Employee Value Proposition, or EVP, is invariably confused with employer brand, but there are key differences. True, both relate to the perception of an organisation, but they are not the same. Employer brand is how you are seen externally as a potential employer: your image and reputation. Whereas EVP is the value employees receive by working for you. One is perception, particularly external, the other is received value. Developed as a concept after the rise in employer branding, EVP typically falls under the HR remit, but it crosses all boundaries from Board level down.
It’s not all about money…
Let’s break things down a little more. The Employee Value Proposition is a set of associations and offers given by an organisation in return for the skills, experience and the capabilities they bring to the company. An EVP is employee centred and covers everything that an employee gets out of being part of a company. Money is the most obvious example, particularly with continuing cost of living rises, but surprising to many, it isn’t always the one that employees value most. There are other factors that employees regard as the key benefits that they get from working in a place:
- Career opportunities and promotion prospects
- Job security
- Fun working environment
- Challenging work and projects
- Interesting and industry leading colleagues
- Being part of a recognised and respected brand
- Great benefits
- Inspiring leadership and management
- Flexible working environment
- Travel opportunities
- Earning potential
It even includes everything from the dress code, working hours, engagement and feedback policies, what your policies are around IT usage, review processes and how close your office is to a decent coffee shop or gym. All these components set an agenda for your business. Are you relaxed or rigid? Are you led by individual people or a corporate plan? These are questions you should be asking yourself as you consider your EVP.
Your EVP should retain your current workforce, as well as attract new talent
Clearly which of these benefits is attractive to employees depends on the type of person you are looking to hire; a young, unattached Millennial is likely to have different drivers to a Baby Boomer approaching retirement, to use one example. Recognising the EVP demands and desires of your current and future workforce is crucial to your success in attracting and retaining the best employees.
It is the scope of EVP that sometimes confuses people, and often they latch onto high-profile stories from successful companies as examples on how to succeed. However, these typically focus on an equally obvious big ticket item, such as the eponymous pool table in the office, the bean bag filled ‘imagination zone’ or a slide between floors. People all too often imagine that by adding a pool table all will be well, everyone will be happy and they can otherwise carry on regardless… ‘Google does it, it must work!’
There are several issues with such an approach:
- It only works if it’s appropriate to your culture. Slides, bean bags and pool tables are fine if your company is relaxed, creative and free-wheeling, not so well if you’re a Magic Circle law firm, or worse an undertakers!
- The EVP has to fit the desires of your employees. Having a ‘cool and fun’ environment is great for the workers in Google, Apple and Shoreditch/Silicon Valley start-ups, but maybe that isn’t the biggest driver for the typical employee in the NHS, or a City bank or an engineering company.
- No one change fixes everything. Even if everyone wants the fun environment and it fits your culture perfectly, it’s not the only element. As we mentioned above, it’s going to be one of several things your employees are interested in. Maybe it’s the most important, maybe not, but it won’t be the only one.
Know your audience
The critical requirement is to understand your audience. As we’ve said, people value different things. You need to ensure the people you need want what you’re giving them. Just like in any market, research beforehand is crucial. Conduct detailed, and ideally anonymous and therefore honest, internal surveys. Ask what they value in working for you, and what they’d like. How do these values compare? Ask them to rank a list of values. Ask for open feedback. A survey can cover a lot of ground and tell you a huge amount about how your staff are, what they want and how to make them more engaged and happy. Furthermore, make sure that you ask the most honest employees you have… the ones you’re about to lose. Never neglect an exit interview. Sure you may need to filter some bitterness, but most people if asked with clear and genuine humility what it is that has led to them leaving will tell you. This is great insight and can help avoid numerous other potentially costly losses. Keeping this research ongoing with regular checks and updates from employees means you will be able to keep this close alignment with the employees’ wants and needs, especially with new recruits who may bring different values to the table. Regular analysing of employee performance and productivity after implementing a new EVP will assist you to see what works in real life and what should stay on the drawing board.
It’s important to note though that the feedback you get from such employee surveys will probably be inconsistent, and the larger and more complex the company the worse it gets. But there will be common messages if you look for them, values everyone shares and looks for. Then there are the values you want in your company. If a significant proportion of the workforce is putting ‘money’ high on their list and you’re running a not-for profit, perhaps you have the wrong team! Conversely this can start to guide you on how to shape your EVP to attract the type of people you do want.
