Post-pandemic, the top reason stated by employees to quit their jobs was- Lack of upskilling or re-skilling at the workplace.
Unfortunately, most organisations fail to stem this outflow of talent because they focus on quick fixes such as pay hikes or perks. It hardly helps because employees still perceive these efforts as transactional.
Employees desire more meaningful human interactions from their employers to fulfil their emotional needs of autonomy, purposeful growth, and flexibility. It is where Employee Value Proposition (EVP) comes in.
Employee Value Proposition – Meaning
The conventional definition of EVP states that it represents the commitments made by you to your employees in return for the skills, capabilities, and experience they bring to your organisation. It includes financial as well as non-financial benefits. However, looking at EVP as a two-party transaction does not effectively foster a high level of employee engagement.
The pandemic has made organisations rethink their EVP from a more human perspective.
Gartner’s CHRO guide redefines EVP as ‘The Human Deal’ by understanding employees as people. It focuses on the people aspects of offering deeper connections, flexibility, a shared purpose, personal growth, and holistic well-being for employees. It enables you to design exceptional life experiences, not just work experiences, for them that deliver a positive emotional response towards your organisation.
As per the research, 28% more employees are likely to recommend organisations that promote deeper connections by understanding their family and community needs.
Employee Value Proposition Statistics
The following statistics indicate the importance of defining and continuously refining your EVP for attracting and retaining top performers.
- As per Gartner, Only 31% of HR leaders think their employees are satisfied with their current EVP.
- 65% of candidates report they dropped off from a hiring process due to an unattractive EVP.
- Employee engagement figures have remained flat for the last five years.
- As per the Mckinsey 2022 Great attrition 2.0 global survey, 41% of respondents stated that the top reason they quit their job was lack of career advancement.
- As per the Gartner 2021 Hybrid and Return to work survey, 58% of respondents strongly agreed that the pandemic changed their perspective on the desirability of their workforce location, and 50% changed their expectations toward their employer.
- As per the Gartner 2021 EVP Employee survey, incorporating the human aspects in EVP increases employee satisfaction by 15%.
- As per Indian Express, top multinationals in India are facing record-breaking double-digit attrition rates.
EVP Implementation Kit
Download Checklists for Employer Branding, Employer Retention, EVP Comm.Channels
Employee Value Proposition Components
A compelling EVP caters to an employee’s contractual, experiential, and emotional requirements.
The contractual components include financial compensation and benefits offered by the organisation. These need to be competitive compared to those other organisations offer.
The experiential components include opportunities for career growth and the work environment. These need to be differentiated and aligned to employees’ growth potential.
The emotional component represents the work culture and people aspects of the organisation. These must be unique and reflect the organisation’s vision, mission, and values.
Let’s look at each of them in detail,
It includes the total of all financial offerings like:
- Basic salary
- Rental, medical, travel, and other allowances
- Overtime payments
- Variable payouts such as incentives and bonuses
- Stock options
While compensation is a crucial component of the EVP, it cannot be a differentiator in the market without a significant dent in your organisation’s bottom line.
Gartner’s research suggests that organisations can reduce compensation premium by 50% when candidates view the overall EVP as attractive.
It includes other supplementary benefits offerings, such as:
- Time off, paid leaves, and encashment options
- Health and life insurance for employees and their family members
- Retirement benefits like PF contributions and pension plans
- Employee loans at preferential interest rates
- Memberships for gyms, clubs, or other facilities
- Reward coupons or discount vouchers
- Company-sponsored holidays
Targeted and relevant benefits enhance the overall employee experience (EX). Employers must ensure that employees know about these benefits and use them at appropriate life stages.
This component includes all the opportunities that your organisation offers to employees for growth on the professional front, like,
- Technical training and workshops
- Promotion and leadership opportunities
- Mentoring and coaching
- Sponsored courses and certifications
- Top management interactions
- Client-facing opportunities
- Opportunities to work in other cities or countries
- Opportunities in high-visibility projects
- Opportunities to try different domains or technologies
Timely growth opportunities and a strategically planned career path can bring out the best in high performers. Employees perceive themselves as valued by the organisation. It motivates them to bring their best to the table.
4. Work Environment
This component includes all aspects of the employees’ work environment that affect productivity and efficiency, such as:
- Workspace design
- Access to digital and mobile-based tools
- Intra-organisation communication platforms
- Team-building initiatives
- Flexible work hours
- Remote work models
- Company transportation facilities
- Appreciation and recognition programs
According to Forrester’s research, only 30% of companies expect all employees to return to the office post-pandemic. 55% of US employees hope to work from home, even after the pandemic ends.
Creating comfortable work-from-home environments for employees is a priority for enterprises now.
This component represents the soft aspects of the organisation’s work ethic and style of working. It includes:
- The company’s vision, mission, and values
- Inclusion and diversity
- Team member communication and collaboration
- Feedback mechanisms across the hierarchy
- Transparency and accountability in workflows
- Leadership style
- Conflict management
- Encouragement for innovation and risk-taking
Mckinsey’s research findings reveal that company culture is the most significant self-reported barrier to digital effectiveness and has a clear negative correlation with economic performance.
