Does Employer Brand Matter? An Empirical Study on Online Job Reviews, Social Media Usage and Firm Performance

Abstract

We examine how digital communication channels build up a firm’s online employer brand and affect its market value. We operationalize online employer brand using employee-contributed job reviews and firm-managed social media posts. Our findings show that online job reviews are positively associated with firm value, as reflected in Tobin’s q, a forward-looking measure of firm performance, after accounting for overall corporate (consumer) branding. 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. Employer brand also contributes to a firm’s innovation capabilities (i.e., innovation quantity, quality and culture) for those firms oriented towards IT and R&D. 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 platforms, job reviews, social media, complementarity, innovation, Tobin’s q