These results indicate how important a good reputation is for a company. The survey, which was sponsored by Cielo, encompassed a poll of more than 1,000 employed and unemployed Americans in the effort to gain insights into how corporate responsibility, reputation and transparency can impact job decisions.
“The results of this year’s survey again demonstrated the implications of a bad reputation. Talent is often unwilling to consider an employment offer, and when they do, it’s for a premium over what companies with a good reputation can offer,” Elliot Clark, CEO of Corporate Responsibility Magazine, the forum host, said. “At the COMMIT!Forum, we call on business and sustainability leaders to share their insights on how to improve the role of business in society and how corporate responsibility and sustainability improve asset values.”
Cielo agrees that reputations are important in business.
“Individuals want to work for organizations with a positive reputation and ethical c-suite leadership,” Jill Schwieters, president of Cielo Healthcare, said. “The research demonstrates that a bad reputation could cost real money by increasing recruiting costs as organizations perceived as unethical struggle to successfully recruit women and Millennials.”
The Effects of Bad Corporate Reputations
According to respondents, the bad behaviors most harmful to a company’s culture and reputation include public exposure of criminal acts (33 percent); failure to recall defective products (30 percent); public disclosure of workplace discrimination (23 percent); and public disclosure of environmental scandal (15 percent).
Of the employed Americans surveyed, only 67 percent would take a job with a company that had a bad reputation if they were offered more money. In 2014, 70 percent of respondents were willing to take a job with a company with a bad reputation for more money. Of the 2015 respondents, 46 percent would need a pay increase of 50 percent or more to consider moving to a company with an unfavorable reputation.
Surprisingly, young people (18-34 year age range) are the least concerned about corporate reputation. Over three-quarters (77 percent) would take a job with a company with a bad reputation vs. 61 percent of those 35 years and older.
The Effects of Good Corporate Reputations
In contrast, the vast majority, 92 percent, would consider leaving their current jobs if offered another role with a company that had an excellent corporate reputation.
Forty five percent of 35-44 year olds would leave their current job for less than a 10 percent pay increase to join an excellent company. In contrast, only 12 percent of the same group would leave their current job for less than a ten percent pay increase to join a company with a bad reputation.
How Reputation Affects Costs
While recruiting expense increases are in the millions of dollars, this great expense is dwarfed by the billions of salary cost differential. The cost of recruiting and salaries added to any expenses associated with a reputation damaged by discriminatory practices or environmental scandal, in particular, can be disastrous to a company’s bottom line, according to the survey’s implications.
Conversely, companies with good reputations enjoy greater consideration among potential candidates, far lower costs to hire those candidates and potentially greater retention among employees.
Organizations suffering from a damaged reputation should expect greater costs and more difficulty in attracting and retaining talent compared with their competitors that have strong reputations.
This report presents the findings of a telephone survey conducted among two national probability samples, which, when combined, consists of 1,012 adults, 488 men and 524 women, 18 years of age and older, living in the continental United States. Interviewing for this CARAVAN® Survey was completed on September 24-27, 2015; 512 interviews were conducted from the landline sample and 500 interviews from the cell phone sample.