Employee value proposition (EVP) is the savior that distinguishes firms from their competitors in the job market and is a powerful technique for gaining employee engagement. A unique collection of benefits that an employee receives in exchange for the skills, capabilities, and experience they contribute to a company is referred to as an EVP.
Almost every tactic is easily replicable by competitors, placing businesses at risk and putting them in a competitive position. Organizations today are confronting a sharp increase in retirements, rival poaching of key employees, and the challenges of retaining talented employees at the executive and management levels.
Importance of Employee Value Proposition (EVP)
Employers have realized that their employees are arguably the only true differentiator that can provide them a competitive advantage. Therefore, they have started regarding their employees as the stakeholders besides their esteem clients.
Employers are now strategically defining and designing the EVP, as the importance of the EVP in recruiting, acquiring, and retaining top people in the industry has been established. This includes prioritizing HR policies, the development of an excellent public image, and employee involvement.
Defining the employer brand image
According to a recent study, 36% of job searchers(1) state that the employer brand, a subset of EVP, is the most crucial aspect in potential new employees. It implies that the company’s EVP has to be absolutely one-of-a-kind and captivating. The employer brand must stand out from the competition when candidates consider their job offer through research.
Attract Highly Skilled Professionals
A compelling EVP will help the company gain a competitive advantage and establish itself as an employer of choice, especially for candidates exploring alternative opportunities. It is believed that employees are drawn to solid EVPs because they know they will be rewarded and recognized at their best. First, an EVP should be shared with existing networks as an introduction to the company and should be consistent with the current brand identity.
An EVP is a significant attraction for potential new employees, especially today when many people are looking for an opportunity to work for a company that meets their goals and values.
Retaining Top Talent
High employee turnover and attrition are blight risks the system, undermine business production, and delay the deliverable. As a result, retaining top talent in the organization becomes a must to avoid the costs of hiring, training, and inducting them into the project.
Employee retention rates have direct and positive co-relations with customer retention and sales. The retention of talented and skilled individuals has been shown to benefit an organization, which is why attention should be paid to employee movement in the public sector within the first two to three years. An EVP package safeguards benefits beyond salary that keep the employees assured and committed, making it easy to retain top talent.
Optimizing Recruiting Expenses
A compelling employee value proposition sets the talent acquisition process in autopilot mode where the companies attract and engage more applications from qualified people.
As a result, the company’s human resources department will have to spend less on recruiting agencies, job ads, employee brand marketing, and other talent acquisition costs. By all such means and accounts, the company cost per hire will decrease. Because an EVP also supports the retention of top talent, it reduces the need for further recruitment and training. As many company resources are invested into learning and training new applicants, this corresponds to a sizable sum.
( Also Read: 12 Trends Shaping the Future of Work )
The Components of an Employee Value Proposition
This is one of the indirect yet scalable elements of EVP. This attribute encompasses the employee’s happiness with their pay and additional perks like bonuses and aspects like bonuses, profit sharing. This is the principal constituent of the HR best practices and performance-based compensation. It includes all financial benefits besides salaries.
This aspect of EVP is linked to a batch of additional incentives that come with the job. These include the following:
- Benefits from retirement
- Health-care coverage
- Paid time off
- Holidays package by the company
Benefits packages are most effective when customized to suit the employee requirement concerning the industry, culture, business, and people.
Career Development and Growth Plan
Employees want to know how their employees could help them advance in their careers and how the company can help them do so. This section of EVP consists of the following items:
The incorporation of clear career development plays a crucial role in differentiating the company from others in competition. Employees can use these programs to improve their skills in current positions, navigate organizational ladders, acquire unique insights into their strengths and development requirements, and refine their abilities to progress their careers when chances emerge.
Career development programs involve courses that are sponsored, such as a project management certification or an MBA.IT includes mentorship and career advice besides opportunities for advancement. It offers exposure to work in various cities or countries and possibilities to work on highly demanding projects.
Research reveals that the lack of career development eventually leads to frustration and employee attrition. According to the Chartered Management Institute (CMI), many employees express discontent if the pace of their career growth is slow. The CMI also reported that 42 percent of respondents felt that their careers were stalling without a career development program.
An essential factor influencing employee motivation and happiness and being productive and efficient is their working environment. A healthy work environment boosts productivity and lowers absenteeism, attrition, compensation, and medical claims costs.
A positive work atmosphere fosters team development and improves the company’s performance. The tangible components of the work environment that contribute to a compelling EVP are flexible work hours, work-life balance, and recognition. Awards and appreciation of the elements of delivery management enable a strong team-building and system of communication. Workplace layout is also an inevitable aspect of an ideal work environment.
