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A strong employer brand enhances company reputation, improves employee retention, attracts investment, and ultimately increases business valuation. People Director Catherine Wood shares her expertise on how employer branding influences financial success, mergers, and acquisitions.
Employer brand as an intangible yet powerful asset
Catherine explains that a company’s employer brand is more than just a recruitment tool. It is the perception of its culture, reliability, and quality. Unlike physical assets, you can’t buy a good reputation, it must be built (and earned) over time. If an organisation needs to improve its employer brand, it takes at least two years of consistent effort in good communication, looking after people, and building a cohesive team. For companies with a strong brand already in place, this is a huge competitive advantage.
The financial impact of a strong employer brand
A well-regarded employer brand directly affects business valuation and deal-making. Catherine worked with a large pharmaceutical company that had merged with another larger household name. It attracted multiple merger opportunities due to its existing strong brand reputation. This resulted in them being in the lucky position of being able to choose the best deal on the table. The actual merger process was straightforward and quick; there were fewer questions and revisions to the deal, due to the respect their brand commanded.
In contrast, a small telecoms company with a poor employer brand struggled during an acquisition. Negative Glassdoor reviews and health & safety concerns that were in the public domain made the buying company more demanding and aggressive in negotiations to complete the deal. Ultimately, the telecoms company had to lower its asking price due to employer brand concerns—proving that reputation has a direct financial impact. Even after the purchase the transfer of staff and onboarding process was uncomfortable as there wasn’t the respect between the two organisations.
Leadership’s role in strengthening employer brand
Employer brand isn’t just about marketing; it must be driven by leadership. Catherine highlighted companies that turned their reputations around through strategic leadership decisions.
- A few years ago, Octopus Energy took a deliberate decision to turn their reputation around by investing in its employee experience. They are now one of the most respected and award-winning companies in the UK for customer services which has increased its customer base and reputation.
- In contrast, HMRC is known for poor service (In 2023, the House of Commons Public Accounts Committee reported that average waiting times to reach HMRC were 23 minutes, with only 60% of callers managing to speak to an adviser. Notably, 44,000 customers were cut off after waiting over 70 minutes.). As a result, it reportedly struggles with poor brand perception, frequent staff strikes, and high levels of internal fraud— leading to low employee engagement and a negative public image.
Leadership plays a crucial role in embedding an employer brand that employees believe in. One family-owned business that Catherine worked with has a deeply loyal workforce because the directors are committed to looking after their people. This emotional connection has created a desire to perform through a strong employer brand without needing traditional branding efforts.
Measuring a strong employer brand – The key indicators
It is hard to apply numerical metrics to employer branding, but this is where a skilled People Director can use their experience and expertise to assess and report on the following:
Brand visibility: Is the company name recognised and positively perceived?
Company values & vision: Can employees clearly articulate them?
Customer & employee feedback: What do reviews and ratings say?
Marketing & internal culture alignment: Does the external reputation match the internal experience?
The high cost of a weak employer brand
Catherine warns that arrogance is one of the biggest mistakes companies make when it comes to employer branding. She recalls the infamous Gerald Ratner scandal, where the CEO’s dismissive comments about his products destroyed trust in the brand, leading to financial collapse.
Ignoring employer brand can also make companies unattractive to investors. Companies like Woolworths and Homebase ultimately collapsed due to poor business decisions that eroded public trust.
Employer brand’s role in investment & M&A decisions
The impact of employer brand on a company’s ability to attract potential buyers is huge. A company with a strong employer brand is seen as a safer bet and therefore more attractive to investors. When an employer brand is respected:
- The company receives more interest and can pick and choose the best investors.
- It can negotiate a better deal because of its perceived stability.
- Investors are more confident in the long-term success of the business.
The impact of remote & hybrid work on a strong employer brand
Hybrid work has the potential to weaken team cohesion if not managed properly. Without structured check-ins and in-person team events, employees can feel disconnected, leading to a weaker employer brand. Companies must be intentional in maintaining culture across remote teams.
Employer brand is a business multiplier
A strong employer brand isn’t just an HR initiative or a marketing gimmick; it’s a strategic business asset that impacts valuation, investment opportunities, and long-term success. Business leaders who undervalue employer brand are taking unnecessary financial and reputational risks. Your employer brand is a reflection of the company’s future.
Why would you take a risk with your business and not ensure that it stands out?
