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Damaged reputation can lead to damaged workforce

12 Jun 2013 - Blog

Tom Debenham, MD of People Insight, looks at the relationship between damaged reputations and workforce productivity.


Loyal staff working for under-fire companies such as Google, Starbucks and Amazon are so affected by the public’s negative reaction that their pride, motivation and productivity plummets.
Reputation matters, so whether the knives are out for BP or even the BBC it can have a dramatic effect on every day members of staff.

Research conducted among 100,000 workers from a range of organisations by employee engagement company People Insight shows the real impact negativity has on their performance.

In many cases it can take between three and five years for staff to believe once again in the company it works for. While a pan-industry average shows nearly eight out of ten (77%) employees are proud of where they work, that figure slips to 47% in a company whose reputation has taken a knock. Although an average of 68% would recommend their company to a friend, again that figure falls in a business which is under-fire – in this case to 43%.

Tellingly, morals figure highly too. In troubled firms, less than 40% agree that the organisation is run on strong values.We all know that reputation matters but for the first time we can work out exactly how much it matters.

Business integrity is highly correlated with engagement, and engaged employees equal productive employees. It is, therefore, highly damaging to a company when these external factors become very much internal ones. Tom said the impact can take years to reverse.

“They say that trust is like a mirror – once broken it is very difficult to repair. We say it is a two-way mirror: not only does a damaged reputation cause customers to flee, but staff themselves often become disengaged and more prone to leave.

Whilst it can only take a moment for trust to shatter, repairs to reputation and staff engagement take much longer – our data suggests 3-5 years is typical.”

This post is reproduced from Business Daily:


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