Everything you need to know about the employee value proposition
We are currently observing a shift in employee core values. Work-life balance is becoming increasingly important, and organizations that address this see a higher interest from potential employees.
Thus, companies wishing to become more employee-friendly need to create a compelling employee value proposition that addresses the issues that are important to the employees.
This article will define what an employee value proposition is, the importance of creating your own employee value proposition, and the most compelling elements of a strong EVP. The final section will cover 3 employee value proposition examples to be inspired by.
What is an employee value proposition?
Part of employer branding, employee value proposition (also called employer value proposition), refers to the unique set of benefits employers offer employees in return for their skills, experience, and performance at the workplace. It focuses on capturing the essence of an organization, how it is unique and what it stands for.
The employee value proposition offers a holistic perspective referring to an ecosystem of support, recognition, and values employers offer, encouraging employees to achieve their full potential.
At the basic level, a strong employee value proposition should answer two questions:
- Why should a potential candidate want to work here?
- Why does an employee want to stay working for us?
If you’re still not sure, check out the key benefits of an EVP.
Employer brand vs employee value proposition
The employee value proposition is the internal articulation of the employer brand, and the employer brand is the external face of the company. Simply put, the employer brand is the reputation, and the employee value proposition is the narrative driving the employer brand.
A compelling EVP outlines why employees chose your company and are motivated to work. It should be an employee-centered approach focusing on existing employers’ planning strategies, influenced by current employees’ and external candidates’ feedback.
What sets a good employee value proposition from a great employee value proposition is the uniqueness of the EVP to your business. It should highlight the distinctive and relevant aspects of your company’s offering and work environment.
Done right, a strong EVP will help retain top candidates and attract the best talent.
Elements of a strong employee value proposition
There are 5 core elements that create a compelling employee value proposition. Those elements will determine how employees and candidates perceive your company. They can also be the deciding factors in potential candidates choosing to work for your company or deciding to stay.
The five core elements are:
- Compensation package
- Salary satisfaction
- Compensation package
- Evaluation system
- Work-life balance
- Company sponsored holidays
- Health insurance
- Flexible hours
- Career
- Clearly outlined progression and career development
- Training and development
- Tuition reimbursement
- Work Environment
- Recognition
- Autonomy
- Challenges
- Company Culture
- Companies’ global plans clearly outlined
- Colleagues
- Leaders and managers
The importance of employee value proposition (EVP)
We are living through the Great Resignation. The ability to attract and more importantly retain good talent is vital to any organization’s success. Creating a convincing employee value proposition and personalized employer brand is one way to make working at your company attractive.
- Attracting top candidates
As remote work became more popular due to the pandemic, it has forever shifted the recruitment process favoring the worker. Employees can now apply for better-paying roles that offer work-life balance from anywhere in the world.
Now, it is the employers competing for the top talent, and not the other way around.
Creating a strong value proposition that offers flexibility in working style (hybrid workplace or fully remote) can be the deciding factor in whether a promising candidate chooses your company over a competitor.
You can go a step further and offer relocation benefits to ensure you, secure top candidates.
- Retaining existing employees
We all know retaining employees is crucial to the success of a business. High turnover results in reduced productivity as it takes around 3 months to onboard a new employee.
It also means higher costs incurred through the recruitment process. Did you know that replacing an entry-level professional can cost anywhere between 30% to 50% of their annual salary, with the costs increasing with the level of employees’ experience?
Decreasing the annual employee turnover consequently translates to reduced costs. Retaining existing employees also means they will continue building on their existing knowledge, optimizing and improving processes.
An employee value proposition that outlines a clear career progression and offers a defined promotion process will motivate employees to stay at the company.
For example, DevSkiller TalentBoost can help employers and Talent Acquisition Specialists identify employees’ strong suits and map out clear progression routes.
- Optimizing Recruiting Time and Costs
The Society for Human Resource Management estimates that recruiting one employee costs $4,129 and takes an average of 42 days.
Of course, recruiting top talent may be more time-consuming and even more expensive, as there are not as many talented candidates.
Creating a compelling EVP and having a strong employer brand will result in top talent competing for a position at your company, reducing the overall recruitment time.
Just look at Netflix, a company that in 2019 had less than 6,800 full-time employees a received more than 350,000 job applications. It is Netflix’s open and inviting culture as its employee value proposition that is attracting such a high number of applicants.
