What is an employee value proposition (EVP)?

 A definition of employee value proposition

Businesses have branding strategies that outline how they want to be seen externally and internally. The employee value proposition forms part of this strategy. It is the value that the business provides its employees including pay, benefits, perks, career development and much more.

The EVP is designed to act as an ecosystem for the business and its employees. The benefits included in the employee value proposition can be financial or non-financial. Its beneficiaries are both the employees and the employers who get the best out of their teams. An ecosystem is much more complex than a bilateral transaction. As such, the EVP boosts employee engagement, enhances the business culture and contributes to the overall employer’s brand.

Check out more content on these topics with:

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The components that make for a well-rounded employee value proposition

Defining the employee value proposition for your business is essential. To do so, there are some critical components of the organisation’s brand and values to include.

1. Financial compensation

By financial compensation we mean the overall package that employees receive for their contribution. It includes salary, bonuses and even stock options. Financial reward is often the primary motivator for employees. However, although it is critical for the EVP, in isolation, it does not make for a well-rounded employee value proposition and there are many other components to consider.

2. Non-financial employee benefits

Employee benefits cover a range of advantages the job may offer. Typical employee benefits are health insurance, life insurance, pension contribution and annual leave. Some businesses offer more with for example holiday vouchers, gym memberships, transportation benefits or even student loan repayment.

3. Work environment

The work environment is the setting in which employees evolve at work. It affects their day-to-day wellbeing and their productivity. Building a positive work environment is essential to attract and to retain talent. To do so, look into offering:

• • a work-life balance programme and a wellbeing programme
  • the appropriate workplace design
  • flexible working hours
  • regular recognition
  • team-building activities
  • the right technology and particularly communication tools

Creating a positive work environment will drive long-term positive effects including motivated and highly engaged employees.

4. Company culture

Company culture is influenced by many factors. Essentially, it is the way the business and its people behave and the values they convey. Company culture is influenced by the trust that employees have in the business, the relationship between people internally and externally, the hierarchy and its effects, the cohesion between employees and the values the business conveys. Company culture is at the centre of the employee value proposition.

5. Personal development

Most employees want to have a clear career path. For businesses, having a personal development programme ensures that employees have the training they desire and therefore that they can work on their career path within the organisation. Personal development includes promotion opportunities, lateral job changes and a training programme with diverse content.

Why is the EVP so important?

The image that an employer portrays outside its organisation is essential to retain and to attract talent. The employee value proposition is a convincing factor for candidates. It answers the question: why should I work for this organisation?

The EVP has a direct influence on the workforce, impacting both recruitment and employee retention.

Recruiting top talent

In today’s recruitment market, employers have to demonstrate the benefits of working for their organisation. COVID-19 accelerated the preference for remote work. Being open and for example, offering flexible working is a true advantage that demonstrates that the business cares for its people’s wellbeing and for the overall employee experience. The EVP needs to incorporate these types of components to ensure that it drives talent acquisition.

Retaining highly valued employees

Talent recruitment is expensive. In parallel, businesses should ensure that they invest in talent retention, with strategies in place to retain top talent. By including employee engagement, recognition and incentives, onboarding processes and professional development, the EVP is at the centre of these strategies. 

Gaining efficiency throughout the recruitment process

The employee value proposition forms part of a brand that promotes the business from a recruitment perspective. As such, it has a direct influence on the recruitment process. If the EVP is compelling, candidates will be more attracted to the business. This makes it easier for human resources teams when recruiting new employees. An effective employee value proposition will also have a direct impact on the amount of recruitment required as employee retention will be optimised.

Promoting the business brand and culture

Company values have a direct influence on employee engagement. Matching candidates with the business will bring long-term effectiveness and naturally promote the company culture.

5 essential steps for a best-in-class employee value proposition

Step 1: analyse the state of play

Identifying the baseline is the first step to take when it comes to building your EVP. This step aims to provide a full understanding of what the employee value proposition looks like in its current state. To do this, collect all the data that relates to the existing EVP. Use the section above to ensure no components of the EVP are forgotten. Throughout this process ensure there is no bias.

Step 2: collect feedback from candidates, current employees and even past employees

Although this might seem like a lengthy task, it is essential to gain transparency. This qualitative data collection can be done through surveys or interviews. The aim is to understand the following:

• What motivates employees and candidates to work for the business?
• What can be improved in terms of image, flexibility and professional development?

Analysing the answers to these two simple questions will increase understanding of the perception of the business and give a voice to both employees and candidates.

Step 3: define the components to include in your EVP

Ideally, all components from the section above should be part of the employee value proposition. However, depending on the nature of the business, this is not always possible. The combined analysis of step one and step two should reveal any gaps. At this stage you should be able to answer the following questions:

• What does the ideal career development programme look like?
• What are the company values and culture? Does it match the current EVP and if not, what needs to be addressed to attract the ideal future employee?
• What are the salary expectations for candidates in the same industry and for all levels of seniority?
• What will ideal candidates look for in their future work environment and is the business ready to fulfil this need?

The employee value proposition should define the benefits based on different levels of seniority within your business. Having this differentiation ensures that the needs of all types of profiles are fulfilled, from senior leaders to new graduates.

Step 4: endorse your new employee value proposition

Like any other documentation, the employee value proposition needs to be communicated thoroughly, endorsed and promoted. The EVP can be promoted through different channels, both internally and externally, and by different stakeholders. Its endorsement by senior leaders will bring more weight to it.

Step 5: analyse the outcome and re-adjust if needed

Prior to launching the new EVP, make sure that you have some key performance indicators (KPIs) created to measure the impact it is anticipated to have. Efficiency metrics can relate to employee engagement, the effectiveness of the recruitment process, talent retention and much more. These KPIs should be looked into regularly and may need to be updated over time to ensure they stay relevant to market conditions. A strong EVP is reviewed on a regular basis and adjusted accordingly to stay relevant.

Your business’ employee value proposition is a key competitive advantage that will influence talent retention and talent recruitment. It will bring efficiency to your internal processes and have a direct influence on your company culture through the investment in people. The COVID-19 pandemic has reshaped our ways of working and people’s expectations have somewhat shifted. Incorporating these changes in your EVP will make it more relevant and attractive to your audience.