Importance of Employee Value Proposition
Companies worldwide experience pressure to recruit the best candidates. But research has shown that the organization doesn’t pick the candidate, the applicant picks the company. Deloitte reports that the job market is 90% candidate-driven.
1. Employee Value Proposition (EVP) is the value a company offers to employees in return for the value they bring to the organization.
2. In short, it is the balance of the rewards and benefits that employees receive in return for their performance at a company.
3. Many HR professionals now have strategies for communicating their EVP and Employer Brand with future candidates in the hopes of attracting the best talent.
4. The most important elements of EVP are compensation, benefits, opportunities to advance, culture, and the company’s work environment.
An organization’s employee value proposition (EVP) is distinct from an employer brand. The brand is aimed at external audiences and consumers, while an EVP is targeted for employees. A good EVP helps you attract and retain talent. You need to highlight why candidates will want to work for your firm.
The best EVPs broadcast that they offer an employee experience like no other. Without a credible, exciting, and comprehensible EVP, companies can struggle to stand out.
Your EVP is also a way to differentiate from competitors to appeal to your candidates’ values (e.g., respect in the workplace), beliefs, needs, and wants.
Along with establishing perception and attracting talent, creating, and following a great EVP can help you grow your business. Simply put, businesses cannot grow without a talented workforce to run the show. When you manage to attract and retain the right talent, they will help boost your business and ultimately your company’s bottom line.
There are two sides to an Employee Value Proposition:
Acquisition of talent is difficult
Recruitment has faced significant challenges because unemployment remains low in developed countries. In 2019, 70 percent of respondents to the Global Human Capital Trends survey cited recruitment as an important issue, and 16 percent reported that it was one of the three most urgent issues their organization would face in 2019.
In the summer of 2018, the quit rate in the US, the percent of employees who leave their jobs each month, rose to 2.4 percent, the highest it has been since 2001.
On an annual basis, this means that more than 25 percent of the US labor force changes jobs each year.
When companies find that acquisition of talent is tough, retention becomes more significant. Having a good EVP is not only essential in these times of competitive hiring but could make a difference in the quality of your workforce.
The experts recommend promoting your employee value proposition (EVP) as part of your employer brand in your recruitment marketing.
Gartner Research reported that “The employee value proposition (EVP) portrays how the labor market and employees perceive the value employees gain by working in an organization. Many EVPs are ineffective or difficult to maintain. Some comprise the wrong attributes or fail to differentiate from competitors. Others show a significant gap between promise and reality, resulting in reduced employee commitment.”
Some human resources experts go so far as to state that an EVP is the most important part of the recruitment process. When delivered well, it tells the candidate why they should apply for a job with a company and what’s in it for them. An excellent EVP is also a great tool for retaining talent. Companies with strong EVPs usually see higher retention rates among their quality employees.
Read more about how to attract top talent at Five Powerful Strategies to Attract the Best Employees.
Some companies, like Bain & Company, tout with their EVPs extra perks such as externship opportunities and parental leave.
Global PEOs are an asset
If you are expanding internationally, consider making a Global PEO solution part of your company and its EVP. Global PEOs can use their economies of scale and local market connections, relative to client companies, to access better insurance and other benefit packages for employees in various countries.
There are also advantages to independent contractors and freelancers for a company using a Global PEO. If a client company has an ongoing relationship with a Global PEO, that contractor or freelancer now has the choice of going on the payroll of the Global PEO.
That way, the worker doesn’t have to file his own taxes and benefits. It also means that the freelancer can now work in any country in the world, so they can become a digital nomad if they like, while still following the law. Some workers would fine that attractive.
Having a Global PEO will be an asset to your employee value proposition and allow you to differentiate from the competition. Employees can be guaranteed that the firm complies with all local employment laws. This means, for example, that the company understand annual and sick leave entitlements, redundancy payments, and when employment may be terminated. With a Global PEO, employees can rest assured they will receive all their employee protections.
