Harvard Study: Companies with Better Employer Brands Pay Less

Post by
Phil Strazzulla
March 6, 2019

For the most part, you get what you pay for in life.  As an employee, it's no different.  As someone who works at a company, you can essentially "pay" for a better job by accepting a lower salary.

To you, better might mean hours, or security, or the chance to move up quickly.  Whatever the case may be, it's certainly true that many of the most sought after employers are able to pay a discount to their competitors in terms of salary, because they are compensating their employees in other ways they care about.

HBR came out with an interesting study a while back that showed companies with strong employer brands pay 10% less to their employees.  Think about all the new salary you're going to add this year, and take 10% off the top.  That is huge!

Glassdoor has a corroborating study that showed employees need a much smaller raise when switching jobs from companies that have higher star ratings.  They found that employees need a pay raise greater than 55% for companies that have bad reviews, versus 35% for employers that have good reviews.

We've written extensively on how a strong employer brand can help with your D&I initiatives, attract more employees faster, and of course increase your retention.  But, it's also interesting to note that just like a strong consumer brand can help you charge customers more (Apple), a strong employer brand can help you save money on salaries.