What does employee value proposition mean?
Organizations are starting to realize the importance of the employee value proposition (EVP) in boosting their employer brand and attracting, engaging, and retaining top talent. However, how can you create an attractive EVP that showcases the special perks and chances your company offers, and what does EVP actually mean? Let’s take a closer look at this.
An employee value proposition is what a company offers its employees in exchange for their experience, commitment, and skills. Everything from your beliefs, mission, and social purpose to the culture of your organization and its perks to your pay, benefits, career advancement opportunities, and work-life balance are part of this.
Your EVP’s overarching goal should be to outline and convey to potential workers all the special perks and advantages of working for your company. By doing so, you can attract the kind of people who will complement your one-of-a-kind product and show potential employees why your company is a great fit for them.
The employee value proposition is the unique set of advantages that employee receives as a result of the knowledge, competence, and experience they provide to a company.
Your employer brand and your employee value proposition are two sides of the same coin.
A company’s internal employee value proposition explains to workers the benefits they’ll get from staying with the company. It’s a commitment you make to your employees.
On the other hand, your employer brand is something that exists outside of your company and is associated with how people perceive it, particularly in relation to job candidates. It’s the public face of your firm, conveying its purpose, values, principles, and the experience of working with you.
There is some overlap, though. An organization’s employer brand is its public, artistic representation of their EVP. Your employer value proposition (EVP) lays out the benefits that workers take away from working for your company, while your employer brand spreads the word.
Put simply, your employer brand revolves around your EVP. In it, you should explain what your company does and how it differs from others.
The advantages of an effective employee value proposition
There are real returns for companies who put money into their employee value proposition. To what extent does it impact your company?
In order to attract and retain top talent, it is important to have an honest and compelling employee value proposition (EVP) that outlines the specific advantages your company offers its workers. If you do this, you can increase your chances of attracting and retaining talented individuals who will thrive in your company because they connect with your offerings. Companies that successfully implement their EVP can reduce yearly employee turnover by 69%, according to Gartner.
- An invested and enthusiastic workforce: When your EVP is clear, it helps your staff grasp the big picture of the company’s goals and values, which increases their buy-in and dedication to their job. For example, studies have shown that companies with compelling EVPs see a nearly 30% increase in commitment from new hires. Organizations can save money on recruitment and retention expenses if they are successful in attracting and maintaining top talent.
- Organizational development and financial success: A more invested, efficient, and contented workforce will positively affect company success. Highly engaged workers can boost profitability by 23% and improve customer loyalty by 10%.
The employee-employer relationship is characterized by mutual respect and trust when both parties are upfront and honest about the expectations placed on them and the benefits they can anticipate from working for the company.
The five pillars of an effective employee value proposition
Among the many benefits that a company can provide its workers, the employee value proposition includes:
- Pay
- Work-life balance
- Stability
- Location
- Respect
Your company’s reputation as an employer is built on the sum of the essential elements of your employee value proposition.
The employee value proposition model consists of the following components, which we will examine in greater detail.
1. Pay
Salary and benefits are the cornerstones of the employee value proposition model. This encompasses not only the level of salary satisfaction but also other forms of compensation, such as bonuses, and factors like your evaluation system. Paying people fairly is one of the seven HR best practices.
Money isn’t everything, and it certainly isn’t everyone’s first concern when looking for a job. JLL did a study and found that 54% of those asked want to make a good living. This was their second most important goal, after having a good quality of life. At the same time, better pay was the main reason people were willing to risk leaving their job.
Companies should take a broader view of compensation, says Dr. James Chitwood of PerformanceCulture.Expert. People perform X in order to earn Y under most organizations’ purely transactional view of compensation. According to Chitwood, there are numerous methods of rewarding an employee that do not include monetary compensation.
An outstanding long-term employee can be passionate about helping the planet, expressing their creativity in writing, or mentoring new hires. How can a business ensure that workers have time to pursue interests that benefit the business while also satisfying workers’ fundamental principles?
2. Work-life balance
The ability to work remotely or from home, retirement plans, paid time off, vacations, and flextime are all part of a work-life balance. The effect on workers’ health and happiness is enormous.
When it comes to work-life balance, there is no silver bullet because different employees place different values on various aspects of the arrangement. Paid maternity leave, for instance, is more highly valued by new parents than by recent college grads. Just as Gen Z is less likely to be concerned about retirement plans and pension schemes than older workers, it is critical to understand your employees’ wants and desires in order to craft a compelling employee value proposition that will give you an edge in the job market.
All generations seem to agree on one thing: a mixed work style would be ideal. Despite the fact that 22% of employers have stated that all employees must return to the office five days a week, 80% of employees want to work remotely at least 2-3 days per week, according to the EY Work Reimagined 2022 Survey.
