The Role of the Recruitment Brand On Service Firms’ Performance

Michael A. Wiles, Arizona State University
Sascha Raithel, Freie Universität Berlin

Brand management is principally concerned with managing the brand’s associations among consumers. Yet, firms compete in labor markets in a war for talent, and in these, rating of the firm as a potential employer—i.e., its recruitment brand—can be an important consideration. However, in the literature, scarce attention has been paid to the recruitment brand—its relationship with the consumer brand as well as its impact on firm value thus remains unclear. We utilize a dataset of 147,664 daily consumer and recruitment brand ratings for 194 service firms to examine these relationships. In services, employees enact the brand with consumers and employee turnover is high, increasing the likely materiality of the recruitment brand. Findings reveal that the recruitment brand both influences—and is influenced by—the consumer brand. Further, recruitment brand improvements positively moderate stock returns from consumer brand improvements. The recruitment brand’s impact on returns, however, is reduced by organization size and compensation levels. Results reveal the importance of the recruitment brand and also provide new insight for consumer brand management in services.