We’ve all seen the headlines about The Great Resignation, and for employers, the massive uptick in labor churn has unfortunately made those headlines all too real. Not only are employees quitting their jobs at a higher rate than in the past, but there’s also been a cultural shift in the labor market. One way to address this massive shift is to create an attractive employee value proposition (EVP).
In previous decades, downsizing and offshoring put employers in control. While those employer-favoring factors had been starting to diminish, COVID-19 firmly put workers in control by depressing participation in the labor force. Some experts have pointed to COVID stimulus checks as the reason for the drop-off, but as we get further away from short-term pandemic support, employers also need to consider long-term structural shifts: millions of early retirements during the pandemic, a lack of childcare options for parents who can afford to stay home, ongoing COVID concerns and rising entrepreneurship, according to data from the US Chamber of Commerce.
Learn how to build a compelling EVP with recruiters from Top Notch Personnel, a reputable staffing agency in Wichita, KS.
What is an Employee Value Proposition?
In the same way that a company wants a valuable return on its investments, people want a return on the time and effort they put into a job. A good employee value proposition lays out exactly what employees get in return. While it should lay out monetary compensation, it must go beyond that. A recent post-pandemic poll by Gallup showed that, yes, people want good pay from their new job, but other priorities include support for overall well-being, ability to leverage unique strengths and job security.
Why is an Employee Value Proposition Important?
To skeptics, developing an employee value proposition might sound like an indulgent HR exercise. However, creating an attractive employee value proposition can have real tangible benefits:
Improve Recruitment and Retention
If an organization doesn’t have an employee value proposition — it will have a difficult time attracting top talent. The best job candidates understand their value and if an organization doesn’t explain how it offers value in return, candidates will likely move on to another company.
The lack of a clearly identified employee value proposition also makes it harder to keep employees. An informal approach increases the odds of a disconnect between the company and employees, possibly causing them to start looking elsewhere. Given high cost of turnover, the cost of maintaining a defined employee value proposition can seem low by comparison.
Asking the best employees why they like working for a company can provide good source material for a value proposition. If a company can clearly identify and state why top talent sticks around, the resulting value proposition can help to both keep top talent and attract it.
Stand Out from Competitors
With job seekers having plenty of options, employers are increasingly frustrated with turned-down job offers. Not having a clear employee value proposition can be one non-financial reason why some employers are missing out on top talent. Companies should assume that every person they interview has another potential offer, possibly from a competitor.
A good employee value proposition lays out why a top candidate should choose an employer by being strongly tied to the company’s overall brand. For example, a manufacturer of baby products should outline employee benefits that support working parents of young children. This kind of connection gives employees a strong sense of purpose and direction, boosting productivity in the process. Employees inspired by a company’s overall culture are also more likely to offer up creative solutions. If an employee value proposition and company culture are mismatched, employees may be happy with the compensation they are receiving, but they are less likely to grasp a shared vision that translates to a competitive advantage.
Additionally, today’s consumers are acutely aware of how companies treat their employees. Companies that synchronize their employee value proposition and overall brand gain an air of authenticity and integrity that translates into a serious competitive advantage.
Reduce Employee Turnover Costs
One area where an employee value proposition can deliver concrete results is in the reduction of turnover costs. According to research from Gartner, organizations that deliver on an employee value proposition have decreased employee turnover by slightly less than 70 percent. The adoption and delivery of an employee value proposition is also tied to higher workforce engagement and motivation, both of which reduce turnover.
The 5 Components of an EVP
There are five primary components to an employee value proposition:
Money talks, as they say. If your organization isn’t offering competitive pay, it should be prepared for high turnover. Workers understand that there are a lot of jobs out there right now and many have the luxury of taking a chance on a higher-paying opportunity. However, compensation isn’t the end-all, be-all of a good employee value proposition.
In the past, employees may have tolerated working in a dead-end job, because it provided stability or a good paycheck. However, many of today’s employees aren’t satisfied with working the same job for 10, 20, 30 years or more. If your company can’t offer many advancement opportunities, it should still be able to offer career and personal development through initiatives like supporting ongoing education, cross-training, and sending employees to industry conferences.
