You Say, Firm says: An Empirical Study on Online Employer Brand and Firm Performance

Abstract

We examine how various digital communication channels jointly offer critical signals of the quality of a firm as an employer, build up its online employer brand, and affect firm value. Using large-scale multiyear datasets of online job reviews, social media posts and firm financial performance, we operationalize online employer brand using employee-contributed job reviews and firm-managed social media posts. We find that online job reviews are positively associated with firm value, as reflected in Tobin’s q, a forward-looking measure of firm performance. In addition, we find that firms can complement this effect by posting employee-focused content on their social media pages to facilitate the diffusion and observation of such information. However, the effect of job reviews does not complement broader content types of social media posts. The synergic effect is stronger for firms with a higher proportion of IT-related positions, which have higher employee mobility, and R&D positions that are harder to replace. Further analyses show that this synergic effect is likely due to firms that possess better working conditions and can credibly communicate these facts to the labor market to improve recruitment and retention. Taken together, our findings shed light on the role of online communications through multiple digital channels and coordinated strategies across the channels in the development of corporate online employer brand.

Keywords: Employer brand, digital channels, job reviews, social media, complementarity, Tobin’s q