EVP is not simply a reactive response to keep your employees happy, it shapes your company culture and ethos. EVP should be a balance between what the employees want, creating the company they want to be a part of and what you want as the employer, thereby attracting the right people. So when looking at EVP always consider what do you value? What kind of people do you want working for you? Who are you competing with for candidates and what do they offer their employees? What kind of organisation do you want to be? By deciding the answers to these questions you will be able to put your EVP in the context of your overall business plan and strategies. You may need to change your unmanaged EVP into one aligned with your image as an employer and what your niche and values in the market are. But remember, not managing EVP doesn’t mean it’s not there, it just means you have no control over it.
You don’t have to be extreme, but make sure you’re consistent
Throughout the process remember that to have a successful EVP your company does not have to go to the extremes of the spectrum like Google. You need to find your personal middle ground and balance. The model that fits you, your culture, your industry and your people. This does not mean you should have different elements from different approaches. You need to ensure your culture is aligned to your company values and build your policies and employee culture around the goal you are trying to achieve. Having some of your company policies fun-centred and others strict will likely confuse people. If you allow your employees to wear shorts to work and have beanbag chairs, but are miserly with giving time-off, people will see that your company is inconsistent and will have conflicting views about it. This makes them uncomfortable. They expect the values, image and approach of your company to all mirror each other. If they do not, people will get be unnerved by the seemingly chaotic lack of consistency.
EVP is underused as a tool to boost productivity
Recent surveys suggest that less than half of companies have any plan or engagement around their EVP and less than a quarter have any long-term plan for improving their EVP. All of these companies are missing out on this opportunity to increase employee engagement and attract and retain top talent. Organisations which use their EVP to their advantage are five times as likely to report that their employees have heightened levels of engagement and twice as likely to achieve financial performance above the level of their peers when compared to organisations which do not use their EVP. HR expert Richard Veal, has said that “The employee value proposition is one of the best tools available for companies… Unfortunately,” he went on, “to many organisations, the EVP remains a hidden gem that is unshaped, overlooked or not utilised to its fullest extent.”
The EVP a company has is a promise to help employees meet their needs, exchanged for their part in the running and continuance of the business. The best companies go past discussing their business in terms of the programs they provide and their value. The best companies find out how to meet their employees’ expectations. EVP is a wonderful management tool, most of all when it is used and communicated effectively. An effective EVP needs a “communication plan” and a “strong employer brand strategy”. By improving not only the provision, but the communication of the rewards that your organisation offers you can have a far greater impact on employee mind-set and satisfaction. The employees, able to see the rewards their contribution to the company will bring will be more encouraged to adopt the behaviours which lead to reward and thereby aid the brand and the company.
So what are the benefits of a great EVP?
The outcomes of having an excellent EVP are not just increased employee satisfaction. It helps employers attract, motivate and retain employees and helps employees gain an overall view and emotional connection to the community and culture within a company. The EVP of a company is becoming an increasingly critical tool for companies when attracting talent, especially with the market now wider-spread and more competitive than ever. A clearly thought-out and well-articulated EVP is shown to be directly linked to better financial outcomes and stronger results from reward programmes and talent management. According to research by the Corporate Leadership Council, a well-planned EVP can improve the commitment of recent hires by nearly 29%, increases the likelihood of employees acting as representatives and spokespeople for the company by up to 47% and reduces new hire compensation premiums by up to 50%. An effective EVP allows companies to source labour from the market more efficiently, even from passive candidates and people who are not actively job hunting, especially useful in an increasingly difficult talent market. It reduces the cost of attracting and retaining the best people: According to the Corporate Leadership Council, companies with unattractive EVPs require a 21% premium to hire employees, while those with attractive EVPs require only an 11% premium. It also decreases staff turnover, and if you don’t have to recruit new replacements you don’t incur costs of dislocation, recruiting and training. It increases engagement, energising the workforce and improving morale, performance and impact to the bottom line. Finally, a strong EVP creates and adds to the employer brand, aiding you in appealing to different market areas, such as foreign candidates, and forming a universal brand which can appeal to different people.
In short, your EVP is happening regardless of what you do. Your choice is whether you engage with it, understand it and lead it, or leave it to chance. Given the understanding it can give you of your workforce, the ability it offers to lead the agenda, and the benefits it can bring to everything from employee satisfaction, to brand position and bottom line income, isn’t EVP something you should be considering? And once you’ve considered it, do something about it…
Please get in touch if you would like more information about improving EVP at your business.
