Compensation remains a key motivator for candidates and employees, linked with engagement, development, and performance. But in 2022, it is no longer enough to attract and retain talent.
Not only is it a socioeconomically uncertain time — given the impending recession and looming cost-of-living crisis — but what employees value in a job has evolved. Post-pandemic, they are looking for much more than a transactional, compensation-based relationship with their employers. However, many businesses are yet to catch up with talent’s upgraded needs.
This means that candidate availability continues to fall as demand continues to grow. In the UK, the hiring rate is at an all-time low since March 2021 and over 60% of UK businesses are battling high turnover rates. This is prompting employers to lure candidates in with higher pay, resulting in one of the quickest pay rate rises since 1997.
In the current talent crisis, small and medium-sized businesses (SMBs) may find it difficult to match the competitive compensation of enterprise companies. But the silver lining is that compensation is just one component of an Employee Value Proposition (EVP). As a company, your EVP is a driver for talent acquisition, engagement, and retention — and a key differentiator in the talent market. When done right, it can help you decrease turnover and increase organisational commitment.
What is the Employee Value Proposition?
The Employee Value Proposition is the value and offerings supplied by a company in exchange for the skills, competencies, and experiences that an employee provides to the business.
The purpose of an EVP is to positively influence candidates with your unique selling points — helping to attract, retain, and engage them. It provides a consistent platform for employer branding and experience management, and typically incorporates your company values and vision, financial rewards, benefits, career development opportunities, and additional perks.
Think of it as the promise you make to your employees and candidates about what’s in it for them when they join your organisation: Why should employees work for your company instead of somewhere else? What can you offer them that other employers can’t?
“We want to make sure we have a transparent culture focused on our people, in particular on transparency, open communication, trust, and continuous feedback,” saif Paola Tartaglione, People & HR Lead at TaxScouts.
In order to be original and compelling, your EVP needs to be aligned with existing, integrated workforce planning strategies. It must be created from the point of view of existing employees and external target audience to embody the total employee experience.
Creating an up-to-date EVP for 2023.
The pandemic forced many people to reconsider their values and purpose in life. As a result, workers seek companies that align with their values. According to a survey by Edelman, six in ten of those changing jobs seek a better fit between their own and their employer’s corporate values, beliefs and behaviours.
Given that your employees’ needs, goals, and expectations have evolved dramatically over the last three years, your EVP needs to reflect that. Factors include:
- Employee values are changing. They prioritise work-life balance; flexibility, autonomy and wellbeing; and diversity, equity, inclusion, and belonging (DEIB).
- Companies are shifting their business priorities, based on how the employee experience and talent priorities have changed since the pandemic.
- Hybrid and remote work policies are increasingly becoming the norm, meaning working modalities are changing.
- Recruiters are hiring across broader regions and talent segments, with candidate goals and expectations varying widely depending on the region or role.
A 2021 Gartner survey on EVPs revealed only 31% of HR leaders think their employees are satisfied with their EVP. Meanwhile, 65% of candidates have discontinued the hiring process due to an unattractive EVP.
Designing an ideal, up-to-date EVP that speaks to your employees’ needs may be a challenge, but the payoff is worth it — that same Gartner survey showed up to a 15% rise in employee satisfaction.
Best Practices for Creating an EVP in Uncertain Times
As an HR leader, your goal is not only to own and create a competitive EVP strategy tailored to your employees, but to also make it as transparent and accessible as possible. To continuously foster employee engagement, you must communicate the value of your EVP from the start of your employee journey.
Below are some best practice to help get you started:
1. Focus on human-centric characteristics.
EVPs are made up of characteristics that affect how your recruits and workers perceive your company as an employer. Traditionally, these relate to compensation, work-life balance, stability, location and respect.
But the current talent crisis is a clear indicator that there are blind spots in traditional EVP practices that need to be addressed. In order to stay relevant with your workforce, you must include a more “human deal” in your EVP across five key characteristics, Gartner advises:
- Deeper connections: Make employees feel understood. Foster a supportive work environment that extends to their coworkers, family and community by incorporating DEIB and building deeper interpersonal connections.
- Radical flexibility: Meeting and Incentive Management Organisation Gavel shared that 53% of companies surveyed post-pandemic are altering their EVPs to promote work-life balance and wellness. Offer flexible hours and work arrangements, from parental leave to remote working options.
- Personal growth: Empower employees by providing personalised and unbiased growth opportunities that cover both personal and professional development.
- Holistic wellbeing: Support employee wellness via compensation, holidays, and other benefits. Normalise mental health awareness and open conversations.
- Shared purpose: Make employees feel invested in your organisation by fostering social and environmental responsibility, aligned to company purpose and values.
