Employee Value Proposition, also known as EVP, has come on the radar of a large number of organizations in recent years. So, what is it and why should your company consider investing in it?
Continue reading as we explore the definition of Employee Value Proposition, why it’s important, and the key components involved. That way, you can entice and retain top talent in such a competitive job market.
When it comes to recruiting and retaining talent, organizations no longer have the upper hand. Nowadays, employees have such a wide array of options and are extremely selective when it comes to choosing their ideal job. In such a competitive job market, it is crucial to offer a captivating Employee Value Proposition to both potential candidates and existing employees.
An Employee Value Proposition is the assurance that employers make to their employees in exchange for the contribution they make to the company. The promise combines all of the monetary and non-monetary benefits and rewards that the employee receives from their employer. Though, a more simplified definition of employee value proposition is a as follow:
“The combination of benefits and rewards that a company offers its employees, in exchange for their performance at work.”
Though, the important takeaway is that the Employee Value Proposition isn’t a two-way transaction, but rather a complete set of employer offerings that enhance employee engagement and help them achieve their highest potential in the workplace. Your company’s EVP is at the center of your Employer Brand and should seek to describe your organization and why it’s unique and worth being a part of.
Simply put, your company’s Employer Brand is external and your Employee Value Proposition is internal. Your Employer Brand is the face that your organization shows to the rest of the world, and involves everything that people think of when asking what it’s like to work at your company. The EVP, on the other hand, is the face that you show your employees – both current and prospective.
Overall, employer branding is absolutely crucial for a company to attract the best employees. When executed effectively, an Employee Value Proposition offers a convincing answer to the question – “Why would an exceptionally talented individual want to work here?” Crafting an EVP that is unique to your company will help increase both talent acquisition and retention, while also giving you an advantage over competitors.
Undeniably, prospective employees have become more and more discerning in their job search in recent years. This may be in part due to the increase of remote work options. Job searchers learned that they could find higher-paying jobs, for a better overall working experience. For this reason, it is much more difficult for HR professionals to attract the best talent. With an effective Employee Value Proposition, it serves as a main driver of talent management and acquisition.
In addition to attracting the right talent in such a tough market, it’s also important to retain your highest quality employees. When you lose your best employees, you lose productive individuals that are difficult to replace. Not only is it expensive, it’s time consuming to have a high turnover rate.
With a great Employee Value Proposition, you’ll receive more applications from talented people. As a result, your HR team won’t have to spend as much on marketing the employer brand, job ads, recruiting agencies, and more. All in all, you’ll enjoy a lower cost per hire. Since your EVP will also retain your top talent, you’ll also be saving money on additional training and recruitment costs. So, it’s a win-win overall.
Crafting the ideal Employee Value Proposition comes down to identifying the unique strengths of your company. A strong EVP consists of a variety of components and together these characteristics determine how both your candidates and existing employees perceive your company as an employer.
Here are five main elements that your Employee Value Proposition should include:
This element of your EVP tackles the employee’s expectation regarding their salary, as well as additional rewards. It encompasses all financial offerings, including salary, stocks, and bonuses. While financial compensation may be the key motivator for some, for others it carries less importance. For example, the younger generation tends to value work environment (more specifically a work-life balance) more than the older generations.
This component simply refers to non-financial benefits, and can be a range of additional benefits that come with a job. Some possible employee benefits include:
An employee benefits package is most effective when it is tailored to the industry, culture, employees, and company as a whole. Of course, there’s no one-size-fits-all benefits package, but try to customize wherever possible.
Also referred to as career stability, your employees want opportunities to further their career and develop their own skills. So, this component addresses how the company can contribute to the employee’s career development. This element may include any of the following:
For companies that can’t offer financial compensation that is on par with competitors, having a clear career stability and growth plan can mean the difference between hiring and losing top talent.
This element is much more than the physical location of your job, as it involves all the factors associated with a positive work environment. These include things like a work-life balance, work from home opportunities, flexible hours, team building, recognition, workspace design, and communication structures. Overall, it’s vital for companies to understand the importance crating a work environment that employees feel that they can thrive in and produce meaningful work.
Your company’s culture refers to the organizations core beliefs and values. In other words, fostering a great company culture includes things like:
How do you create a strong employee value proposition?
According to Gartner, a strong EVP should have:
In order to create an authentic EVP, make sure that it aligns with company values, establishes an experience that allows employees to live company values, and the experiences themselves reflect company values.
An EVP is essential to the recruit process because it tells prospective employees why they should apply for a particular job at a company and what is in it for them. Companies with quality EVP’s also tend to see higher retention rates among their high performing employees.
Todd Taylor, oversees most of the marketing and client administration for the agency with help of an incredible team.
Todd is a seasoned benefits insurance broker with over 35 years of industry experience. As the Founder and CEO of Taylor Benefits Insurance Agency, Inc., He provides strategic consultations and high-quality support to ensure his clients’ competitive position in the market.
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