IRF White Paper: Benefits and Rewards Help Attract Talent

A research paper recently published by the Incentive Research Foundation (IRF) suggests that companies with compelling benefits and incentive programs should promote them in their recruitment advertising. 

 

Companies that promote benefits and rewards, including incentive travel and learning opportunities, in their job advertising attract 300% more applicants than those that do not, according to a 2017 analysis of 93,000 job ads, conducted by recruitment advertiser Appcast. The report found that application rates increased to 22.5% from 7.4% simply by highlighting benefits and rewards in job advertising. 

 

These and other related findings were reported in the IRF white paper and meta-analysis of research authored by Co-Research Director of the IRF and principal of the Center for Human Capital Innovation Allan Schweyer and Ashley Whilllans of the Harvard Business School: “Academic Research in Action: Signaling Theory and the Role of Incentives and Rewards in Attracting Talent.”
 

According to the white paper, “Our research found that ads and employer branding containing descriptions of benefits and rewards (including their cash value) signal empathy and a caring culture and appear to trigger the same positive response as ads aimed at consumers’ emotions. Why? According to decades of academic research into signaling theory in circumstances of information asymmetry (e.g. the employer knows far more than the potential applicant) the disadvantaged party looks for signs or ‘signals.’” The white paper asserts that “candidates appear to look for and respond to signals that hint at what it might be like to work for an organization.” 

 

In a separate study conducted by Schweyer and colleagues at the Harvard Business School, “we found that job seekers pay even more attention to advertised non-cash benefits and rewards when those benefits are described clearly, including the cash value of the rewards. Importantly, this appears to cause job seekers to cast those potential employers in a more caring light, and to assume better work-life balance in those firms. In these cases (well-described benefits/rewards), applicants expressed up to 50% more interest in positions than they did similar advertisements (without listed benefits/rewards) from other employers. This held true even when those other positions offered clearly better total starting compensation.” 

 

The report advises organization to:

 

• Promote their job openings with clear descriptions of the range of non-cash rewards they offer. “When comparing job options as a potential candidate, it is easy to measure and compare salaries but often confusing and difficult to compare benefits and rewards. The more rewards signal a positive, caring culture – a message many non-cash rewards convey – the more applicants the firm is likely to attract, even at starting salaries below competitors.”

 

• Consider using reward programs to encourage employee brand ambassadorship, such as posting positive reviews (that include mention of non-cash benefits and rewards) on sites like Glassdoor.com and Indeed.com.

 

• Create quick ‘day-in-the-life' video clips for the career pages on your website. “Consider rewarding and recognizing members of your talent acquisition team who take the time to follow up with prospects who visit your career site but do not apply to a job opening. Incentivize your high performers and/or best brand ambassadors to represent your organization at live or virtual career fairs. Remember too that firms often lose their best prospects to competitors with a more efficient hiring process. In this case reward interview panels and hiring managers who reduce ‘time-to-offer,’ especially in your most competitive, hard-to-fill positions.”

 

The report concludes. “Our analysis reveals that work environments plagued by disrespect, mistrust, and exclusion drive more than ten times the attrition than drivers related to compensation and other factors.” 
 

 

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