Also, Global PEOs have local employment knowledge. Many international businesses don’t know how to benchmark their salaries and other benefits in countries in which they have never operated. For example, Christmas bonuses are customary in some countries, but not legally required. Global PEOs are up to date on these issues, and will ensure that employees receive a competitive compensation package. This makes a Global PEO an advantage to your employee value proposition.
Examples of Good EVPs
Research firm Gartner lists five fundamental elements of an EVP as follows:
- Work-life balance
Marketing experts have evaluated the best EVPs. A lesson can be learned from each one.
Chevron is a multinational energy corporation that’s active in more than 180 countries. On their careers page, the energy employer states: “At Chevron, you’ll team up with some of the best and brightest in locations around the world to create innovative energy solutions.” They also promise a “truly global and collaborative” work experience to potential and current employees.
Its EVP challenges commonly held assumptions about an oil company. A commitment to diversity in a traditionally male-dominated industry is what makes Chevron’s EVP stand out next to competitors. A recent EY report shared that only 11% of the top global oil and gas senior executives are women—and Chevron aims to do something about that.
Bain & Company is an American management consulting company and one of the most prestigious in the industry. The consultancy is listed as number one on Glassdoor’s Best Places to Work list and is a known leader in collaboration.
The Bain & Company career page states: “Picture yourself at one of the world’s best places to work, surrounded by teams and people who challenge you, support you, and inspire you to be extraordinary.” They go on to emphasize the opportunities to collaborate with diverse teams across various departments and offices around the world.
Unilever is a British-Dutch transnational consumer goods company and the seventh most valuable organization in all of Europe. The company emphasizes the opportunity to work alongside brilliant, inspiring leaders, with four pillars designed to bring the EVP to life.
Their website breaks it down like this: “Unilever is the place where you can bring your purpose to life through the work that you do, creating a better business and a better world. You will work with brands that are loved and improve the lives of our consumers and the communities around us.”
When asked about their efforts to launch a new EVP, Unilever’s Head of Global Talent Attraction and Employer Brand explained: “At the heart of our value proposition is that we build leaders. We develop leaders for Unilever, and Unilever leaders go on to be leaders elsewhere in the world.”
This EVP is bound to attract and retain people who are smart, passionate, creative, and looking to make an impact on the world.
Each of these companies emphasizes in their EVP what their values are, whether a commitment to diversity (Chevron), teams who challenge you (Bain), improving lives (Unilever) or smartest (Apple). You can learn from these examples how to write an EVP that summarizes your values, that epitomizes the qualities of your workforce, and the purpose of your product.
Developing a strong EVP is crucial to your recruitment. It will be the centerpiece of your recruitment marketing campaigns. When you articulate the EVP and what an employer provides – pay, benefits, career opportunities, you are highlighting why an individual will want to work for your company.
In addition to defining your EVP you need to promote it effectively on many channels to reach the candidates you are seeking. These channels include the company website, recruiting events, email campaigns, career sites, and social media.
Tools to promote your EVP and help with recruiting include your own career site and setting up an employee referral program.
Trends to retain talent
A strong EVP also helps you retain workers in a highly competitive job market.
Each quarter, Gartner’s Global Talent Monitor is sourced from about 30,000 employees in over 40 countries and regions to offer the most authoritative look at the latest global and country-level trends so HR leaders know what attracts, engages, and retains talent.
1. Employees’ confidence in the business outlook and perceptions of job opportunities remained stable this quarter.
2. More employees were actively seeking new employment in the third quarter of 2019 than in the second quarter of 2019.
3. Employees’ discretionary effort and intent to stay at their current organizations were unchanged globally.
4. Compensation, work-life balance, and stability remain the top job attributes employees look for in a new employer.
In this climate when many employees were seeking new employment, a strong EVP is more essential than ever.
One of the most important questions to ask when building your employee value proposition, is what do we offer employees in exchange for their hard work, energy, and effort?
When you understand your employees and their needs, you can build a stimulating EVP. You will emphasize your firm’s compensation, benefits, work-life balance, and unique characteristics such as the Global PEO.
With an excellent EVP, you will recruit the best talent and build and outstanding workforce. These employees will build the strong foundation for your success.