The impact of employer attractiveness to employee and firm productivity

Abstract

Objectives The main objective of this thesis is to find out if being an attractive employer has positive effects on firm productivity. Being an attractive employer should enable firm a better environment for recruitment and thus help the recruitment of highly talented, motivated and suited workforce. Highly talented employees increase the capabilities of firms' human resources and should increase the level of productivity and financial performance.

Methodology This study uses quantitative methods, more specifically multiple regression analysis. The study period is from 2010 to 2015 and as metrics this study uses employer branding rankings collected from employer branding consultancy Universum Communications and total factor productivity (TFP) calculated from open financial data collected from ORBIS database. Several regressions are conducted to investigate the impact of employer attractiveness (by majors: business, engineering and IT) to changes in firm level productivity.

Key Findings Study finds partial support for the hypothesis that being an attractive employer positively affects firm productivity. Within IT majors, the impact is significant in all study years, increasing during first years and reaching its peak in year three. Other majors, engineering and business, typically show no significant impacts in neither direction, but in year four engineering majors show contradictory results, indicating that being an attractive employer actually would affect the productivity negatively. Results are significantly stronger and more coherent in the cases of positive correlation and as a conclusion can be said that employer attractiveness can have significant positive effects on productivity, but this is not always the case.