Survey: Your Company Has a 1-Star Rating? Expect Only 1 in 5 Candidates to Apply

New CareerArc study reveals about a third of companies believe review sites give an unfair portrayal of employers

LOS ANGELES — Companies struggling to fill job openings may have their online reputation to blame.

According to the 2017 Employer Branding Study, published today by CareerArc—a global HR technology provider of social recruiting and outplacement services—only 21% of job seekers would apply to a company that had an average rating of 1 out of 5 stars on an employer review site; a mere 34% would apply to a 2-star company. The survey also reveals that 91% of candidates seek out at least one online or offline resource to evaluate an employer’s brand before applying for a job.

Meanwhile, 31% of employers claim review sites give an unfair portrayal of a company’s employment practices and company culture, with the majority of companies (55%) believing these sites provide only a “somewhat fair” portrayal of employers. Nevertheless, 91% of employers believe that a company’s star rating on an employer review site can win or lose a job applicant.

“We live in an age where the decisions we make about where to eat, what movie to watch, and—now—where to work will likely be influenced by an online rating or review generated by peers, not companies,” says Robin D. Richards, Chairman & CEO of CareerArc. “This reality illustrates the shifting balance of power from employers to employees who—emboldened by a recovering labor market—are growing more vocal and demanding of the companies they work for. Organizations that continue to neglect their employer brand and reputation, especially those looking to hire from the millennial-majority workforce, risk losing out on the best talent today, and even more so tomorrow.”

Over 1,160 people participated in the online survey between September 18 and October 16, 2017 that included 508 adults living in the US and 654 HR and talent acquisition professionals.

Women More Likely to Avoid Job Opportunities with Poorly Rated Employers 

Female job seekers are 33% less likely than male job seekers to apply to a 1-star rated company and are 25% more likely to rely on employer review sites when vetting a potential employer.

The data also shows women are generally more likely than men to abandon a job application after reading online reviews detailing poor employee treatment and/or management, poor candidate experience, poor customer experience, and poor layoff practices. As employees, women were 15% more likely than men to consider quitting their job after witnessing poor client, candidate, and employee treatment.

2 out of 3 Consumers Have Stopped Buying from Companies Plagued with Bad Press About Poor Employee Treatment

The report finds that 64% of consumers have switched brands or stopped buying a company’s goods or services because news surfaced about that company’s poor treatment of employees.

Twenty-five percent of adults report having stopped their promotion and/or purchase of their employer’s products as a direct result of a poor employee experience. Millennial employees were 30% more likely than Gen-Xers and 60% more likely than baby boomers to stop purchasing or promoting an employer’s products due to a poor employee experience.

Although 96% of companies believe employer brand and reputation can positively or negatively impact revenue, less than half (44%) monitor that impact.

A Decade Later: Adults Impacted By Great Recession Are More Likely To Be Unemployed Today and Anxious About Tomorrow

Of the adults surveyed, 40% say they were negatively impacted by the Great Recession. Compared to those who claim they were unaffected by the downturn, those impacted were also 44% more likely to be jobless today.

Sixty-five percent of adults who experienced a layoff during the recession say they developed a negative perception of the employer that let them go—66% of whom say they still carry a somewhat negative perception of that employer today, nearly ten years after the official start of the downturn in December 2007.

Those affected by the recession are also more likely to be dissatisfied with their present employer, being 2.5x more likely to give their current employer a 1-star rating. They are also 2.5x more likely to believe that another significant recession will happen in the future.

Percentage of Fired or Laid-Off Employees Sharing Negative Reviews of Employers Has Nearly Doubled

Terminated or laid-off employees report being more disgruntled and nearly twice as vocal today as they were two years ago.

Sixty-six percent of adults reported their layoff or termination negatively impacted their perception of their employer—a 22% increase in just two years. The proportion of job seekers who shared that negative perception with others nearly doubled to 66%; in the 2015 CareerArc Employer Branding Study, only 38% had reported sharing their negative views. The use of social media and employer review sites to share these negative opinions also doubled to 19% and 21%, respectively.

However, the survey also reveals that employees who were provided outplacement or career assistance following a layoff were 38% less likely to harbor a negative perception of their former employer and 3x more likely to continue purchasing that company’s offerings after the separation event.

Two Years Later: Millennials Are Even More Jaded By, and More Vocal About, Being Let Go

Although baby boomers are 2x as likely as millennials to report having experienced a layoff or termination in their careers, millennials are 22% more likely than baby boomers to develop a negative perception of the employers who let them go. The percentage of millennials who developed negative perceptions of their former employers increased by 14% in the past two years. Compared to Gen-X and baby boomers, millennials are also the most inclined to share their negative views of past employers and are 2.5x more likely than Gen-Xers to share those views on social media.

Millennials were also less likely to apply to a company after reading poor employer reviews, more open to switching jobs after witnessing poor employer practices, and more likely to share their opinions of employers on review sites and social media compared to Gen-Xers and baby boomers.

Additionally, 65% of adults say they would be less likely to purchase goods and services from a company that had laid them off.

Unhappy Employees Who Gave Employers a 1-Star Rating Also Most Typically Apply for Jobs Blindly

The survey found key differences in job search behaviors between the “happiest employees”— those who gave their employer a 5-star rating—and the “unhappiest employees”—those who rated their employers 1 out of 5 stars.

The “unhappiest employees” were:

• over 2x more likely to switch jobs;
• typically 2.5x more likely to apply for a job without performing any additional online or offline research about an employer; and
• 60% more likely to develop a negative perception of their employer due to a layoff or termination.

Survey Methodology

This survey was conducted online within the U.S. 1,162 respondents comprised of 654 human resources and hiring professionals and 508 adults ages 18 and over (51% Female, 49% Male; 44% Millennial, 29% Gen-X, 28% Baby Boomer) participated between September 18 and October 16, 2017. The study re-examines and expands upon the results published in the inaugural 2015 CareerArc Employer Branding Study.

About CareerArc

CareerArc is the leading HR technology company helping business leaders recruit and transition the modern workforce. Our social recruiting and modern outplacement solutions help thousands of organizations, including many of the Fortune 500, maximize their return on employer branding. By leveraging the cloud, running on world-class infrastructure, and combining web, mobile and social media applications, we help companies gain a competitive edge in recruitment, employment branding, and benefits. Learn more about CareerArc’s enterprise solutions at http://www.careerarc.com/