Why A Company’s Reputation Matters, Even In A Bad Economy

Message to employers: job seekers care about a company’s reputation even in a down economy. At least according to a new survey by Corporate Responsibility (CR) Magazine and Allegis Talent2, the recruitment management company.

Seeking to understand the role corporate reputation plays in people’s employment decisions, the two polled 1,032 Americans across the country to see if they would be willing to work for a company with a bad reputation even if they were unemployed. The result: a resounding 75% said they wouldn’t.

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“Even those that don’t have a job still want a job where they can look themselves in the mirror and know they are doing good,” says Richard Crespin, the chairman of the COMMIT!Forum, a Corporate Responsibility Magazine conference.

So what constitutes bad behavior on the part of the company? According to the survey question, the bad reputation was born out of the CEO engaging in a criminal act or the company doing something damaging to the environment.

Of the people surveyed who were currently employed, 58% said they would work at a company with a bad reputation, but it comes at a hefty price tag for the employer. According to the survey, 25% said it would take more than a 50% pay raise, while 15% of respondents said their salary would have to more than double in order to work for the company with the bad reputation.

On the flip side, 87% of survey respondents would be open to leaving their current job if they were offered a gig at a company that has an excellent reputation. The survey found that most respondents would only need a 1% to 10% pay raise to switch jobs.

“The cost of recruiting and retention is higher for companies that have a bad reputation,” says Crespin. “We often see in the wake of a scandal employees leave and it’s harder for the company to retain them.”

While the newspapers are swamped with CEOs gone bad, are job seekers willing to forgive and forget? According to Crespin if the company improves its reputation, job seekers will eventually want to work there again. Take Tyco International as an example. Who doesn’t remember former CEO Dennis Kozlowski’s freewheeling spending that landed him in jail. The company’s reputation took a huge hit as a result, but Crespin says now Tyco is on the rise.

“A positive corporate reputation is extremely high on the list of must-haves for the American workforce, especially as they examine career paths or future employment opportunities,” added Randolph Gulian, Executive Vice President/General Manager, AllegisTalent2 in a press release announcing the results of the survey. “Today’s chief executives at companies across the globe, regardless of size, continue to put more energy and resources behind the improvement of their corporate responsibility and sustainability programs. More than ever, they understand that these efforts trickle down to sales, save money and improve asset values.”

Since reputation does matter, job seekers need to be more diligent in researching the companies they apply for jobs at. Websites like Glassdoor can give job seekers a plethora of information on the company’s culture and history. Doing a Google search will also yield a ton of information especially if the company was recently in the news for bad behavior. In addition to that, Crespin says job seekers have to look at the company’s responsibility report and look at how the company spends its money in the supply chain. For instance, if the environment matters to you, do they constantly purchase products and services with an eye toward being green.

“You have to look to see if the values match with your values,” says Crespin. “A values match dictates whether or not you’ll be a long term hire.”