The majority of people around the world place a high value on workplace flexibility, according to a massive McKinsey survey. At the same time, 38% of employees report feeling anxious or overwhelmed due to their workload, according to data by JLL. 35% believe their company will actively encourage them to take breaks during the day and balance their professional and personal lives better.
3. Stability
Stability in the workplace, in its most basic definition, means that workers are free to do their jobs without fear for their physical and emotional well-being.
When we talk about stability, for deskless workers, it can also include things like guaranteed work hours and consistent work schedules.
Staying put in one’s job is another form of stability. It alludes to the chances your workers have to grow professionally and advance in their current roles. All of your hard work on improving yourself will pay off here.
In order to provide your employees a long-term view of their future with your company, it is necessary to offer educational and mentoring initiatives, successful performance management, internal promotions, and other career prospects. Workers, especially those in their twenties and thirties, prefer to work for companies that offer room for advancement.
4. Location
The physical location of your business is just one aspect of location. Location, in the widest sense, could refer to things like a supportive workplace, a solid company culture, and the amount of independence employees have on the job.
Organizations should reconsider the significance of the location component of EVP in light of the increasing prevalence of hybrid and remote work arrangements.
5. Respect
Respect is the last component of the model for the employee value proposition. A respectful work environment is one that honors and upholds the principles and values of the corporation as a whole, as well as its employees, customers, and community. A significant factor in employees leaving their jobs, according to McKinsey’s research, is executives who do not care about their employees or inspire them. One-third of those who left said it was a major factor.
Guidelines for creating and refining an employee value proposition
Here are some pointers to help you craft an enticing employee value proposition for your company that supports your overarching goal and aids in attracting, retaining, and engaging the best talent.
- Make note of the things that set your business apart.
Identifying what makes your company unique in comparison to competitors is the first stage in crafting an employee value proposition (EVP). Here are some questions to get you started:
When compared to the competition, what sets you apart?
Do you have something special to offer workers that other companies don’t?
What makes your company stand out from the competition?
Mariya Hristova, a leader in people and talent, suggests three ways to begin crafting a compelling executive summary.
- To learn who the company is, you should speak with upper management. The company’s identity and your goals should inform the EVP, which is more than just a list of perks or ping pong tables. Do you want your business to be supportive, productive, or both?
- Make a strategy for how that identity integrates with things like compensation, perks, regulations (such as pay transparency), and cultural artifacts (like ping pong tables, for example).
- Try to put yourself in the shoes of an employee and see how their present work experience compares to that identity. Surveys or interviews with employees can help with this. If you find a discrepancy, dig deeper and consider how you want to present the EVP: as an aspirational ideal or as the reality of your job today.
- Learn what your employees require
In order for your EVP to be successful, you must first have a thorough understanding of your employees’ needs and wants. Employees’ wants and demands, especially in regard to work-life balance and stability, will differ according to their demographics and personal situations, as we’ve already covered in the employee value proposition model.
In order to find out what your employees need, it’s important to gather feedback and run surveys, focus groups, and research. Think about how your employees’ varied life experiences, viewpoints, and educational backgrounds affect their priorities and expectations on the job. That way, you can create an EVP that is welcoming to all types of employees, which in turn can help you recruit and keep a more varied staff.
Bruna Vasconcelos suggests having one-on-one meetings with workers to explore the themes that emerged from the data collected.
Spending time on these discussions provides a secure environment for employees to open up while also allowing you to go further into the survey data. They can go into more detail about their impressions and experiences with the company, and you can inquire about their preferences for changes they would want to see improved, says Vasconcelos.
- Create an EVP that fits with the aims, values, and mission of your organization.
For your EVP to be effective and cohesive, it must include and be in line with the organization’s specific mission, values, and goals. One way to do this is to emphasize the ways in which the company’s rules, procedures, and culture all contribute to the growth and development of its employees.
Employees will feel more connected to the company’s goals if you emphasize them in your employee value proposition.
You can attract applicants that share your values and will thrive in your company culture by highlighting them in your employer branding.
- Show genuine emotion.
When developing an EVP for your business, it is critical to be honest, open, and consistent with the company’s principles, practices, and culture. This establishes a strong foundation of trust and credibility among employees.
For instance, if you advertise work-life balance and flexibility during the hiring process on your website, be sure to deliver on these promises and reinforce the message for all employees.
To create an EVP that truly speaks to employees, it’s a good idea to include them in the developing process.
- Make your EVP real and open to everyone.
Take the abstract ideas presented in your employee value proposition and make them concrete by associating them with benefits like paid parental leave, flexible scheduling, yearly bonuses, and possibilities for professional growth. Make sure people know how certain projects, policies, and programs fit within the bigger picture of the EVP. Another option is to provide anecdotes or specific instances of how these initiatives have helped staff.
