Do you know who’s checking out your company on Glassdoor? The answer might surprise you. It’s not just job seekers who are paying attention to your reviews and ratings. Your customers, partners, competitors and even investors all reference Glassdoor when deciding whether to work or do business with you.
In fact, hedge funds and private equity firms regularly tap Glassdoor for investment tips. For example, analysts at Bank of America Merrill Lynch issue research notes examining company ratings and chief executive approval ratings on Glassdoor, which they describe as qualitative research.
And for Salesforce, which recently ranked among our Best Places to Work, Glassdoor is a sort of soothsayer of success.
According to a presentation leaked in emails from board member Colin Powell, the company seriously considers employee sentiment on Glassdoor when hunting for new companies to acquire. While a deal may look good on paper, positive or negative employee feedback can make or break a potential buyout worth billions.
When doing due diligence on Glassdoor, investors want to get the big picture of what it’s really like at your company, including whether employees feel business is looking up, or perhaps going through a rough patch. They take a close look at your CEO ratings, employee reviews, and, importantly, your reputation and culture.
Research shows that people’s willingness to buy, recommend, work for, and invest in a company is driven 60% by their perceptions of the company or its reputation and only 40% by their perceptions of an organization’s products or services. (1)<
“Alternative Data” for investors
Under Armour recently announced a second straight quarter of losses, which caused their shares to dive almost 9%. While many investors were gobsmacked by the dismal news, clues of the sportswear giant’s slump could be found online, such as on their sparse job listings page, or in the uneven CEO ratings posted by employees on Glassdoor.
From employee sentiment on Glassdoor to geolocation details and consumer trends, this burgeoning “alternative data” offers new investment insights not gleaned from traditional sources, like earning reports.
In fact, a group of enterprising digital gurus known as “alternative data vendors” compile this information and sell it to investment groups desperate for a competitive edge. Some say this valuable intelligence will have a profound impact on the money management industry.
But it’s not only investors who rely on Glassdoor for a ‘peek behind the curtain’. CEOs are increasingly paying attention to their employees’ online reviews to spot successes and areas for improvement. Many CEOs receive an alert every time a new company review is added to Glassdoor, while more and more are choosing to respond to reviews themselves to show they’re listening.
In the last three years, Spencer Rascoff, CEO of real-estate website Zillow Group Inc., has personally responded to 70 reviews on Glassdoor, where his approval rate is 95%.
“Getting caught up on recent @Glassdoor employee reviews of @zillow,” he tweeted last fall, adding: “Reviews were almost all good lately. But a few things we need to work on.”
The link between employee satisfaction and shareholder value
You might think that the stock market has always assumed companies with happy employees perform better, and in turn are good places to invest, right? Not so fast. Traditionally, old school theories from the early 20th century failed to consider job satisfaction as a key asset when measuring a company’s value, focusing instead on factors like mass production and cost efficiency.
However, as the role of employees has evolved dramatically over the last century, with the focus shifting to quality and innovation, employees – and their happiness – are now proven to be critical to an organization’s shareholder value and success.
In fact, from 2009 to 2014, companies onGlassdoor’s “Best Places to Work” list broadly outperformed the S&P 500, as well as the overall market by 115.6%. What’s more, being named a Best Place to Work leads to a roughly .75% jump in stock returns during the ten days after the announcement – a small but statistically significant effect. (2)
A similar portfolio of Fortune’s 100 “Best Companies to Work For” companies outperformed the S&P 500 by 84.2%. (3) These organizations also generated up to 4% higher stock returns than their peers from 1984–2011, making them smart places to invest. (4)
Our Best Places to Work award relies solely on input from employees who anonymously submit a company review on Glassdoor. In 2017, more than 2.1 million company reviews were submitted. Employees are asked to share their opinion on some of the best reasons to work for their employer (pros), any downsides (cons), and are encouraged to provide advice to management.
Employees also rate how satisfied they are with their employer overall, their CEO, and key workplace attributes like career opportunities, compensation and benefits, culture and values, senior management and work-life balance.
Given that companies on both Glassdoor and Fortune’s Best Places to Work lists outperformed competitors, it’s clear that job satisfaction, which has been proven to improve productivity, employee engagement, retention, recruitment, employer brand recognition and reputation, is also beneficial for shareholder value. (5)
So, now that we’ve established thepositive relationship between job satisfaction and shareholder value, you may be wondering exactly how you can leverage Glassdoor to attract the attention of investors.
Attracting the attention of investors on Glassdoor
Reviews are a valuable tool for investors, who take employee sentiment seriously when evaluating your company. Research shows that 84% of people trust online reviews as much as personal recommendations. (6)
Encouraging employees to contribute company reviews to Glassdoor is a fantastic way to get them engaged. It also proves that you value their feedback and are listening – all great steps toward building a thriving workplace and company culture, which are attractive attributes not only to job seekers, but investors too. Both positive and negative feedback is what drives change, and helps people and organizations grow and improve.
Responding to reviews (the good and the bad)
But what happens when your reviews are less than glowing? Does this mean investors will look elsewhere for business opportunities? Not necessarily. The trick is transparency.
Feedback is a two-way street, providing you with the opportunity to respond and shape your company’s reputation. The more responsive you are to reviews, the better for your organization. In fact, nearly two-thirds of people’s perceptions of a company improve after seeing an employer respond to reviews – both positive and negative. (7)
As discussed before, investors are also looking at where your CEO ranks in approval ratings. The average CEO approval rate in the USis 67%. (8) When rating their CEO, employees are asked to report whether they approve, disapprove or are neutral about the job their CEO is doing.
CEO approval ratings directly correlate to overall employee satisfaction and trust in senior leadership, which drives long-term employee engagement, ultimately boosting an employer’s recruiting and retention efforts – all good things for your bottom line.
Glassdoor company profile
Every month, 45 million people worldwide visit Glassdoor, making it the ideal platform for telling your company’s story and capturing the attention of investors. With your Glassdoor profile, you can fine-tune your reputation and build a strong employer brand with features such as customized branded content, company photos and videos, and social media integration.
And to stand out from the crowd and stay ahead of the competition, you can monitor your peers’ ratings, reviews and salary information.
Each year, Glassdoor offers three marquee awards celebrating outstanding employers and leaders throughout the world.
The Employees' Choice Awards, based entirely on employee feedback, recognize the Best Places to Work and Highest Rated CEOs. The Candidates’ Choice Awards, based entirely on candidate feedback, honor the Best Places to Interview.
Leading CEOs tell us the Glassdoor Employees’ Choice Award is one of the highest honors they can receive because it truly reflects employee opinion about the job they do every day. So be sure to encourage your employees to contribute reviews to Glassdoor, so that your company can get in the running next year. Not only is it a tremendous achievement, it’s also guaranteed to catapult you onto investors’ radar as a company to watch.