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How to Create a Compelling Employee Value Proposition

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How to Create a Compelling Employee Value Proposition What’s in it for me? How to create a compelling Employee Value Proposition A comprehensive how to guide to help you create and implement an EVP for your organisation Contents Defining an effective Employee Value Proposition (EVP) 3 Why have an EVP? 4 The right EVP recipe 5 EVP in practice Retention 5 Attraction 11 Diversity 15 The five steps to implementing an effective EVP 8 1. Analyse what your employees expect and value in the employment relationship 9 2. Design an authentic and meaningful EVP with the help of your employees 10 3. Communicate the EVP in a way that resonates with both existing and potential employees 12 4. Integrate the EVP as a “business as usual” concept that’s regularly reflected upon by leaders and employees 13 5. Measure and improve the EVP as part of your ongoing strategic cycle 14 How we created Insync’s EVP 16 Worksheet: five steps to implementing an effective EVP 18 How Insync can help 20 Defining an effective Employee Value Proposition “Employees are a “Always treat your company’s greatest employees exactly asset – they’re as you want them your competitive to treat your best advantage.” customers.” Anne M. Mulcahy, Chief Executive Magazine Stephen R. Covey, educator, author and CEO of the year (2008) and former CEO and business leader Chair of Xerox Corporation In case you haven’t yet heard, employee reflecting who you are and what you offer engagement is the key to making your as an employer. It should be created with organisation competitive, profitable and the same care and effort that’s devoted to successful. Due to global demographic your Customer Value Proposition (CVP). changes, the war for talent creating a shift in supply and demand, and the increasing Through Insync’s work, most organisations desire for flexibility in line with the digital we speak to recognise the significance age, finding and keeping engaged and desirability of an EVP yet haven’t employees is a daily challenge. actually defined one. Where organisations have an EVP, a lot of them don’t actively Articulating and implementing your refer to it or embed it into business organisation’s Employee Value Proposition practices. This is a lost opportunity to (EVP) can help you face this challenge leverage the benefits that a strong head on. An EVP states what the EVP creates. organisation offers an employee in return for their contribution. From an employee’s So where to begin? This Insync paper perspective, an effective EVP answers provides you with a how to guide to the question of “what’s in it for me?” with articulate, refine, communicate and respect to working at your organisation. implement a compelling and effective EVP. If your organisation already has an EVP, A strong EVP will drive talent attraction this paper is a healthy reminder for you to and retention. Your EVP should sum up review, refine and reinforce its use. the essence of your brand, authentically Page 3 Why have an EVP? A strong EVP creates competitive advantage: it is unique to your organisation and appeals to the type of employee you want to attract and retain. here’s how: Source: CEB Corporate Leadership Council (2014): CEB’s Employee Insights for Australian reports 2014 24-47% 28% 29% up t0 50% increase in employees reduction in reduction in boost in recommending payment of annual employee commitment from workplace premiums to turnover new employees to family and new hires friends An evp that drives employee commitment and advocacy behaviour will also have a direct and profound impact on the loyalty of your customers. ..of customer ..of customers brand are loyal perception is because of a determined by 70% 41% good employee experiences with attitude people Source: Lowenstein, Michael (2008): Profitably Linking Employee Behavior to Customer Loyalty: Driving Customer Commitment Through Employee Attitudes and Actions. Harris Interactive Executive Brief. Harris Interactive Loyalty: Princeton, New Jersey. The right EVp recipe Contrary to popular belief, an EVP must describe more than pay and benefits if an employer expects strong buy-in and extra employee discretionary effort. Insync’s 2012 Retention Review identified three factors in the organisation’s control that directly impact an employee’s assessment of value: 1. Job enrichment – includes job satisfaction, the level of challenge as well as professional development and career opportunities; the task/job has to be fulfilling and stimulating 2. Structure – refers to organisational systems, processes and resources; the organisation has to provide sufficient infrastructure to ensure the employee has work-life flexibility and feels enabled to do their job well 3. Interpersonal – covers the employee’s dealings with the manager and immediate team as well as the overall fit with the organisational culture and brand Remember that most of these elements actually won’t be associated with any costs for your organisation. However, they need to be deeply embedded