Your employee value proposition (EVP) will be more tangible, relatable, and persuasive if it is based on real-life experiences.
- Take a look at the employee life cycle from several angles
Attracting, recruiting, onboarding, retaining, developing, offboarding, and happily departing are the seven phases that make up an employee’s life cycle. An effective EVP highlights your company’s offerings throughout the whole customer lifecycle.
As an example, you can highlight your hybrid work paradigm in job descriptions during the attraction stage. To help your new hires get a head start in their roles, you can provide them online training or learning programs while they’re still on the job. In addition, you may incentivize employees to stay by increasing their income for each year they work for you, providing incentives for going above and beyond, and equipping them with the necessary technologies to excel in their roles.
Sean McPheat, CEO of MTD Training Group, a company that specializes in sales and management training, says that the most important thing is to find out what your people want from their job and then do something about it.
Consider the highlighted gaps and devise a strategy to fill them. Compensation, perks, chances for professional growth, and company culture are all areas that may undergo adjustments, according to McPheat.
- Bring together the employer brand, the EVP, and the workplace experience.
As an employer, you can keep your word to employees by combining employer branding, employee value proposition, and employee experience. Staff engagement rises when these three pillars of the employment relationship are solidly in place. As a result, performance and productivity improve, and employee turnover decreases.
How to accomplish this:
- Think about forming a single, committed team out of all these practices.
- Outline your ideal employee profile and your role as an employer.
- Learn what your employees expect from you.
- Inspect your present proposal for flaws and find ways to fix them.
- Change and keep an eye on things as needed.
- Clearly express your employee value proposition
The next stage, after developing your EVP, is to convey it clearly to stakeholders, workers, and potential applicants. Consider ways to humanize your EVP so that it captivates and engages your target audience.
One way to promote your EVP is by including employee testimonials in job descriptions, on your website, and on social media. This can be part of a larger strategy for communicating with prospects. However, you can inform your staff about it through team updates with supervisors, one-on-one meetings, the company newsletter, and monthly presentations.
- Evaluate performance
Setting a precise set of metrics to monitor the effect of your EVP and identify improvement opportunities is the last stage in creating an effective EVP. Metrics like cost-per-hire, employee engagement, and retention rates are useful.
Adjust your employee value proposition as needed depending on what you learn.
Employee value proposition examples
Let’s explore what makes an excellent employee value proposition in the real world.
1. Deloitte
In 2021/22, Deloitte prioritized implementing a new EVP and compensation plan. They highlighted what they strive for as an employer – ‘Passion for Purpose’, ‘Be the True You’, and ‘Never Stop Growing’ – as well as what they value in their employee relationships.
In line with Deloitte’s principles, goals, and strategy to promote individual development, purpose, and inclusiveness, the company has implemented a new system of rewards, increased competitiveness in pay, and established a clear separation between development and performance. These things have contributed to a more positive and motivating work environment where people feel safe to be themselves.
2. Patagonia
It is with great pride that Patagonia, a world-renowned outdoor apparel brand, fights the global climate problem as an ethical, sustainable, and ecologically conscious company. In an effort to combat climate change, it recently contributed all of its yearly profits to an environmental fund. In addition to composting, a bike-to-work week, a ride-share program, free customer repairs through the Worn Wear project, environmental training days for staff, and championing enhanced supply chain sustainability, the company also hosts environmental training events.
For the benefit of all parties involved—employees, candidates, customers, and the planet at large—Patagonia consistently articulates their EVP in terms of their environmental and ethical principles.
What is the result? A staff turnover rate three times lower than usual. Every day, employees at Patagonia have the opportunity to make a difference in the world while also serving a higher purpose.
3. WD-40
Workers at WD-40 wanted to keep working remotely even after the pandemic had passed. In response, the company created a “Work From Where” philosophy that said, “We don’t care where you work from, but we do ask that you use our corporate values to make your decision.”
As an example of one of these principles, “creating positive, lasting memories in all relationships,” the company urged its workers to consider how their remote work affected the larger organization and to decide for themselves whether it was a good fit. A recent survey found that 90% of workers felt the corporate culture had improved, and most employees followed this concept by choosing to work in the office.
This is exactly what happens when the relationships between various EVP parts are taken into account.
One last thing
As an employer, you can boost employee engagement and trust by keeping your employee value proposition, which is a promise you make to your workers. By being true to your EVP, you can even transform your present staff into irreplaceable advocates for your brand.
Your ability to recruit and retain top people, increase performance, decrease recruitment costs and turnover, and accomplish business goals depends on your employer brand and employee value proposition in an era where employees place a higher value on an organization’s reputation as an employer.
