A Compelling Employee Value Proposition: The New Non-Negotiable
One of the greatest challenges for all businesses right now is retention of their people – and at costs the business can afford – and being able to attract new people.
The pandemic has given rise to a level of flexibility that employees have never had. Work from home, flexible hours, minimal time in the office, and the emotional and financial benefits that come with those arrangements have been considerable. No wonder so many people do not want to return to working full-time from a company office with the associated commute and often disconnect from family as a result. Related to this shift is the cost to the company of rising annual leave accruals as employees choose to take less annual leave. Many companies are finding they have to pay more to attract new talent. In this new environment, there needs to be a balance.
The impact of this flexibility and employees being very selective on a raft of new considerations, is the driver behind the need for companies to introduce new strategies for how they attract and retain their people.
What is an Employee Value Proposition?
An employee value proposition (EVP) is the new non-negotiable when considering your people strategy.
According to PwC research of 1800 employees, a company ‘that doesn’t have an Employee Value Proposition is not going to be able to attract and retain critical talent’.
An Employee Value Proposition answers the simple question of why an employee would want to work for your company, over other alternatives and offers? What is the value proposition your company offers that will attract and retain the right people?
In the same PwC study, perhaps not surprisingly, it was found that 38% of employees were planning on leaving the business within the next 12 months, whilst 48% of C-suite leaders in the same business had no plans to adjust or revisit their employee value proposition.
There is a big disconnect between what people want from the company and how well they think it is delivering against their wants and needs, and what the leadership team think they want. That disconnect needs to be addressed if companies are to retain their existing talent and be competitive enough to attract new people to the business.
With contractors and outsourced resources also being part of this mix, the company’s value proposition has an even wider reach.
So, what sort of considerations do companies need to have when assessing their people value proposition? What are some of the factors that their people value?
How highly do employees value these factors?
Career Path & Development
Business owners and leaders need to be mindful, particularly in smaller businesses that don’t have endless funds to lure new talent and retain existing talent, that understanding the motivations and fundamental needs of employees in the current environment is essential.
The best way to do that is to approach your team in a very objective and structured way, to uncover what they value most in an employer, what would make them stay or leave, and rate their scores on a number of values applicable to today’s working environment.
In many cases, people leave because they can’t see future development or career path. What many employees miss is they can’t see the next position for them in the company (or the next spot in the org chart), but they fail to understand that growth and development doesn’t need to be up a vertical hierarchy. This is particularly so in small companies.
Extended roles, greater responsibility, increased remuneration and bigger titles worthy of the work they are doing, are all career progression, even if the employee can’t ‘see’ this ongoing opportunity at the time. If your team understood the real potential for progression and development in your business, they would no doubt stay in your business for longer. Just because a role doesn’t seem to exist today, doesn’t mean they won’t be owning it in the future.
Culture is a Feeling
People are attracted to, and leave companies, because of the culture. Culture of course incorporates a wide array of factors, like purpose, values, leadership, respect, communication and behaviours. Today we need to factor in flexibility. How important are all these factors to your people, and why?
According to Gartner research of 5,000 employees conducted in 2021, the traditional approach to EVP focuses too much on what the company gives the employee, rather than why.
According to Gartner as a result of this research, value comes through feelings, not features.
I think this point is critical. How does working for your company make your people feel?
In a 2019 article on Builtin.com (and updated in 2022) by Kate Heinz, she found that 46% of job seekers cite company culture as very important when choosing to apply to a company. Likewise, 47% of active job seekers cite company culture as the primary reason they are looking for work elsewhere.
Ask The Right Way & You Shall Receive
When you dig deeper, you get the gold that will really help improve on your company’s EVP. In my experience, when given the opportunity, people will share honestly and in detail what they love about a company, and what they feel could be improved. There are two levels of feedback – the emotional level, and the more objective level. Some are relatively easy to address and others will require a bigger shift in the company and how it is run. Culture is the big overarching challenge for business owners and leaders, and how it makes people feel seems to be the most important factor to get right.
There are other important factors to consider in this EVP mix and only your team can articulate what they are.
If your company is going to manage the people challenge it is currently facing, the development of an appropriate strategy to align your team’s values with those of the business, is essential. It is a key component of an overall people strategy in a rapidly changing employment environment.
Putting Your EVP to Work
It’s all well and good to have independent, in-depth interviews with your team to uncover their perceptions, preferences and non-negotiables. You need to decide as a business what your preferences and non-negotiables are, because there does need to be a balancing act.
In summary, here is a quick overview of the steps to take to ensure your EVP works well for your people and your business:
- Have an independent person conduct your team interviews. You will receive more in-depth and useful information as questions will be structured in a way that extracts more feedback, and your team will generally be more comfortable with someone who isn’t a colleague.
- By having a structured process, you will be able to put measures around the most important factors in your company’s EVP. You must be able to measure what you are assessing, as a benchmark for future development.
- Decide whether you have any non-negotiables in your business (for example, number of days working in the office; or annual leave accruals).
- Present your findings back to the team. You need to be transparent with this exercise and continue to engage them once they have taken the time to provide their feedback, insights and ideas.
- Outcomes – you need to tell your team what you are going to do to enhance your company’s EVP and their experience being part of it.
- Give an implementation plan. Engage key team members in this process as appropriate (discuss with them first) and get things in motion. As the leader, it is essential that you are the driver of this process.
- Be prepared to negotiate. Go back to point 1 and know what your non-negotiables are. People need to be paid for their contribution, value and given recognition for good performance. On the flip side, remember that no-one is indispensable. If you can no longer meet remuneration demands, you will have to be prepared for people to leave. It is a cycle after all.
- Finally, you must deliver. All of this is pointless, and highly counter-productive, if you fail to follow through. Enough said.
Even in this market, there’s always more than one plan and attracting and retaining the right talent is a cycle. A strong EVP will help give you a competitive edge in the talent challenge!