These workplaces are ideal for a productive workforce because they motivate employees to perform to their full potential and ensure employees’ safety and growth.
Employees care about company culture because their needs and values are aligned with those of their employers. Employees will be more productive and create stronger relationships with co-workers if they work somewhere where the culture is good.
Employees that work in healthy business culture are more likely to trust one another and collaborate. It strengthens strong ties amongst team members at all levels of the organization. In addition to aligning employees with company goals, a healthy company culture encourages team communication and support.
Key Employee Value Proposition Stats
- According to Gartner: Organizations that execute on their EVP effectively potentially reduce annual employee turnover by nearly 70% and boost new hire commitment by almost 30%.
- According to Link Humans: A well-implemented EVP can increase new hire commitment by up to 29%. EVP also raises the possibility that employees will act as sponsors from 24% to 47% on average. It reduces employee turnover by 69 percent on an annual basis.
- According to TalentLyft: Limited career opportunities are cited by 43% of employees as the main factor for leaving a job. 75% of Americans would refuse to work for a corporation with a negative reputation.
- According to Harvard Business Review: Employees who feel their boss is terrible at communicating are 23% more vulnerable to mental health issues.
- According to Deloitte, only 23% of CEOs believe their firms do a good job integrating employee aspirations with corporate objectives.
Phases to Creating a Great Employee Value Proposition-EVP
Consider the following six-component to structure a strong EVP. The employer must first acquire the current and future employees’ impressions of their company’s brand and culture and draft an accurate yet competitive EVP for their employees.
Assessment of the present offering
To create a robust and realistic EVP, the employer must first learn about the current and future employees’ impressions of the company’s brand and culture. Creating drafts of all the components of an EVP could be the first step toward a successful EVP. Examine each element on the EVP list to see how much each organization now provides.
Establish a cross-functional committee to review the study and determine which components people value the most.
Conduct Employee Survey with present and exited employees
Building a solid EVP requires knowing the organizational offerings and their limitations.
To check if your EVP effectively expresses why an individual would want to work for the company, test it with current employees and a sample group from the external market.
Employee surveys can get input from focus groups made up of current employees and any new hires.
Define the critical components of your EVP
Answers to employee questions such as what drives workers to participate more and what improvements they would like to see help the employer prioritize the EVP components. The external factor that is considered for an EVP draft that affects the candidate’s aspiration includes the idea of what salary range and benefits will entice the ideal candidate persona to apply and what kind of career advancement possibilities do these aspirants seek besides what type of workplace culture will enable the top talent to use. The answer to these will give the employer a roadmap to attract and retain excellent employees this way.
Use the comments from multiple focus groups comprising the employee expectation and external market to determine what inspires best performers and use that information to improve the job offer to potential employees.
Finally, evaluating the key components would help the company derive a gamut of benefits that best suit their workforce preference.
Write your employee value proposition.
As writing the vision and mission defines the purpose of the company’s existence, articulating the EVP makes work more exciting. It strengthens the connection between the employer and employee while moving towards the goal that is aligned. It assists the employer in meeting financial commitments and highlights the company’s assurance and respect for its employees.
Launch and publish the company EVP through the proper channels
Now, when an impactful EVP takes the final form, it’s time to find inventive and relevant ways to communicate it to the people the employer seeks to attract and recruit. Start by sharing it through all hiring channels, including corporate websites, advertising, and the interview process, so that potential employees can assess whether or not they are a good fit for the organization.
Simultaneously, the passive labor market will build a favorable opinion of the company’s worth if the employer consistently communicates a compelling EVP through branding, public relations, and social media platform.
Review the results
The market is diverse and dynamic; hence, change is the only constant; therefore, it is imperative to check on employee expectations at several intervals. A routine review of EVP becomes mandatory for every employer to outsmart their competitors in the pursuit to acquire, recruit and retain top employees.
Some of the key indicators that enable EVP evaluation are increased social media engagement on job-related posts, an increase in the number of applications received, and the number of responses from passive candidates.
According to an employee engagement study, how employees feel is often more important than what they earn. This research is based on the linkages between motivation, remuneration, and recognition. Instead of being valued solely based on their financial worth, they want to be appreciated for who they are in their entirety.
The candidate today evaluates the salary inclusive of the compensation, benefits, and perks that come with the position. To put it another way, competent applicants consider the total remuneration package rather than simply the money amount. Flexible work hours, the possibility to work from home, and a good work-life balance are considered the bonus they least expect from their employers.
Therefore, an EVP should be a package of monetary and non-monetary benefits that a company offers its employees. It must be an environment of support, appreciation, and values that a company provides to employees to fulfill their fullest potential at work. A compelling employee value proposition encourages applicants to apply with the company and keeps them motivated throughout the hiring process.