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Employer Attractiveness

Employer attractiveness is understood as an organization’s power to attract applicants for positions to be filled and to retain key employees. As a result, a distinction must be made between external and internal employer attractiveness. The factors that make a company appear interesting to potential employees generate external employer attractiveness. Factors that promote the loyalty of existing employees are elements of internal employer attractiveness.

External Employer Attractiveness

In an online survey in early 2022 by Randstad Employer Brand Research of 3,727 employees and job seekers aged 18 – 65 in Germany, respondents were asked about the five most important factors to them. The results, with comparable results from 2016 and 2101, are indicated below.

The 5 most important factors to choose an employer

The change over time shows that while there are minor shifts in rank, partly caused by the COVID pandemic, the top 5 attractiveness factors remain the same.

Other surveys show the same five attractiveness factors as most important. For example, the opinion research institute Innofact AG conducted in May 2019 an online survey of 1,006 employees as well as apprentices and students representative for the German population. The survey produced the following ranking: Employer factors students and apprentices Employer factors for students and apprentices

Attractive employers for career starters

In 2015 https://berufsstart.de investigated which characteristics companies should have to be perceived as an attractive employer by students, including graduates as well as young professionals.

In that study, in addition to the so-called hard, primary factors, the soft characteristics – the secondary features for the popularity of employers were determined for the first time. It was found that among the hard factors, opportunities for further training (88%) and opportunities for promotion (79.5%) enjoy the highest priority when choosing a suitable employer. For three quarters of all participants, the image of a company is the third most important factor. International orientation and job security are also given high priority.

Social benefits and infrastructure are rated by career starters as rather insignificant for employer attractiveness. Among the desired secondary features, the working atmosphere was considered with 91.2% the most important “soft” factor for the attractiveness of companies. Working atmosphere is always an essential basis for employee satisfaction and collegial cooperation. Varied activities (76.7%) as well as work-life balance and responsibility were almost equally important. For one-third of the career starters, family friendliness was a key reason for preferring a company. Less important for the choice of company were “flat hierarchies, benefits and leisure activities”.

Source (22.05.2022): https://zvoove.com/blog/was-bewerber-bei-unternehmen-schaetzen-die-attraktivsten-arbeitgeber-2015-studie-berufsstart-de

Main factors for employee recruitment

From the rankings and assessment priorities shown, a catalog of the ten most important aspects of external employer attractiveness can be derived. Without claiming to be exhaustive, the catalog is structured here according to the dimensions of AMPLE:

Working conditions

1. 1. Leadership behavior and processes
  2. Promotion and career opportunities
  3. Acceptable workload / flexible working hours
  4. Work-life balance, family and career
  5. Attractive location (commuting, buildings)

Profitability and Liquidity

6. Competitive compensation and benefits

7. Profitability and financial stability of the company

Evolution

8. Challenging employment, further training opportunities

Market position

9. Good products and services of the company

10. Good reputation of the employer

It is thus understandable that job offers (print or electronic media) should include information on these 10 attractiveness factors. Interested parties should be encouraged to ask more in-depth questions about these factors during interviews. The relevant documentation will probably mostly be prepared by the HR-department, but the points mentioned should also be addressed in the direct discussions between applicants and future superiors.

Internal Employer Attractiveness

It pays to do more for your own attractiveness as an employer!

The Institute for Leadership and Human Resource Management (IFPM) at the University of St. Gallen / Switzerland conducted extensive surveys and studies on internal employer attractiveness in 2015 and 2021 (this Top Job Trend Study can be downloaded at Trendstudie Arbeitgeberattraktivität (topjob.de). In 2021, 13,400 employees from about 100 companies of various industries and sizes were surveyed, 61% of whom were male. 20% of respondents were managers. 92% of the respondents were born between 1950 and 1996 (Baby Boomer, X and Y generations).

Qualitative comparisons between companies with high and low measured employer attractiveness were obtained by interviewing the executives. It was found that the group of companies with high employer attractiveness scored around a quarter better in terms of sales growth and employee innovation ideas generated. The proportion of employees’ productive working time was around 20% higher and the ROI achieved was also around 20% higher compared with the companies with low employer attractiveness.

Factors of internal employer attractiveness

When examining factors to increase internal attractiveness, it should first be noted that all employees perceive their reality subjectively and that emotional and action-related factors often have an unconscious effect.

