How to Build a Strong Employer Value Proposition (EVP)?
Could you imagine being part of an organisation that sells itself?
Attraction is easy, retention is the norm and you and your colleagues enjoy coming to work. Creating a strong internal and external EVP will send you on your way to seeing benefits such as: lower attrition costs, higher employee/business performance and a more engaged workforce. But… what really is an employer value proposition?
An Employer Value Proposition is what a company provides in return for its employees skills, behaviours and competencies (Towers Watson, 2014).
In more simplistic terms, it is what tools, processes and people strategies you are implementing to support your workforce. Your EVP combines your internal (existing) employees, along with the external market – when both are working effectively, you can strive to become an employer of choice.
What are the benefits of a strong EVP?
Although, it is important to remember that not all attrition is bad attrition. It is safe to say that the more support and development opportunities are given to employees, the higher the chance you have of retaining them.
Retaining members of staff can significantly reduce hiring costs. A bad hire can cost anything from 30% to 300% of the first-year salary. Recent REC study found that a bad hire of a £42,000 salary employee can cost a business £132,000!
As we start to think about how competitive today’s market is, particularly for attracting high quality candidates – have a think about what you can offer (other than compensation/benefits/reward) to attract new employees. With a commercial hat on, you can make a number of cost savings through better attraction e.g. reduced dependency on agency fees and lower lag time to hire.
58 percent of people would rather work for a company that shares their personal values, than one which pays more. This value increases for younger generations.
3.) Improved performance
People who personally identify and engage with their companies perform better and a significant number of studies can confirm it.
- Engaged teams are 22% more profitable when compared to their peers,
- Happy employees are 12% more productive,
- Value-driven companies are 12 times more valuable in the stock price.
How to Build a Strong EVP?
Two constructs that strongly correlate with the EVP and company performance include: Employee Engagement and Company Culture. We are going to discuss both concepts below.
What is it?
Due to the world of employee engagement becoming fairly saturated, it is becoming harder to define what it actually is. However, in simplistic terms, an engaged workforce can be described as having present, energised and committed employees.
Engagement is intrinsically linked to improved individual and organisational performance. It also ties in with less absenteeism, along with an increase in innovation.
Many organisations still see employee engagement and people strategy as a “fluffy HR thing” however, people are at the centre of every business. Processes and technologies are great, however, without people they are useless.
How to create an engaged workforce?
Feedback, trust, and communication
- Most organisations communicate poorly and therefore, trust between the employees and leaders is low
- Although some businesses have good intentions with new their new strategies, the fact that they don’t capture feedback on the needs and wants of their workforce leads to poor adoption
- Creating a culture where feedback is frequent, trust is high and you communicate effectively will lead to an engaged workforce
- We’ve all worked for businesses where they have a couple of words on the wall which they call their “values”. However a purpose is a modern slant that should communicate to every employee why they come to work and why they do the job that they do
- Following on from the previous point, feedback will allow you to shape your purpose. There are a number of tools that you can use, as well as hands on approaches.
Wellbeing and workplace
- There’s a demand for good quality talent at the moment and therefore, the way in which we support the wellbeing of our employees both physically and mentally is crucial if we wish to retain them
- Good working conditions and in some cases SMART working strategies are also important, as we begin to focus on our people being at the centre of our businesses
Reward and benefits
- Reward is often the thing that people turn to when they have high attrition/low performance. However, the reality is that Reward is not a sustainable or cost effective business strategy in relation to employee engagement
- However, it’s certainly an enabler and one of the core pillars to creating an engaged workforce
- Benchmarking and understanding personal needs in individual industries/regions is also important
Creating a great culture
What is culture?
The most practical way of thinking about culture is to think about the core values of a business. It is the glue that binds everyone together. No matter how diverse your workforce is, if they are motivated by the same values they will be able to put their differences aside to work towards a common goal. There is a reason why value-driven companies are 12 times more valuable in stock price…
How to create a great culture?
The drive to create a great culture needs to come from leadership as they are the ones responsible to its creation. However, its foundations need to be built on engaging with the existing workforce using various tools such as surveys, interviews, and workshops to give each employee a voice and create a high performing culture.
Definition – what does culture mean to me?
Culture sometimes may seem ‘fluffy’ as people don’t fully understand the commercial value that it can bring. It is a complex concept and this is why before doing anything, make sure you define it in a way that’s specific to your organisation.
‘Creating a great culture may seem to be a time and resource-intense process. However, the long term benefits of setting it right are immense and there are plenty of studies to support it.’ – Michal Wisniewski, CEO of Macawly
Current vs. ideal culture
Before jumping into setting up the ‘ideal’ workplace culture we first need to determine ‘where we are’ as the organisation – this can be done by completing a “health check” or diagnostic exercise. This creates the foundation for the entire process and helps to focus on relevant areas of culture. The ideal culture should come from the leadership but should be supported by the existing workforce. Don’t ignore any answer, reach a holistic understanding.
The best way to define the ideal culture is by focusing on individual and organisational core values. What do you care deeply about and would like to ingrain it in your organisation?
Action Plan – Define employee experiences you need to do more and less of
At this stage, a lot of creativity and brainstorming takes place. An action plan should specify what the changes might and might not indicate.
It is essential to establish an effective communication strategy and get everyone on board. Culture re-definition requires the leadership to demonstrate what the new values mean, reward the expected behaviours, and continuously engage with the workforce.
The benefits of culture often have a lagging impact on the bottom line. For this reason, it is essential to find metrics that measure the effectiveness of the core values specific to your business.
People have a great capacity to focus on the set metrics. Once, as a leader, you set the metrics – people will most likely deem the other performance indicators irrelevant. – what you measure gets people’s attention!
In conclusion, creating a strong EVP can add significant value to your organisation, both improving employee experience internally, along with attracting talent/clients from the wider macro environment.
Rencai & Macawly created this blog in collaboration, we’ve included a short introduction to both organisations below – if you’d like to learn more about either business then please reach out, we’d be happy to chat…
Macawly is a consultancy providing TechHR solutions that help businesses to increase performance by aligning core values & motivations of current employees and measuring culture fit of candidates during the recruitment process.
Contact: Michal Wisniewski, 07716988164, firstname.lastname@example.org
Support business leaders to implement modern people strategies, focusing on employee engagement, digital adoption and culture change. Services range from short-term advisory services to the implementation of multiple insight and feedback tools.
Contact: Harry Wright, 07341 662232, email@example.com