Companies Need to Invest in Employer Branding to Win the Supply Chain Recruitment Wars

Industry experts predict that the procurement and supply chain job market will undergo critical shortages of skilled professionals as experienced staff retire, particularly at the middle-management level, and demand to fill their roles increases. A survey by supply chain trade association MHI and Deloitte of supply chain executives found that more than 65 percent of survey participants indicated that process, technology and skillset gaps exist within their company – this as the supply chain field is expected to add 1.4 million new jobs by 2018.

The business impact may be both far-reaching and long-lasting. According to the Accenture 2013 Skills and Employment Trends Survey, among companies currently facing or anticipating a skills shortage, 66 percent anticipate a loss of business to competitors, 64 percent face a loss of revenue, 59 percent face eroding customer satisfaction and 53 percent say they will face a delay in developing new products or services. As further evidence, the MHI/Deloitte survey found that supply chain executives want to invest in new technologies and business innovations but are hampered by a shortage of talent.

In an area where cost-cutting has always been priority-one and employee turnover hovers at 15% or more, investing in an employer branding program can not only help a company attract supply chain candidates with the right skillset, but also save money and reduce turnover.

A recent LinkedIn survey of 2,250 corporate recruiters in the United States studied time-to-hire, cost-per-hire metrics, and, most importantly, the impact of a strong employer brand. The survey showed that companies with strong employer brands enjoy significant cost savings due to lower cost-per-hire and employee turnover rates. In fact, the survey found that cost-per-hire is more than two times lower for companies with strong employer brands. Furthermore, companies with stronger employer brands have 28% lower turnover rates than companies with weaker employer brands. Considering that businesses spend about one-fifth of an employee’s annual salary to replace that worker, lower rates of turnover equals big cost savings over time.

Clearly, as demand for skilled supply chain talent exceeds supply, companies will need to compete not only on salary, but also on the attractiveness of the organization and the role of the supply chain group within it. An attractive employer brand can provide the competitive advantage that companies are looking for.

The importance of having an attractive employer brand was underscored in a 2014 survey of HR professionals, entitled “Launching a Successful Employer Brand: Building on the Practices of Top Employer Brands,” commissioned by Hudson RPO and HRO Today magazine, in which respondents were asked to identify themselves as “top employer brands” or “other employer brands.” According to the study, two-thirds (65.5%) of respondents felt that the employer brand would increase in importance in the next 12 to 24 months.

So what exactly is an employer brand? The Hudson RPO/HRO Today study defines it as the perception of the organization as a great place to work by both current and potential employees. In short, it is the organization’s reputation as an employer. An employer branding program includes strategies for enhanced talent attraction, engagement and retention to strengthen an organization’s employer brand.

Having a defined employer brand strategy appears to be a clear differentiator between top brands and other brands. The Hudson RPO/HRO Today survey found that twice as many top brand companies have a defined and documented strategy as the other brands – 32.2% versus 16.4%, respectively.

A clearly defined employer brand helps ensure that organizations hire candidates with the right skills and also those who are a solid fit with the company’s culture and work environment. Studies show that employees who are a good fit with an organization’s culture and work environment are typically more productive, more engaged and more likely to stay with a company for the long-term, which should be a boon to any employer considering the high cost of recruiting and onboarding talent.

To build, promote and communicate a strong employer brand, organizations must invest in its development. Top brands, according to the Hudson RPO/HRO Today study, have an average budget of 52.1 percent more than other brands to support their employer brand initiatives. While the dollar amount varies substantially based on company size, it still shows a high commitment to furthering the employer brand – an investment in which forward-looking manufacturing companies would be well advised to make.

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