Employee Value Proposition: The essence of human centric leadership
By Stephanie Rix; HLB Chief People Officer
Your Employee Value Proposition (EVP) is not only a strategic imperative, but a concept that goes hand in hand with a more human-centric leadership by addressing the critical question: "Why should a talented individual choose to work at your organisation over anywhere else?"
As the Chief People Officer at HLB, I understand firsthand how a powerful EVP can transform an organisation by attracting, retaining, and engaging top talent. This article delves into the pivotal role of an EVP, the risks of ignoring it, and provides a practical, step-by-step guide to crafting an impactful EVP.
What is an employee value proposition (EVP)?
EVP is essentially the value an organisation offers to its employees in exchange for their knowledge, skills, capabilities, and experiences, an EVP includes aspects like compensation, benefits, career development opportunities, work-life balance, company culture, and the overall work environment. Essentially, the EVP articulates the overall ‘deal’ an organisation offers both in tangible (pay, benefits) and intangible ways (culture, growth opportunities).
Why is an EVP important?
It is estimated that in today’s labour market, 20% of major corporations have over 1,000 open positions. Furthermore, 75% of companies find recruiting in this environment difficult. The traditional approach—posting generic job descriptions and waiting for candidates to apply—falls short in today's job market.
To thrive in this competitive landscape and attract top talent, EVP is crucial.
Environmental Social and Governance and intergenerational preferences
The alignment of ESG and EVP is crucial in today's job market. A large number of employees consider ESG performance when choosing employment. This preference is particularly strong among millennials and Gen Z, with many prioritising a company's social and environmental commitments. Furthermore, a significant portion of Gen Z candidates view a commitment to Diversity, Equity, and Inclusion (DEI) as essential, and some would even consider a pay cut to work for a company that reflects their values.
This emphasis on environmental concerns is especially pronounced in regions facing climate-related challenges, illustrating the growing importance of aligning ESG and EVP to attract and retain talent.
Attraction of talent
In this so called, "talent war” companies that secure top talent and take a more empathic approach, gain a substantial edge as skilled professionals enhance productivity, drive innovation, and enable agility in a rapidly evolving market. Research by The Josh Bersin Company shows that companies with an authentic EVP are more than five times more likely to exceed financial targets and more than seven times more likely to innovate effectively.
Given their crucial role in driving a company's success, top performers typically have a wealth of job opportunities available to them.
A robust EVP can set your organisation apart from competitors, attracting top candidates whose values and aspirations align with your corporate ethos. According to LinkedIn, 75% of job seekers assess an employer's brand before applying. Therefore, a strong EVP is crucial in shaping the public perception of your organisation as a good place for top talent to grow and contribute.
Retention of employees
Because hiring and training new employees typically costs more than retaining existing talent, retention rate has become a top priority for businesses. The key to success in managing top performers often lies in appreciating their contributions and ensuring they feel valued as unique individuals. A compelling EVP contributes to higher employee engagement and satisfaction levels by creating a work environment where they feel valued and understood.
Employee engagement
Company culture reflects an organisation's values, beliefs, and behaviours, shaping both the employee experience and performance. A compelling EVP that aligns with this culture boosts engagement by clearly reflecting and reinforcing the organisation's core values. This heightened engagement leads to greater productivity and commitment, with Gallup's report showing that highly engaged teams contribute to a 23% increase in profitability.
Enhanced employer brand
A well-communicated EVP strengthens your employer brand, attracting candidates more effectively and reducing recruitment costs. Companies with strong employer brands see a 50% reduction in cost per hire and can attract three times more qualified candidates.
Consequences of not having an EVP
Neglecting to develop a clear and compelling EVP can have several adverse effects on business success:
Step-by-step guide to building an EVP
1. Conduct internal research
Start by looking within. Use research methods such as employee surveys, focus groups, and interviews to understand what your Talent values most about working at your organisation and where improvements can be made. Follow best practices to ensure adequate survey participation rates.
2. Analyse external data
Look at industry benchmarks and competitor offerings to understand what top talent in your field is looking for. This will help you position your EVP competitively. Ensure that you follow best practices in benchmarking and external data analysis to ensure that the insights collected are meaningful and actionable.
3. Define core elements
Based on your internal and external research, outline the core elements of your EVP. These typically include key aspects such as compensation, benefits, career development, work-life balance, and company culture.
4. Align with corporate values
Ensure your EVP reflects your company's mission, vision, and values. Authenticity and consistency are vital for creating a compelling EVP.
5. Craft clear messaging
Develop messaging that clearly communicates your EVP. Use language that resonates with your target audience and highlights the unique advantages of working at your organisation.
6. Communicate consistently
Ensure your EVP is consistently communicated across all channels, including job postings, career websites, social media, and internal communications. Alignment among recruiters and hiring managers is crucial.
7. Continuously refine
An EVP is not static; it should evolve over time. Regularly collect feedback from employees and candidates to refine and enhance your EVP, staying responsive to shifts in the job market and changing employee expectations.
8. Measure impact
Track key metrics, such as retention rates and employee engagement, to evaluate the impact of your EVP. Use this data to make informed adjustments.
Driver of success
In today's knowledge economy, where our people are our greatest asset, a robust EVP is not just a strategic initiative but a commitment to valuing and empowering our employees, helping them reach their full potential and contribute to the organisation's success.
For more insights into creating a compelling EVP and other strategic HR practices, explore our careers page and advisory services.
Related content