People want to work in a job situation where they can leverage their individual strengths.
this type of situation not only gives them a sense of pride, but it also helps them to feel valued as individuals and therefore less replaceable.
Research shows that two main reasons why people quit their job are poor relationships with either their boss or their coworkers. For employers looking to create a good employee value proposition, this means prioritizing company culture and eliminating any individuals contributing to a toxic workplace.
Today’s employees, and younger generations in particular, prefer to work for an organization that shares their same values. An employee value proposition can manifest company values by supporting social initiatives such as sustainability or by offering benefits like childcare support.
Create a Compelling EVP that Attracts Talent
As with just about every other HR initiative, an employee value proposition should be an extension of the company mission statement, values, vision, culture and brand. It should be clearly defined and speak to an organization’s competitive advantages.
Developing employee value proposition should also be an ongoing process. Not only do economic factors and forces in the labor market shift, but also employee attitudes can change over time. And employee value proposition should be periodically revisited in order to reflect key changes.
Define Your EVP & Its Objective
Begin defining your employee value proposition by identifying what your company is offering its employees. In addition to considering pay in benefits, it’s also important to consider things like opportunities for advancement, career development opportunities, employee engagement initiatives, employee satisfaction and organizational values.
Existing offerings should then be compared to company values. Any disconnects should be highlighted for discussion. Talent acquisition objectives should also be considered so that they are clearly addressed.
Collect Feedback from Current/Previous Employees
Employee surveys, exit interviews and internal focus groups are all great resources when developing an employee value proposition. When getting feedback from current employees, it’s important to ask the right questions. Find out what motivates them and what improvements they would like to see. Ask how the company could support their professional development. Find out what top employees wish you had, including what your competitors may offer their employees. Be appreciative and recognize they may leave you for those reasons. Make a noticeable effort to make the adjustments you can meet or exceed those expectations.
It’s also important to speak with previous employees and review any feedback and employer review sites like Glassdoor. This feedback, especially coming from Glassdoor, can be more candid. It can also skew more negatively, as disgruntled former employees are more motivated to leave reviews.
Identify Competitive Advantage & Key Points to Highlight
If your organization has any competitive advantage in the labor market, it should be highlighted in your employee value proposition. For example, if the majority of your employees are desk-based, you may be able to attract more top talent by highlighting any hybrid and remote work arrangements.
It’s also important to consider the types of candidates you are looking to hire. For example, if you are looking to hire more entry-level employees than experienced workers, your employee value proposition should emphasize career development.
Draft and Revise Your Employee Value Proposition
After you’ve conducted your research and clearly defined the main points of your employee value proposition, you should draft a formal document that outlines your proposition. Your formal employee value proposition should be written to attract top talent by being easy to understand, unique and inspirational. Be sure your draft clearly reflects both what your company offers and how it meets the needs of your ideal candidate.
After drafting your employee value proposition, share it with organizational stakeholders and collect feedback. Make revisions until the majority of stakeholders are satisfied, while ensuring your value proposition is still accurately reflected.
Schedule regular reviews of your proposition to ensure it remains current. Periodic reviews should determine which parts of the proposition are effective and which parts need to be changed.
Promote the EVP Across Appropriate Channels
If you develop a formal employee value proposition and no one is around to see it, does it truly exist?
Start by promoting your proposition internally through company emails and the company intranet. Consider incorporating key highlights of your proposition in e-mail signatures and internal posts. Ideally, your proposition should become part of the company’s cultural fabric.
Externally, you should promote your employee value proposition and the company website and social media. You should also develop a condensed version that can be incorporated into future job postings.
Attract Talent with Top Notch Personnel
Although it is highly effective, an employee value proposition is just one aspect of your overall talent acquisition strategy.
At Top Notch Personnel, we are dedicated to helping companies win the war for talent in this difficult labor market through comprehensive workforce solutions. If you are finding the current climate a bit challenging, please contact our staffing agency in Wichita today for a consultation. Our Wichita recruiters can devise a workforce solution that is custom-tailored to suit your needs.