There has been a massive recalibration of expectations of all boards and senior executives (not just in Financial Services) in relation to how organisations
In case you haven’t heard, employee engagement is the key to making your organisation competitive, profitable and successful. Finding and keeping engaged employees is a daily challenge due to: global demographic changes; the war for talent creating a shift in supply and demand; and the increasing desire for flexibility in line with the digital age.
Taking the time to articulate and properly implement an Employee Value Proposition (EVP) can help organisations face these challenges head on.
An EVP states what the organisation offers an employee in return for their contribution. From an employee’s perspective, an effective EVP answers the question of “what’s in it for me?”.
A strong EVP will drive talent attraction and retention. Your EVP should sum up the essence of your brand, authentically reflecting who you are and what you offer as an employer. It should be created with the same care and effort as your Customer Value Proposition (CVP).
Most organisations we work with recognise the significance of an EVP but haven’t actually defined one. Where organisations do have an EVP, many do not actively refer to it or embed it into their business practices.
Why have an EVP
An effective EVP creates competitive advantage. It is unique to your organisation and appeals to the type of employee you want to attract and more importantly, retain. A great EVP also delivers the following benefits[I]:
- 24-27% increase in employees recommending workplace to family and friends
- 28% reduction in annual employee turnover
- 29% boost in commitment from new employees
- Up to 50% reduction in payment of recruitment premiums to new hires
An EVP that drives employee commitment and advocacy behaviour will also have a direct and profound impact on the loyalty of your customers[ii]:
- 70% of customer brand perception is determined by experiences with that organisation’s people
- 41% of customers are loyal because of a good employee attitude
The right EVP recipe
An EVP must describe more than pay and benefits to secure strong employee buy-in and discretionary effort. Whilst each organisation’s EVP needs to be uniquely relevant to its circumstances, our Retention Review research identified three factors within the organisation’s control that directly impact an employee’s assessment of value, and which should therefore be considered in designing your EVP:
- Job enrichment – the job should be fulfilling and stimulating (includes job satisfaction, level of challenge, professional development and career opportunities)
- Structure – the organisation must provide sufficient infrastructure to ensure the employee has work-life flexibility and feels enabled to do their job well
- Interpersonal – includes the employee’s relationship with their manager and immediate team, as well as the overall fit with the organisational culture and brand.
Five steps to implementing an effective EVP
We recommend a five step cycle for articulating and implementing a great EVP. These steps don’t necessarily have a specific start or end point – jump in where you think your organisation is up to.
Related articles and resources
- Article: Developing an Employee Value Proposition
- Article: Harness the power of your EVP
- Exit survey research: Retention Review
- Employee Value Proposition Research and consulting
- Employee Engagement Survey and consulting
- Employee Alignment and Engagement Survey and consulting
[I] CEB Corporate Leadership Council (2014):CEB’s Employee Insights for Australian reports 2014
[ii] Lowenstein, Michael (2008):Profitably Linking Employee Behaviour to Customer Loyalty: Driving Customer Commitment Through Employee Attitudes and Actions. Harris Interactive Executive Brief. Harris Interactive Loyalty: Princeton, New Jersey.