“Customer is the king” this phrase is well thought-out as factual and most important to become successful in the corporate world. Today everybody talks about building relationships with the customers to attract them and stay connected to the organization, but very few talk about building relationships with the people working in the organization i.e. its own employees.
The need of the hour is to focus on the employees first and then customers. Employees build the brand. They represent the organization. If they are not happy how will they lead the organization towards achieving goals? Gone are the days when employees were treated mere like puppets, today their demands have changed. Even they desire the support and guidance from the organization to grow professionally. For today’s organization the mantra is Take care of your employees first and they will eventually take care of your customers. In simple terms Employee Value Proposition (EVP) is the deal made between the organization and its employees, according to which organization provides certain benefits to the employees as a return of the skills, capabilities and experiences they bring to the organization.
An organization’s EVP should clearly state what makes the organization the obvious choice over the competitors in the market and how the organization makes balance of what the employees experience and get while they are part of your organization. The EVP must be able to provide answer for the following questions-
· Why should I join this organization?
· Why should I be a part of it for long?
· Why should I deliver my best?
· Why should I recommend this organization to others?
· Why should I re-join as an opportunity?
Essentials of EVP
Elements of an EVP are not same for every organization. It will depend upon the vision of the organization and the economic trends. For instance, with an economic downturn as in the case of recession the highest ranked attribute employees will be looking for is organizational stability.
For most of the companies’ employee value propositions include the following-
· Rewards - compensation benefits, health benefits, pension assurance, vacations etc.
· Opportunity - career growth opportunities, promotions within the organization leadership opportunities, empowerment and revenue generation by the organization.
· Work Environment - interesting work, work life balance, opportunity to be creative and innovative, recognition for the efforts, amount of travelling for job requirements etc.
· People - team work, interaction amongst employees, social life, camaraderie etc.
By focusing on these key components organizations can evaluate where they stand today. They can try to find out what employees feel regarding their relation with the organization and try to fill the gap between how you want your employees to think about the organization and how they actually think currently. Companies with high EVPs are the sort of workplaces employees take pride working in. Employees enjoying a high EVP love what they do and where they work and they aren’t afraid to tell other capable and promising candidates about their success.
According to a study (Source: Hudson RPO & HRO Today’s study) the research report shows that the top brands are more closely attached to their EVPs. 49.1% of top companies focus on building EVP’s. The trend is gaining momentum and even companies which are not the top brands have started investing in employer branding through EVP formulation.
Obstacles while EVP’s formulation
Organizations work a lot on appealing branding but that does not precisely reflect the reality.
At times organizations get confused and build a long list of EVP’s for their employees. When there are a large number of EVP’S organization often fails to fulfill all and thereby disappoint its employees. The result is formulation of propositions that are just in words and not in deeds. Time and again there is clash in the thinking of the employees and the organization. Both do not have similar mindset all the times. Framing EVP’s keeping in mind the welfare of the employees becomes a challenge. Top management should not frame value propositions they cannot justify and relate to. They should rather involve the current employees or their representatives in framing impactful EVP. A good starting point would be to fetch information through employee opinion survey data. Conduct assessments of current staff and try to find out their alignment with the cultural values of the organization. This will put in the picture what employees think is working and what isn’t for them.
Before operationalizing the EVP’s it is imperative to test them. The test on employees would give the real picture of what employees want. If the employees find it difficult to relate to the EVP’s, changes should be made to come up with something they look up for. Creating clear EVP’S to differentiate you from other brands in the market has become an area of great concern.
Every organization must consider EVP formulation as important as developing marketing and advertising strategies to beat the competition. The organization must develop distinctive and likable EVP’s which can justify the employee needs to stand distinguished.
Benefits of EVP’s to an Organization
Quality talent has never been as needed as in the recent years. The major challenge faced by organizations is not only related to attracting best talents but also how to maintain and keep them for long. Today’s talents have virtually boundless opportunities. The trend of job hopping is widening and is getting accepted too. There is massive demand for talented people in the market and has eventually exceeded their supply, thus it has become increasingly difficult to motivate and retain them. The result is that a company’s expertise to attract, retain and engage talent has gone from nice to necessary. To do this efficiently Employers require superior and advanced employee value propositions in order to attract and hang on to talented employees, since the cost of changing jobs has declined, the tendency to switch has increased. Employee Value Proposition helps an organization grow in the following ways:
· Helps in becoming employer of choice - Through best employer practices aligned to the employee value proposition the organization targets the best talent in the market. There is increased rate of attraction and retention of the people for the employer.
· Helps to prioritize HR agenda - Creating EVP help in understanding of what should be the HR priorities for an organization. The process of formulating EVP helps in gaining insight into what is important to your employees and possible hires. This will specifically focus on approaching innovative ways to attract, engage, retain and develop the employees one wants to stay for long and also watch the things that can make employees leave if they are not addressed. It helps in bringing clarity on areas of improvement for the organization.
· Decrease in cost of engaging people - If the organization delivers what it promised with respect to the employee value proposition, the overall cost of engaging employees trims down as efforts get more aligned and clearly articulated.
· Lower new-hire premium - According to the Corporate Leadership Council, EVPs that are viewed as unattractive require a 21% premium to hire employees, while attractive EVPs require only an 11% premium. When people evaluate an organization’s EVP as striking, they ask for a lesser compensation premium when accepting an offer.
· Decreases Employer Brand Misalignment - Misalignment of employer brand occurs when the objectives of employees differ from that of the organization. Consistent communication of employee value proposition both internally and externally helps in creating a single identity during the phases of changes for growth. Efforts are put in the key areas of improvement that require action in line with the employee value proposition.
· It will make employees better - Studies have shown that a well-organized EVP will improve the dedication of new employees by up to 29%.This in turn means you will see an increase in engagement, loyalty and most importantly overall growth and productivity.
Points to remember while creating EVP’S
· EVP should not be exceptionally positive so that it leaves out crucial negative features.
· It should enable applicants to self-assess whether they are a right choice for the organization. The information candidates obtained about the organization from different sources must be reliable and should match with what the employees feel. A truly authentic EVP requires the input of internal and external stakeholders at all levels. The process must indeed include certain employee representatives who can give better views for creating EVPs.
· Create EVP to differentiate the company from competitors in the labor market.
· There should be customized EVP for various employee segments related to their positions in the organization.
· The initial stage of building EVP does require discussion with the current employees to evaluate the key EVP. This information should be collected through employee surveys, exit interviews, focus groups and feedback from employees.
· The right team is vital to successful development of the EVP. The team should be cross-functional and should include important personnel of the organization.
· There should be regular analysis of employee productivity and financial performance from the beginning of executing the newly crafted EVP.
· EVP once formulated should be communicated effectively.
· EVP must be tested time to time and if there is need to make changes it should be done appropriately.
An EVP can be used as a large-scale talent management strategy. It can give an upper hand to employers in terms of reaching great talent, motivating and engaging them to remain competitive and flourishing. For employees, it shapes the overall view. It helps in creating emotional attachment with the company so that the employees start living the brand. Developing effective EVP is within the reach of organization and can ultimately make them significantly stronger than others.
Disclaimer: This is a contributed post. The statements, opinions and data contained are solely those of the individual authors and contributors and not of People Matters and the editor(s).