Study Reveals Recruitment Challenges for Companies That Experience Negative Publicity

July 2017

With the rise of social media and real-time news updates, today’s workforce is inundated with information and able to research potential employers with the click of a button. While in the past negative publicity may have flown under the radar, companies are under more scrutiny than ever before. Negative publicity has a major impact on businesses of all sizes, and though the larger PR disasters (think Pepsi and United) may dominate more of the mainstream news cycle, small companies who experience negative publicity often face consequences that have an equal effect on their business.

One of the most obvious impacts of negative publicity comes in the form of recruitment challenges. According to a recent study conducted by CareerBuilder, 71 percent of US workers would not apply to a company experiencing negative publicity. Perhaps more interesting was the split in opinion between male and female employees – while 61 percent of male respondents said they wouldn’t apply to a company experiencing negative press, that number rose to 79 percent for females. Considering the fact that 26 percent of employers cited some form of negative publicity for their organization, a significant risk of losing out on top talent exists for companies.   Aside from recruitment issues, employees who have worked at companies experiencing negative publicity reported the following negative impacts: lower employee morale, higher voluntary turnover, and decline in sales.

What does this mean for employers and jobseekers?

A company that experiences negative publicity is in no way deemed to fail. For many companies, those experiences can serve as powerful lessons and ignite change. Companies looking to overcome negative publicity should be transparent with the public and potential employees about both their plans to rectify the problem and the policies in place to avoid a repeat occurrence. The good news for companies  experiencing bad press is that it has far less of an impact on existing employees - only 1 in 10 of the workers surveyed stated that they had left a job due to negative publicity.

As expected, companies who are able to capitalize on positive press by sharing it with their organization experience benefits like higher morale, sales boosts, increased referrals, job applications and accepted offers, and an overall lower turnover.

Candidates thinking about taking a position with a company currently experiencing negative press should consider both how the company handles the situation as well as what its long-term business strategy is. While negative press can be detrimental if not handled properly and indicative of larger problems within an organization, many companies move on from these experiences and continue to be successful. Candidates should have meaningful conversations with prospective employers to determine whether the positive aspects of the position and the future of the organization outweigh the negative publicity.

The 24 hour news cycle is not going anywhere, and today’s jobseekers are able to learn about companies through sources extending far beyond traditional media. Both candidates and employers should make it a point to address instances of negative publicity. Doing so will allow companies to mitigate the threat to hiring and provide jobseekers with much needed insight to inform their decision of whether or not to accept a position.