A stronger Employee Value Proposition can help retain top performers and attract the best external talent.
- By Vidya Hattangadi
From recruitment to retention activities such as getting the best employees on board, engaging them significantly and retaining them is not a cakewalk for HR teams. For engaging and retaining employees for longer term, defining interesting employee value proposition (EVP) is a must. So, what exactly is EVP? It’s a set of associations and offerings provided by an organisation to its employees in return for skills, capabilities and experiences an employee brings to the organisation. EVP is an employee-centred approach that is aligned to existing and future workforce planning strategies.
High salary packages and a variety of perks are no longer enough to attract and retain top talent. The most sought-after global employers treat employees like internal clients; they are strengthening their EVP as a strategy for attracting and retaining top performers. It is also closely related to the concept of employer branding. In recent times, EVP is referred to as the employer brand proposition (EBP).
Value proposition should consist of people policies, processes and programmes that exhibit the organisation’s commitment to employee growth, management development, ongoing employee recognition, corporate social responsibility, etc. Depending on value proposition, employees choose to commit themselves to an organisation. Progressive organisations actively communicate their value propositions in all recruitment efforts, and in offer letters. Frankly speaking, EVP should take the focus away from compensation as the ‘primary offer’.
EVP at Goldman Sachs is: ‘At Goldman Sachs, you will make an impact’. It’s a leading global investment banking, securities and investment management firm that provides a range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments, individuals. Founded in 1869, the firm recognises its people as its greatest asset; it believes that the determination and dedication of its people can help them serve their diverse clientèle to generate long-term value to their shareholders and contribute to broader public.
At every step of their employees’ careers, Goldman Sachs invests in them, and ensure their interests are maintained. Excellent HR policies, competitive work environment, meritocracy and good compensation inclusive of other benefits are the focus in its work culture. The firm believes in maximising individual potential for increasing commercial effectiveness. That’s the reason the firm has most competitive employees wanting to join it.
There are two sides to EVP: (1) the value (skills, experience, personality, culture, intelligence) a candidate has to offer an employer, and (2) the value (growth opportunities, recognition, work culture, benefits) an employer has to offer candidates.
EVP should not be mystified with a company’s vision and mission statements, core values or culture code. EVP is about the reciprocity between employers’ and employees’ mutual benefit and value to one another; it is about employment opportunity and employer brand.
When organisations encompass the wrong attributes or fail to differentiate their value propositions from their competitors, they fail to retain talent. Also, when organisations show a major gap between promise and reality, it results in reduced employee commitment.
It is good to present an authentic, differentiated EVP. HubSpot’s EVP is: ‘We’re building a company people love’. Founded by Brian Halligan and Dharmesh Shah in 2006, it’s a developer and marketer of software products for inbound marketing and sales. Its products and services aim to provide tools for social media marketing, content management, web analytics, search engine optimisation. HubSpot is growing—it has about 44,500 customers and more than 2,200 employees; its annual revenue is more than $375 million.
HubSpot believes in documenting company’s culture to illuminate its values and guiding principles, and mapping where it wants to go. Codifying company culture is more than just putting current culture into words. It has an element of aspiration added to it. By outlining a definite roadmap, the company has defined core values and actions. Employees who are already working with the company and those who want to join it know what they are getting into. HubSpot’s clients like the company’s employee engagement and, therefore, its business is growing.
In modern management styles, organisations are realising that when they invest in developing and delivering a strong EVP, they attract significant talent and boost employee engagement. For example, an organisation can reduce the compensation premium by 50% and reach 50% deeper into the labour market when candidates view EVP as attractive. Organisations that effectively deliver on their EVP can decrease annual employee turnover.
EVP must define the people essence of the organisation—how it is unique and what it stands for. It must encompass the central reasons that make people proud to work there. An inspiring vision is crucial to make sure EVP is unique, relevant and compelling. When integrated into all aspects of a business, a strong EVP will help retain top performers and attract the best external talent. It is important to understand that it’s the people who work in an organisation who develop ideal company culture from its vision to reality. It’s a vital question to answer why someone would choose to work at your organisation?
(The author is a management thinker and blogger)