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Raz Godelnik headshot

Would 69% of Americans Turn Down a Job Due to a Company's Poor Reputation?

Let’s say you are looking for a new job. You apply for a position that seems like a good fit - your skills and experience match the job description and you believe this job would be good for your career. There’s only one little problem – the company has a bad reputation. Let’s assume the company would like to hire you – what would you then? Would you take the job?

According to a new survey presented last week at the COMMIT! Forum in New York, there’s a very good chance you would say no. Conducted by Corporate Responsibility Magazine and human capital company Allegis Group Services, the survey found that 69 percent of Americans would not take a job with a company that had a bad reputation, even if they were unemployed.

"The results of this year's survey demonstrate the importance of a positive corporate reputation in recruiting and retaining talent. Our year-over-year analysis shows that this sentiment remains strong among employees and potential new hires in 2013," said Elliot Clark, CEO of Corporate Responsibility Magazine, which hosts the Forum, in a news release.

This concept certainly seems to make sense – better company reputation attracts better talent. Still, I couldn’t help but wonder about the validity and the application of the survey’s results. Is it really possible that reputation has become such an important factor that 7 out of 10 people would actually say no to a new job just because they feel the company is not good enough? And if so, what does it mean for companies, especially when it comes to sustainability?

First, let’s dig into the study further to understand the findings. What surprised me the most was this figure: 69 percent of unemployed Americans would be likely to turn down a job offered by a company with bad reputation.

The survey found not just a connection between good reputation and talent attraction, but it also found that a larger paycheck can compensate for bad reputation. According to the survey, 33 percent of prospective employees would require above a 50 percent increase to accept an offer from a company with a bad reputation. At the same time, the findings show you can’t buy everyone even with a substantial salary raise – 31 percent of the surveyed would just not accept an offer from a company with a bad reputation no matter what.

Now, this is not the only survey that shows how prospective employees are paying more attention to values, or are looking for what Net Impact described in its latest Talent Report as “jobs that provide the opportunity to make social or environmental impact.” Yet, it still seems to me quite unlikely that this trend has grown so much that it has become a deal breaker for the majority of the American unemployed, as the survey suggests.

The first reason is that this survey, which was conducted over the phone, seems to represent attitudes more than behavior. It might be that many of the surveyed who are unemployed felt that bad reputation might be an obstacle for them, but if this question became real I doubt if even 10 percent of them would actually consider saying no to a job even if the company does have a bad reputation, especially if they have a family to support.

I believe people feel somewhat compelled to provide the “right” answer in this type of survey, just like people keep saying in surveys that they are willing to pay a premium for eco-friendly products. As we all know, data shows that their actual behavior is very different.

Hence, in this case I don’t believe companies with reputational issues from McDonald’s and Walmart to JP Morgan and BP have a problem finding prospective candidates. In addition, the survey suggests that companies with a bad reputation need to pay more to attract employees, but it lacks evidence in real life, where many companies with a better reputation actually pay more. For example, Costco pays its employees more than Walmart, Chipotle pays more than McDonald’s, Whole Foods pays more than other supermarket chains and Starbucks pays more than Dunkin’ Donuts.

Another point that should be emphasized is that reputation is not necessarily synonymous with responsibility. If you look at the 2013 Harris Reputation Quotient survey, the first two companies with the highest reputation scores are Amazon and Apple. I would argue that Amazon may be a great company from a business point of view, but it still lags behind most companies when it comes to environmental and social issues. Apple is also not exactly one of the leaders in the area of sustainability (see, for example, the design of the latest iPhones). So the bottom line is that even when prospective employees prefer companies with great reputation, it doesn’t necessarily mean they end up working for responsible companies.

Still, even with these doubts about this survey, it is not without any value. It does add to the growing body of evidence that employees are not driven solely or even mainly by pay. As Dan Ariely, Daniel Pink and others explain, it’s more complicated than that and in many cases making constant progress and feeling a sense of purpose are far more important as drivers.

So what is the lesson for companies? Good reputation does play a role, especially for top talents that can choose between few potential employers. Companies that want to fully take advantage of that will have to ensure their reputation is also based on a sustainability pillar, not just because this is a good business approach, but also because sustainability is the place where progress and purpose could be fused together to create the most interesting challenges for both their current and prospective employees.

But how do you do it exactly? Later on this week, I’ll present a great example that IBM provided on COMMIT! Forum that can be an inspiration to other companies. To be continued...

[Image credit: City of Marietta, Flickr Creative Commons]

Raz Godelnik is the co-founder of Eco-Libris and an adjunct faculty at the University of Delaware’s Business School, CUNY SPS and Parsons The New School for Design, teaching courses in green business, sustainable design and new product development. You can follow Raz on Twitter.

Raz Godelnik headshotRaz Godelnik

Raz Godelnik is an Assistant Professor and the Co-Director of the MS in Strategic Design & Management program at Parsons School of Design in New York. Currently, his research projects focus on the impact of the sharing economy on traditional business, the sharing economy and cities’ resilience, the future of design thinking, and the integration of sustainability into Millennials’ lifestyles. Raz is the co-founder of two green startups – Hemper Jeans and Eco-Libris and holds an MBA from Tel Aviv University.

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