Crafting an effective employee value proposition to attract top talent
In today’s competitive job market, securing and retaining top talent is paramount for organisations. A pivotal step in achieving this is the development of a compelling Employee Value Proposition (EVP).
The concept of an EVP draws from the marketing principle of a ‘Unique Value Proposition (UVP),’ which defines the distinct value a company offers its customers. In the workplace context, an EVP conveys the value and benefits an employer provides its employees.
Much like a UVP sets a product or service apart, a well-articulated EVP can distinguish an organisation, making it more attractive to talent and solidifying its status as an employer of choice.
Surprisingly, a KPMG report found that only 18 per cent of organisations differentiate their EVP from competitors, despite evidence that a robust EVP triples the likelihood of achieving high performance. A strong EVP also plays a crucial role in employee retention, with Gartner research indicating that organisations successfully delivering on their EVP can reduce annual employee turnover by nearly 70 per cent.
It’s important to note that EVP and employer branding are distinct yet interconnected concepts. An EVP is inwardly focused, highlighting the benefits a company offers its workforce in exchange for skills, setting it apart from other employers. Beyond compensation, an EVP communicates why an organisation is ideal for employees to flourish, find purpose, and make unique contributions. It encompasses tangible and intangible elements, from company values, leave policies, and culture to rewards and growth opportunities.
In contrast, employer branding is outward-facing, reflecting how an organisation presents itself to current and prospective employees. It attracts, engages, and retains talent by conveying what it’s like to work for the organisation and why it’s an appealing place to build a career. Employer branding mirrors the EVP and includes aspects such as reputation, culture, diversity, values, and the organisation’s image as an employer.
When employees are proud of their association with an organisation, they become enthusiastic brand ambassadors, naturally drawing like-minded individuals to the organisation. A 2021 PwC report underscores this significance, revealing that 87 per cent of Australian job seekers thoroughly research an employer before considering applying.
Alignment between EVP and employer branding is crucial. Your EVP must consistently fulfil the promises made in your employer branding. Any inconsistency between them can erode customer, candidate, and employee trust, damaging your brand reputation.
Aligning your company goals to your EVP
Many leaders tend to focus on immediate, tangible aspects like compensation or flexible working arrangements when attracting and retaining talent. However, these factors are easily replicable by competitors and have limited long-term impact on retention.
A more effective approach is to align talent strategies with long-term company needs. This involves balancing material incentives with opportunities for career growth, fostering a sense of community, and instilling meaning and purpose in employees’ work.
To ensure a consistent employee experience, leaders should align with the EVP, reducing variations caused by individual circumstances or evolving priorities.
Developing a compelling EVP
To create a compelling EVP, define clear objectives aligned with company goals. This ensures that input from stakeholders, leaders, and employees aligns with your organisation’s mission.
Gather data on your current offerings and how employees perceive them, identifying gaps between what’s provided and what they genuinely desire. Analyse recent workforce surveys to gain insights into preferences across generations, genders, and seniority levels.
The 2021 PwC report, “The Future of Work,” underscores the disconnect between leaders’ beliefs and employees’ preferences, which can have financial implications, such as misallocating resources on initiatives with limited returns. Broadening your perspective on the workforce can provide deeper insights into employee preferences.
Promote discussions among managers and employees, considering all aspects of the EVP and how they relate to company policies. Apply this approach to recruitment, onboarding, performance management, and policy development.
Keep in mind that employee needs evolve, so regular reassessment is essential. While most organisations can rely on annual data collection, significant events like mergers may necessitate more frequent evaluations. Continuous measurement enables you to adapt to evolving relationships within the EVP components.