At a glance
By Katie Langmore
A company’s reputation is no longer something that can be entirely managed internally. Gone are the days where only employers conduct “due diligence” research on potential employees.
Current and former employees – and even job applicants – are now empowered to review their experience of a company online. Individuals can “rate” a company on job search engines such as Seek, corporate review websites such as Glassdoor and Comparably, and on social media.
Scott Traeger, commercial disputes partner with legal firm Lander & Rogers, says that no organisation, no matter how excellent, can avoid the odd poor review from a current or former employee. However, when negative reviews accumulate and persist, reputational damage can become a serious risk.
The impact of reviews partly depends on the type of company. “Businesses like hotels and restaurants, by their nature, are going to attract feedback and opinions,” Traeger says.
“For them, reviews can be a great source of marketing, and if they are generating a lot, then having the odd negative review will not do a lot of damage.
“For professional services firms and other businesses, it can be more difficult. Reviews are rarer, so one negative review is more likely to stand out. A poor employee review will certainly cause people to question whether it is a company they want to engage with or work for.”
What could go wrong?
Research supports the notion that poor reviews can have an impact on a company.
In a 2018 Indeed survey of 500 workers, 62 per cent of respondents said insight into the company’s employer reputation would be “extremely important” if they were considering a new job opportunity.
CareerArc surveyed 508 job seekers and 654 human resources professionals in the US, and 64 per cent of respondents said they have stopped buying from brands tarnished by poor employee treatment.
According to Glassdoor, 86 per cent of job seekers/employees are “likely to research company reviews and ratings when deciding to apply for a job”.
This suggests that a cluster of negative reviews – or even one particularly scathing one – could affect a business, deterring potential employees or even customers from engaging with the company.
Strategies to manage risk
As the first line of defence, Traeger recommends implementing strong processes to enable staff to provide feedback internally in a safe way, instead of venting their frustration to the world.
Giving people the ability to pass on their concerns to higher levels of the company may help, especially if they believe those concerns will be taken on board, Traeger says. “They will be more likely to use those avenues while they are still engaged employees of the company, rather than leaving disgruntled and posting about them online.”
It is also crucial to have processes in place for monitoring and managing external reviews when they do happen, he adds.
If the review has been written by a current employee who can be identified, the first step would be to speak to the person to address their concerns in person, says Traeger.
For anonymous reviews, or for reviews by former employees, responding to rather than ignoring them may put the company in the strongest position. A Glassdoor survey has found that 80 per cent of job seekers in the US who read reviews had an improved perception of a company where the company had responded to a negative review.
Having a dedicated person who is responsible for responding to reviews is important, says Traeger. Responses should be respectful. They should thank the reviewer by name, if possible, acknowledge any positive feedback and address any concerns.
Traeger is often approached by companies that have received a defamatory review.
Understandably, they want to have a false or malicious review from a disgruntled or former employee removed.
“Under Australian defamation law, truth is a complete defence to a defamation claim, so we primarily see scenarios where someone has made something up or significantly embellished the truth,” he says.
If the reviewer can be identified, a letter may be sent pointing out that certain parts of their review are false and defamatory, and asking that the review be removed.
For an anonymous review, steps may be taken to try to reveal the reviewer’s identity with the help of the review site. In extreme cases, the review site itself may be subject to legal action.
Internal processes that recognise outstanding employees with awards or professional development opportunities can go a long way to boosting the company’s reputation – both internally and externally, says Traeger.
While it is impossible to avoid negative reviews, they can – and should – be treated as a tool that can be used to improve company culture.
“Review sites are, by their very nature, a forum for feedback, so you can leverage them by seeking to improve your employee experience through the identification of problematic staff, issues around work culture and other concerns,” he says.
Managing reviews can be time consuming, but it is a necessary step to help safeguard Words Katie Langmore a carefully built reputation.