into your culture to add real value for your employees, i.e. recognition systems, empowerment or work-life flexibility. Business leaders must assess which of these elements are most important to the organisation when attracting and retaining talent. There is certainly no perfect mix or order of these EVP elements as every organisation is unique. However, some of these elements are used more often than others. EVp in practice retention Recently, Insync worked with a not-for-profit advocacy organisation with employees tending to move on after two years. Employees reported that there was no investment in their skills or an appreciation for the work they did during their time. There was a lack of engagement among employees, linked to job insecurity and a disconnect between employees and senior leadership. Following an all employee survey, Insync conducted focus groups with a diverse group of employees. The focus groups explored and identified how the organisation could refine its EVP. Employees were also asked to rate 10 aspects of the employment experience in terms of importance to them and how well they thought the organisation was doing in each area. From this feedback, a series of recommendations impacting the employee experience were made, including: • ensuring remuneration recognises the increased contribution employees make as they grow in experience • making it a priority to understand what employees do and to recognise their achievements • ensuring key policies such as those relating to time in lieu, travel, employee gifts and training are absolutely clear and applied consistently • helping people understand how everything fits together within the organisation and how employees contribute to the organisation’s success • acknowledging employees and showing appreciation for their contribution; celebrating the “small things” The organisation is now on track with our recommendations to culturally embed practices that are important to employees. Page 5 The right EVp recipe Continued... Figure 1: Key EVP elements promoted by organisations to attract and retain talent In a recent joint research project between Insync and Hays, more than 1,000 hiring managers were asked about the key features their organisation promotes to attract talent. The research findings show that Australian organisations promise challenging work in a flexible environment with career growth opportunities. 49% 44% Structure 48% 56% 46% 17% 43% 39% Health and wellbeing services Job enrichment Competitive salary and benefits Flexible working environment 24% 36% 7% Explore new horizons Contribute to diverse thinking and innovation Interpersonal 28% Professional development opportunities 24% Contribute to making a difference Broad range of opportunities 14% Career growth Employer of choice for women Challenging and exciting work Part of a diverse workforce Work with people who have exceptional skills High performance culture Broad range of opportunities High performance culture 80% Career growth 60% Work with people who have exceptional skills Contribute to making a difference 40% J l o a b n e o n s r r i 20% c e h Part of a diverse workforce p Professional development opportunities m r e e t n n t i Employer of choice for women 20% Contribute to diverse thinking and innovation 40% Flexible working environment Explore new horizons 60% str uct ure 80% Challenging and exciting work Health and wellbeing services Construction Professional Services Not-for-profit Figure 3: Key EVP elements of organisations by organisation size Similar differences in the Insync and Hays data can also be found when looking at the size of an organisation. The results below demonstrate that small organisations mainly focus their offering on challenging and exciting work in a flexible environment, whereas larger organisations emphasise career growth and a broad range of opportunities for their employees. In creating your EVP you should therefore consider your organisation’s scale and budget before you promise the world. Large Small Employer of choice for women Health and wellbeing services Explore new horizons Part of a diverse workforce Contribute to diverse thinking and innovation Broad range of opportunities Contribute to making a difference Professional development opportunities High performance culture Career growth Work with people who have exceptional skills Flexible working environment Challenging and exciting work 0% 10% 20% 30% 40% 50% 60% 70% 80% Figure 2: Key EVP elements of organisations by industry Industry sector was also found to be a driver of EVP content. We can see significant differences when comparing the key EVP elements of three different industries: construction, professional services and not-for-profits. Not only will the specific elements of your EVP need to reflect what’s possible in your industry, you will also need to be conscious of the language, tone and communication style required to attract and retain relevant employees. The Insync/Hays study, respondents were asked to choose the main five features that their organisation promotes in order to attract talent.
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