You must design the employee value proposition in a way that it aligns with the personality of your company and the expectations of your prospective employees. In addition, it must be clearly articulated and stand out as a differentiator from your competitors.
Employee Value Proposition Examples
Here are some examples of well-designed EVPs that cover all components and emphasise the human aspects of employee well-being.
Kellogs India – Nourish your Grrreat
Kellogs India has a compelling EVP covering every aspect of employee wellness. It includes:
- Financial Wellness – Financial planning guidance, retirement benefits, flexible car policy
- Physical Wellness – Life, accident, and health insurance, annual health checkups
- Emotional Wellness – Flexible hours and work location, no-meeting Thursdays, birthday leave, employee and family counselling support
- Social Wellness – Functional excellence awards, long service awards, employee volunteering programs, team bonding programs
- Professional development – Leadership development university courses at Harvard and Instead, functional capability coaching, people management effectiveness programs, on-demand self-learning courses
- Inclusive policies – Parental leaves, childcare reimbursements, same-sex partner insurance, woman safety policies
Hubspot – Work and Life Should Fit Together
Hubspot, a global CRM solutions provider, has an EVP emphasising work-life balance. It states that the company aims to help employees realise their potential within and outside work. It offers a well-rounded EVP that includes,
- Remote and hybrid work models
- Medical, dental, and vision insurance for employees and dependents
- Retirement benefits and stock options
- A company-wide week off and vacation quota relief
- A 4-week paid sabbatical on completion of 5 years with the company
- Mental Health resources, therapy sessions
- Paid leaves for new parents
- Leadership development training
- $5K per year for tuition reimbursements
- Fitness reimbursement, nutrition consultations, and workshops on stress management
- Employee resource groups (ERGs) to provide inclusion and support for diverse groups
- Ongoing learning programs
LinkedIn – #LinkedInLife
LinkedIn Life represents the collective personality of LinkedIn as a company. Its vision is to create economic opportunity for every member of the global workforce. With a special focus on diversity, inclusion, and belonging, LinkedIn has ten ERGs with 5000+ members across the globe, such as,
- the Black Inclusion Group (BIG)
- EnableIn for people with disabilities
- Out@In for LGBTQ+ community
- Women@ for women and allies
- Wisdom at Linkedin for senior 40+ employees
- ERGs for different ethnicities
Linkedin also offers best-in-class benefits for employee’s well-being like,
- Health benefits – Insurance, counselling sessions, onsite gyms, fitness classes, and events
- Family benefits – Parental leaves, fertility and adoption assistance, survivor support, childcare, eldercare, and pet care subsidies, life and accident insurance
- Work-life balance – Paid time offs, end-of-year week-long shutdown.
Create a Great Employee Value Proposition
Creating a solid EVP requires a structured approach. Also, it needs to be communicated effectively through brand elements to serve its purpose.
Following are the steps:
1. Assess AS-IS Offerings
You can start by listing all current employee offerings and benefits against each of the five components of EVP. An objective assessment will enable you to see the gaps.
2. Survey Employees and Candidates
Conduct detailed surveys with the following segments:
- Past employees – to understand the reasons for their exit
- Existing employees – to understand what improvements they would like and what current offerings they value the most
- New hires – to understand what motivated them to apply
- Candidates who drop off from the hiring process – to understand the reasons for dropping off
3. Define Employee Segments
You can also refine your EVP by segmenting it for different groups of employees who expect other things from the organisation. For example, multinational IT companies such as Infosys and TCS have separate benefits for interns, first-time hires, lateral hires, and research employees.
4. Determine EVP
Based on the above research, define the offerings for each EVP component. The offerings should align with your strategic objectives and meet the expectations of your preferred employee segments.
5. Integrate Employer Branding
Integrate your company personality communication by articulating the vision, mission, and values. Also, incorporate recognition, employer choice awards, and first-hand accounts of employee experiences.
6. Promote Employer Value Proposition
Publicise your EVP as part of your recruitment marketing initiatives. Provide a consistent communication experience to prospective and current employees across job portals, social media, career fairs, email campaigns, and the website career page.
7. Track & Evaluate Results
Ensure that your organisation delivers on the promised EVP. Track key performance indicators such as employee engagement, attrition, number of new applicants, and recruitment efficiency to ensure your EVP is benefitting employees as expected.
Enterprises are increasingly becoming aware of the economic cost of disengaged employees. Post the pandemic; compensation has taken a back seat among the deciding factors for candidates. Work-life balance and personal growth measures are assuming greater importance.
Decentralised HR functions, ESOP offerings, and digital workflows with AI tools were differentiating elements earlier but are now becoming hygiene factors. As a result, employers focusing on designing and delivering a well-rounded human-centric EVP will continue to attract and retain highly skilled resources without paying a hefty compensation premium.