What is an Employee Value Proposition?
An Employee Value Proposition (EVP) is a statement that defines the unique benefits, rewards, and values that an employer offers to its employees in return for their skills, experience, and commitment. It is a promise that outlines what an employee can expect from working for an organization, including opportunities for growth, development, and well-being.
A strong EVP is essential for attracting and retaining top talent, as it sets an organization apart from its competitors and provides a clear understanding of what it means to work for the company.
Learning Organizational Leadership from Employee Value Proposition Examples
It’s no secret that energized employees perform at their peak, and employees who feel disengaged can be a destructive element that no employer wants. As part of engagement strategy, organizations are finding that a strong and sustainable employee value proposition is invaluable. Here I look at two different employee value proposition examples before describing the steps to creating an organizational environment that emulates the best employee value proposition examples.
Why a Strong Employee Value Proposition is Important
A strong Employee Value Proposition (EVP) offers numerous benefits to an organisation, including:
- Attracting and retaining top talent: A clear and compelling EVP helps to differentiate an organization from its competitors and attracts the best candidates.
- Improved employee engagement: When employees understand the value they bring to an organization and what they can expect in return, they are more likely to be engaged and motivated.
- Increased productivity: A strong EVP can lead to increased productivity, as employees are more focused on their work and more committed to the organization.
- Reduced turnover: A well-defined EVP can help to reduce turnover, as employees are more likely to stay with an organization that offers them a clear understanding of what they can expect.
Key Components of an Employee Value Proposition
A strong Employee Value Proposition (EVP) typically includes several key components, including:
- Compensation and benefits: A clear understanding of what an employee can expect in terms of salary, benefits, and rewards.
- Career development: Opportunities for growth, development, and advancement within the organization.
- Work-life balance: A commitment to supporting employees’ personal and professional well-being.
- Company culture: A clear understanding of the organization’s values, mission, and culture.
- Recognition and rewards: A system for recognizing and rewarding employees’ contributions and achievements.
By including these key components, an organization can create a strong EVP that attracts and retains top talent, improves employee engagement, and drives business success.
Employee value proposition examples in action
An effective employee value proposition will act as a magnet to the best talent, and help retain them. If your company is finding it difficult to hire top people, or is losing its best people to competitors, it could be that you need to look inward and reassess your employee value proposition.
When TNT Express found itself losing out in the talent employment race, it did exactly this. It canvassed employees and asked why they felt disengaged. From these results senior management on-boarded middle management to align these employee wishes with the organization’s strategy, culture, and investment in human capital management. It is crucial to address the needs of both potential and current employees to create a compelling EVP. In its study, the factors identified as important to employees included:
- Health benefits
- Vacation benefits
- Manager quality
- Communication
- Respect
Among almost all employee groups surveyed, compensation came some distance behind other factors identified as important. TNT referenced its developing employee value proposition to three of these elements that most aligned with its strategy. Prime of these was the quality of its leaders and the methods and depths of communication within the company.
Netflix created an open and inviting culture as its employee value proposition (EVP), as perhaps you would expect. It emphasizes that it values diversity in the workforce, and empowers employees with freedom and responsibility. It doesn’t have a vacation policy. Nor does it dictate on clothing, and its policy on expenses is simple: “Act in Netflix’s best interests.”
The company also encourages its people to consider the long-term view, with a strategy that engages employees in their own career development.
How can you profit from employee value proposition examples?
Excellent and sustainable employee value propositions do not come about by accident. High annual employee turnover can lead to significant financial losses, making it crucial to develop an effective EVP. Both TNT and Netflix took deliberate action to create a uniqueness of company brand that appeals to top talent and then retained them. Here are four steps to create your organisation’s unique EVP:
1. Think Strategically
Whether purposefully or not, your organization does have an EVP, even if it has not been formalized or strategized. In order to create a progressive EVP, think strategically and involve employees in discussions, as TNT did:
- Instigate employee surveys
- Align the EVP with organizational values
- Communicate with employees
2. Integrate the EVP strategy with leadership and rewards
With the EVP formalized, create a set of objectives to deliver on the promise of the EVP. A compelling EVP can significantly decrease annual employee turnover by attracting the right talent and retaining employees. The elements in the EVP will identify with employee competencies, human capital management practices, career path progression, and compensation.
3. Communicate the EVP and deliver the internal brand
At this step, the own employee value proposition (EVP) is fully aligned on a companywide basis, and it is now time for strong leadership to engage employees in an environment of mutual trust. It’s now time to discuss strategy in an open and transparent communication style, engaging employees in the process of creating and delivering an internal brand aimed at retaining top talent.
4. Remain unique in the competitive marketplace
Even within organizations, different segments will have different needs and these can now be defined at micro-levels. Use this increased knowledge to be unique in the marketplace and gain an advantage over competitors.
To benefit from an EVP, take a page out of the TNT and Netflix books and:
- Understand your people;
- Define the value-added rewards based upon this knowledge;
- Deliver those rewards; and
- Communicate continuously
Contact Primeast today to discuss our Management Development Series, including our Energy Leadership Program, which helps develop high-performing managers into inspirational leaders.
