help you gain an advantage over your competitors in the long run. However, it is important to keep in mind that employer branding does not pay off immediately and that it takes time to see the returns. Months or even a year or two can pass until you see the results of successful employer branding. Be patient, keep on going and keep your management board up to date on your progress. With good employer branding, the number and quality of applicants will increase and you will benefit from shorter vacancy periods and lower costs per hire. Furthermore, internal employer branding helps you to bind employees and reduces the risk of them from leaving. This way you can make sure that your most valued employees are not being poached and carry away valuable know-how and information.

5. Positive impact on customer marketing and localisation

Employer branding does not only pay off on the talent side but also increases visibility and credibility among potential customers. External employer branding provides a positive experience for prospective employees, but also for potential clients. In this way employer branding does not only help with your recruitment, but also with your product marketing. When a company invests in the sharing of know-how or joint projects it gets access to new networks and can open new sales channels or showcase these projects as an example of good work during acquisition processes. For this reason especially university and research collaborations are a very attractive approach to employer branding.

When and for which companies does it make sense to invest in employer branding?

Employer branding activities pay off for companies which have a long-term perspective and are entering a growth stage or are in a phase where they expect to have a continuous need of new recruits. Especially companies which are looking out to hire IT talents or talents from other highly sought after fields need a strong pull factor in order to be able to compete with other employers on the market and attract good candidates out of a scarce pool. These activities need to be designed carefully in accordance with the companies HR needs, profile, location and sector.