- Creating a positive company culture
Research shows that a positive work environment directly impacts employees’ health, improves loyalty, promotes better work ethics, and decreases annual employee turnover.
As work-life balance becomes increasingly important to employees and potential candidates, the employee value proposition is the best way to communicate this. However, never oversell your company, and be honest in your messaging.
- Improving employee experience
Your employee value proposition is as good as the employee experience at the company. Therefore, you should only define your company’s EVP based on your employee’s experience of working for your organization.
It is crucial for business owners to create employee value propositions that resonate with their employees.
Employee needs can differ, however here are some basic ideas to help you get going:
- Flexible hours or hybrid work model
- Financial rewards like target and holiday bonuses
- Company sponsored holidays
- Educational reimbursements
- Paid time off
But it is not all about the additional perks; what employees value and look for within the company’s EVP is a positive relationship between the employee and the manager.
Creating a safe work environment where employees feel comfortable enough to speak up is sometimes the best employee value proposition.
How do you write an EVP statement?
Now that you know what the employment value proposition is, its elements, and its importance. Let us now look at how to write one.
An EVP should clearly outline how your business differs from the competition and highlight your current employees’ experience of working at your organization.
It is important for the EVP statement to be clear, unique, and inspirational. It should portray your company in a positive light but remember not to overpromise and underdeliver.
If the EVP describes the company as having the best company culture, and upon joining employees will feel otherwise, employee engagement will be affected, leading to a high employee turnover. Our best advice is to be honest.
Follow these steps to create a compelling employee value proposition:
- Assess your existing offering
Let us start with the basics. What is your current offering, and what is your employee value proposition missing? How does this align with your employer brand?
Create a checklist of all of the key EVP elements and objectively determine what you are and can realistically offer. We understand it can be hard to be objective, but anonymous employee surveys can help assess your EVP.
2. Carry out interviews with current and former employees
Introduce a systematic interview process, where as part of a focus group current employees and former employees can provide feedback.
Do not be afraid to ask difficult questions like:
- What could we have done differently to keep you from leaving?
- What motivates you at work to engage?
- How can we improve?
- What support do you need from the company to achieve your professional development goals?
Analyze the qualitative data and identify the key factors that motivate top performers. Once you understand this, incorporate this feedback to create a more appealing job offer that will attract top talent.
3. Identify what components resonate with your company
Use the interview findings to enhance your EVP, attract talented candidates and maintain a high retention rate.
At this step you should be asking the following questions:
- What salary range and employment benefits attract top talent?
- What professional development paths will attract my target candidate persona?
- What kind of environment do my employees want to work in?
An effective EVP will also be segmented, highlighting different employment benefits to different roles and levels.
For example, a young professional will look for companies with clear progression routes, and experienced professionals will be looking for paid parental leave and career stability.
Employee value proposition examples
Are you ready to start but struggling with how to promote your value proposition? Do not worry, we did the research and found 3 inspiring proposition examples.
HubSpot – “Your best work starts here”
HubSpot offers a strong EVP statement backed by the organization’s employee-centered approach. The employee value proposition includes unlimited vacation, the option to choose remote work, and paid parental leave, to name a few. They are promoting a healthy work-life balance, with the promise to help employees be “the best ‘you’ can be”.
LinkedIn – #LinkedInLife
LinkedIn divided their own EVP into the following categories: health, family, passion, must-haves, and extras. The extensive employee value proposition offers childcare, eldercare and pet care subsidies, education reimbursement, and life insurance.
In addition, LinkedIn also closes its office for a week at the end of the year, a so-called ‘paid shutdown’.
PwC – “Be well, work well”
Being true to its EVP initiative, PwC prioritizes the employee’s well-being across four dimensions. The dimensions focus on physical, emotional, mental, and spiritual health. The employee value proposition includes health coaching, gym membership, a rewards program, and even counseling to quit smoking.
The EVP segments its employees, offering student loan repayments to young professionals and the Mentor Moms project connecting new months with PwC working moms.
Concluding thoughts
In today’s competitive job market, finding and attracting top talent is not only time-consuming and expensive but also hard.
Creating a strong employee value proposition will make your company stand out from the competition, resulting in an influx of job applications from top talent. So, take the time to create a unique EVP that will have a direct impact on retention rates and the quality of applicants.
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