Green buys more than gold: Pollution, pay, and attractiveness of small and medium-sized enterprise employer brand

Objective:
The objective is to examine how signals about the environmental pollution of a Small and Medium-sized Enterprise affect its perceived attractiveness as an employer, and whether higher pay can offset the negative effect of such signals.

Research Design & Methods:
To test our hypotheses, which required investigation of causal relationships, we used an experimental research design. The participants were Gen Z business students (N = 125). We operationalised employer attractiveness as the intention to recommend the firm as an employer. To analyse data, we used one-way ANOVA with Tukey HSD post-hoc tests after verifying normality and homogeneity of variance.

Findings:
As expected, pollution information significantly lowered the intention to recommend (ANOVA: F(3, 121) = 11.433, p < 0.001). All three ‘polluting’ conditions scored significantly below the non-polluting control. Even a +50% wage premium did not restore attractiveness to control levels, and pay differences among polluting conditions were not statistically significant.

Implications & Recommendations:
Environmental harm is a strong negative labour-market signal that compensation alone cannot neutralise. Managers should prioritise real, measurable pollution reductions in employer branding, align HR policies with sustainability and operations to avoid ‘mixed signals’, and account for a hidden ‘recruitment tax’ when environmental performance is poor.

Contribution & Value Added:
The study extends signalling theory and employer branding research by documenting the ‘dark side’ of environmental signals: negative environmental impact depresses employer attractiveness, and higher pay, even substantial premiums, cannot compensate for this impact. The article offers causal, experimental evidence that clarifies the magnitude of these effects among young job seekers’.