Therefore, it is difficult to define universally valid catalogs of attractiveness-enhancing actions. However, many positively impacting behaviors can be derived from the literature and especially from comments made in interviews about the choice of the most attractive employers. From the presented empirical analyses above we derive the ten most important internal attractiveness factors (see also https://qualitrain.net):

1. Management style and feedback culture of superiors
2. Measurably formulated objectives to be achieved and explanation of their significance
3. Degrees of freedom in implementation
4. Measurement/assessment of achieved results (target-performance comparison) including verbal and written recognition
5. Learning opportunities at the workplace
6. Further training offers, also with regard to soft skills for interpersonal interaction
7. Career opportunities within the company
8. Work at home
9. Reconciliation of work and family care
10. Joint activities (where people meet and exchange ideas).

These factors are – according to the cited IFPM-survey – not really time-dependent. In our opinion, they represent the needs of employees that need to be met so that they feel comfortable in the company and want to engage themselves to achieve the company’s goals.

This requires that all managers, from top management to cost center or team leaders

- regularly explain the corporate goals and the strategic objectives for each business unit,
- agree on the annual objectives so that they know which results are important,
- discuss the achievement of objectives at least twice a year and, if necessary, agree on corrective measures,
- acknowledge and thank employees for the results achieved in the past months and the efforts made to achieve them,
- take up the suggestions for improvement from the meetings and assess their feasibility or initiate their implementation, and
- take up and process the comments of the interviewed persons concerning internal cooperation.

The main factors of internal employer attractiveness are thus mainly realized through the performance of people-related management tasks.

The financial compensation for work performed is still the most important and most easily comparable decision-making factor in all employee generations (from the baby boomers, birth years 1950-1964, to Generation Z, birth years 1996-2010) (see above).

AMPLE for Sustainable Success

There are five elements, or “top controls”, that constitute the uppermost deciding parameters of any successful organization. Sustainably successful companies organize themselves and thus also their management tasks according to these, which we call AMPLE for short, as described below.

Attractiveness for employees

Every organization must be able to find and retain employees who have the skills, abilities and knowledge to invent, develop and manufacture products and services in a customer-focused manner and to operate the necessary internal processes in line with the needs of the customers and the own organization.

Therefore, conditions must be created in the organization that appear more attractive from the point of view of existing and potential employees than those of other potential employers. Good pay is an important factor. However, surveys repeatedly show that professional and position-related development opportunities, further education opportunities, employee promotion and, above all, the purpose of the work and the way of working together are decisive.

Market position

A company’s market position improves when its own products and services generate more benefits in the eyes of existing and potential customers than the offers of other providers. Net sales price is only one factor. Rather, market position depends on whether in customers’ purchase decisions the company’s offer-benefits are ranked higher than those of other suppliers.

Profitability

The net proceeds generated must cover the costs of the entire current operation, enable the preservation of the existing substance, and achieve a return in line with the market for all investors. In addition, money for the development of future success potentials must also be earned.

Without generating these funds, a company cannot invest enough in its market position and in evolution. It will not be viable in the medium term. In order to do this it is also necessary to improve internal input/output ratios, i.e., to increase productivity everywhere and continuously.

Liquidity

If a company does not have enough available funds (cash balances or open credit limits), it can neither pay wages nor invoices due on time. This is usually the end, as only a few can avert bankruptcy. Solvency at all times must therefore be planned and controlled in both the short and the long term.

Evolution

Every company must permanently develop further and improve. Other suppliers offer existing products and services cheaper, products or services become too expensive to produce, or are no longer in demand.

Internal, especially administrative processes, must be adapted to new requirements and handled more efficiently. This requires constant innovation and improvement. Evolution is indispensable. Many formerly world-famous companies have disappeared because they did not promote their evolution with enough vigor.

A five-pointed star is chosen for the AMPLE representation to indicate that the relationships between the five elements must be brought into a fluid equilibrium if an organization is to be sustainably successful. The difficulty in this endeavor is that the interactions between the five elements can be both supporting and contradictory.

For example, if a company tries to improve its market position by granting discounts or reductions, capacity utilization in the factory increases, but due to lower net revenues per unit, contribution margins decrease and, as a result, cash flow and profit decrease. Due to the high capacity utilization, new investments in plants become necessary, but due to the lower cash flow the money for this is only available to a limited extent. Lower cash flow also means that less can be invested in evolution and that less money is available to improve the attractiveness of jobs. AMPLE will fall out of the flow equilibrium and, if countermeasures are not taken in time, insolvency will occur in the medium term.

Further explanations of our AMPLE can be found in section 1.1. of the book Management Control with integrated Planning, chapters 1.1 and 2.