The idea of an employee value proposition (EVP) is rapidly gaining importance globally as it plays an important role in attracting, engaging, and retaining top talent and elevating the employer’s brand. But what exactly is an EVP and what does it offer the employer and the potential employee?
In today’s post, we explain EVPs and why is it important for both the employer to have one, and for the potential employee to look for one.
What Is An EVP?
“An employee value proposition is the unique value you offer as an employer to your employees in return for their skills, experience, and commitment to your company. This includes components like salary, benefits, rewards, career development, and work-life balance, as well as your values, mission, social purpose, and organizational culture”.
So, essentially, the EVP explains clearly to an employee what they can expect from the company in return for working for them, and also what the meaning and purpose of the work is. In other words, it’s the experience of working at that firm and the promises the employers makes beyond simply offering you a salary and some benefits.
If the terms ‘mission’ and ‘values’ sound familiar, that’s because these are usually also expressed as part of the company’s employer brand. We can think of the EVP being for an internal audience, while the employer brand is more external. However, clearly there’s a lot of overlap, so the best way to think of employer branding is the external expression of the EVP.
Moreover, when you’re a job-hunter, you’ll first be aware of the employer brand, but as you go through the interview process, you’ll then be learning more about the firm’s EVP.
Why Does It Matter?
1. Attracting Top Talent
For any organisation, attracting the right talent is crucial. An effective EVP helps the company stand out. When potential candidates understand what sets your company apart, they are more likely to consider joining your team. You can think of it like a beacon, drawing in the best and brightest talent.
2. Engaging Existing Employees
As we’ve mentioned in several blog posts, an engaged workforce is more productive. An EVP that resonates with employees fosters a sense of pride and commitment. A strong EVP makes employees feel valued and more connected to the organisation, making them more likely to deliver their best effort. In turn, this lowers turnover, and creates a positive work culture.
3. Retention and Loyalty
A well-crafted EVP contributes to employee retention. When employees feel that their needs are being met and their contributions are being recognised, they are less likely to leave and/or be attracted by an alternative employer. Retaining experienced employees is the holy grail of saving recruitment and training costs while ensuring greater continuity in business operations.
4. Brand Reputation
As mentioned, the EVP feeds directly into employer branding. A strong EVP enhances your reputation as an employer of choice. Satisfied employees become brand ambassadors and spread the message through word-of-mouth. This positive reputation attracts not only potential employees but also customers and investors. This is why employers should be shouting about their EVPs from the rooftops.
Like A Value Contract
The above points demonstrate how important it is for employers to really take time to create their EVP. At the same time, it should be a message to job seekers that they should be looking for and asking potential employers what their EVP is. It’s very easy for a firm to make all kids of promises verbally during interviews without these ever materialising during employment, or for the work environment to be totally different to what was sold at these early meeting stages.
An EVP creates a clear bond and agreement between the employer and employee and can provide a certain degree of confidence that what is being sold at interview is close enough to what will later transpire as the on-the-job reality.
Common Misconceptions
In 2021, the New Straits Times published an article entitled “Attractive salary, benefits main EVP workers look for”.
The articles was based on data compiled by Kantar TNS (a market research organisation), revealing that 72% of Malaysians considered an “attractive salary and benefits” to be the most important component of any EVP, while 69% wanted a "work-life balance". These were then followed by rather non-EVP related desires such as “strong management”, ‘Covid-safe working” and of being in a “financially healthy” organisation.
While a strong EVP should include an outline of salary and benefits, as well as how a work-life balance can be upheld (for example through remote working), the strong management and financial health of an organisation can’t be guaranteed by an EVP.
It also shows that, when crafting an EVP, many organisations will inevitably fall into the salary-benefits trap that the Harvard Business Review identified last year, saying that employers were:
“…following a basic strategy: Ask people what they want and try to give it to them. …It tends to focus discussions on the material aspects of jobs that are uppermost in employees’ and recruits’ minds at the moment”.
For an EVP to have a long-lasting effect and to build value and brand confidence, the authors of the article argue that an EVP should reflect four key aspects of working for that particular company:
1. Material Offerings
This includes total reward, physical office space, location, commuting subsidies, computer equipment, flexibility, schedules, perks, etc.
2. Development & Grow Opportunities
Focusing on how the organisation will upskill employees and increase their value in the employment market, through broadening skills and experience, promotions and training programs.
3. Connection & Community
This encompasses all the benefits that come from being part of the group of people that make up the organisation. They include employees being appreciated and valued for who they are while also fostering a sense of belonging to the team, mutual accountability, building social relationships and allowing candid expressions of opinion. This also clearly links to a firm’s DE&I policies.
4. Meaning & Purpose
These are the organisation’s stated reasons for existing and what it hopes to achieve. This should align with employees’ desires to improve and contribute to society at large and give them an answer to the question “Why do you work here?”.
This should also be a clear message to job-seekers. Being paid well and having flexible working doesn’t directly equate to job satisfaction and longevity in a new position – something already recognised by Gen Z, as we reported in a previous post.
In Conclusion
Being satisfied and engaged at work relies on a patchwork of factors that includes compensation and work-life balance, but also opportunities to grow and develop, connect with your fellow employees and find meaning in the day to day activities in which you are engaged. Employers need to work towards creating compelling EVPs that are not static, but evolve over time, and job seekers should be looking to hiring firms to be open and honest about working for the company, presenting their EVPs front and centre during the interviewing and onboarding process.