Decades ago when someone entered the workforce they typically found a job and stayed put. A reasonable salary and job security kept them loyal for the long-term. That’s not as common today, especially among younger workers. Rather than staying in one place, they expect to shop around and explore their options. Remaining in the same career all their working days may even seem far fetched.
At the same time business technology is transforming the world of work. Your employees can work from anywhere. Your organization needs to do more to recruit and retain talent. An employee value proposition can help you attract and keep impressive employees. Read on to learn more about the employee value proposition (EVP) and its impact.
What is an employee value proposition?
An employee value proposition (EVP) refers to the unique set of benefits and rewards your organization offers its employees in exchange for their skills, capabilities, and contributions. It captures both tangibles and intangibles that make your workplace attractive to employees.
With EVP contributing to employee engagement and their overall satisfaction key components can include:
- Compensation and benefits (e.g., salary, bonuses, health insurance, retirement plans, stock options, and additional perks such as gym memberships or onsite childcare)
- Opportunities for career development and growth (e.g., skill enhancement, professional development, promotions, and a clear path for career advancement)
- Work-life balance (e.g., flexible work arrangements, remote work options, and policies that support family and personal time)
- Company culture and values (e.g., creating an inclusive and supportive company that offers a sense of purpose)
- Recognition and appreciation (e.g., offering awards, praise, or other recognition)
- Work environment (e.g., curating a comfortable physical workspace, access to necessary tools and resources, and a safe and conducive working environment)
- Leadership and management style (e.g., effective leadership, transparent communication, and fair management practices)
Intended to excite individuals about your organization, a strong EVP supports a positive employer brand. Capturing how you meet employees’ wants and needs, the EVP is like a promise you make to your people.
For example, a hypothetical credit union might state:
“Join Q Credit Union and be part of a close-knit community where your work transforms lives. Experience growth through mentorship and advancement opportunities, collaborate in a welcoming environment, and enjoy flexibility for a balanced life. We reward your contributions with competitive pay and benefits, celebrate diversity, and empower you to make a difference through community engagement. Choose Q for a fulfilling career that combines purpose with innovation and builds on our legacy of stability and trust.”
An employee value proposition (EVP) is like a promise you make to your people. Click To TweetWhy is EVP important?
Whether your people are coming into your office, working remotely, or doing both, employee experience shapes business performance. McLean and Company’s 2023 HR Trends Report found that those who scored high on employee experience see benefits across their organization:
- 2.4 times higher DEI performance (75% vs 31%)
- 2.0 times higher ability to quickly change (76% vs 38%)
- 1.9 times higher innovation (80% vs 42%)
- 1.8 times higher workforce productivity (89% vs 57%)
- 1.4 times overall organizational performance (84% vs 58%)
The EVP sets expectations for employee experience as it outlines what employees can expect to receive in return for their hard work, skills, and time. Yet, in McLean’s survey, only 22% of the 1,075 business professionals surveyed said their organization had an EVP.
That’s too bad as EVPs offer many benefits. According to McLean’s study, those with an EVP were 1.2 times more likely to be high performing at recruiting quality talent.
Gartner has also found delivering a strong EVP can “attract significant talent and boost employee engagement.” The consultancy states an effective EVP can:
- Help you reach 50% deeper into the labor market
- Reduce the compensation premium by 50%
- Decrease annual employee turnover by just under 70%
- Increase new hire commitment by nearly 30%
A well-executed EVP can also nearly double (24% to 47%) the likelihood that employees will refer people to your organization and act as their sponsors. With word of mouth playing a major role in human behavior, it can also help with filling vacancies. This is because an engaged and motivated workforce would love sharing their experience, thereby improving new employee acquisition.
Developing an effective EVP can also help re-engage your current employees. How? Because you have to ask them first what they value and need. You empower them by inviting them to help you understand what you can do to set your business apart.
Understand the value of EVP
Just as customers are attracted to a company’s products or services based on their value, employees are drawn to an organization based on what it offers them. A strong EVP helps a company stand out in the job market, attracting talented individuals who are a good fit for the organization. It also helps retain current employees by ensuring they feel valued and fulfilled in their roles.
We’ll talk more in the next article in this series about how to establish your EVP and share more real world examples of effective ones. In the meantime, know that defining your EVP requires employee feedback. Sogolytics can help with that.
Ready to start collecting feedback to transform your employee experience? Contact us today!