Customise these factors to suit your industry, employee demographics, and core company values. Then, tweak your company’s EVP messaging to the type of talent you want to attract, while maintaining overall consistency. Segmentation is key. For instance, to attract more entry-level positions, your EVP might highlight growth and career development opportunities.
You should centre your EVP around the whole person and deliver a more intentional culture. You must take consistent action to make workers feel more understood, autonomous, invested, cared for and valued. In practice, this can look like:
- Integrating inclusion goals into day-to-day work and talent processes.
- Giving teams the ownership to determine which activities can be flexible in a role and identifying manager-tested flexibility solutions.
- Providing new and existing employees with career coaches and empowering them to design their own development plans.
- Training managers to hold honest conversations about mental wellbeing and regularly measuring employee burnout.
- Using peer coaching to encourage personalised action on societal issues aligned with your organisation’s goals.
“We want to ensure we constantly help our teams reach their career goals and support their personal and professional growth,” said Tartaglione. “We already offer an annual Learning & Development budget, but to help our people understand exactly how they can progress and grow at TaxScouts, we are also working on designing a career framework. This way, they will be able to visualise their next steps and take practical actions to progress”
Find inspiration by looking to companies like HubSpot and Airbnb for successful EVP examples. Focus on creating an EVP that is clear, concise, inclusive, and written more like a personal conversation with the job seeker or employee, rather than a corporate manifesto.
2. Rethink your compensation strategy.
While it’s true that today’s job candidates value company culture and flexibility more than before, compensation remains a top priority. Our Rethinking Work survey found that most UK workers left their previous job for a higher pay rate.
Employers recognise they have a role to play in their employees’ financial wellbeing, with over 60% of them feeling “extremely responsible” for it, The Wharton School of Business found.
But what do employees think? Our compensation survey of over 1000 UK employees revealed that:
- Base salary, pension and retirement contribution, and annual bonuses are considered to be the three most important elements in a pay package by UK employees.
- 64% of employees believe that employers should be more transparent about their pay practices.
- 36% of employees think employers need to do more to address bias. Only 15% of employers have performed a pay audit in the last 6 to 12 months.
It’s clear that companies who don’t consider inflation rates in their compensation strategy risk alienating both potential employees and current ones. But how can businesses compete to attract talent when they’re struggling to offer higher rates of pay?
After all, salary increases aren’t always easy for companies to achieve — especially smaller ones. It’s also difficult to implement a pay rise at scale, as employees are affected by inflation differently based on wage, role, and location.
In this case, find creative ways to act fairly, while remaining competitive. Spend time developing an up-to-date compensation strategy as part of your EVP. Start by reframing what “compensation” means to your employees in the current unstable climate and how you can provide meaningful incentives to create a more appealing work environment.
Consider introducing a total rewards strategy that provides additional benefits above and beyond employees’ basic needs. Think of compensation as a holistic package encompassing different employee benefits, perks, programs and incentives, rather than purely a monetary transaction. Consider rewarding successful employees with foundational rewards, such as performance-based rewards, and career and environmental rewards — like reducing paper consumption, or cycling to work.
Given employees’ need for fairness and transparency, consider implementing regular pay audits. You can use automated solutions to connect performance and compensation via standardised frameworks, to improve clarity and consistency across the entire company.
3. Run regular employee surveys.
Unlike your Employer Brand (EB), which is externally focused, your EVP is internally-focused. That’s why you should ask team members to tell you what they want from an EVP.
To design your EVP, collect feedback from current employees via focus groups, one-to-ones, surveys, interviews, exit interviews, and casual conversations. Use surveys to collect measurable and standardised employee data at scale, including:
- Feedback. What do employees love about you as an employer? Why did they choose you and why do they stay? Ask them: “What do you enjoy the most about working here? What makes this company unique? What are some of your favourite benefits we provide?”.
- Employee sentiment. Assess how supported and satisfied employees feel, asking: “Do you feel included in your team? Are your career paths clear? Do you feel like you’re doing meaningful work?”.
- Suggestions for improvement. What do employees want that you don’t offer yet? How can you best support them? Ask: “Which opportunities do you wish we provided? What support would you like from us around career development?”
Then, apply your survey learnings to start making concrete changes. “After conducting an engagement survey across the business, we realised we had to improve two areas: perks and benefits, and career development,” said Tartaglione. “In terms of benefits, we asked our people what they value and did deep research in each country. Considering the looming cost of living crisis, we have decided to offer a benefits package that can help — such as a wellbeing allowance and a Perks Platform that provides corporate discounts and more.”
4. Share your EVP with candidates and employees.
For an effective EVP, pair your messaging with consistent recruitment marketing efforts. Share your EVP at various touchpoints of your candidate journey in the form of employee testimonials, corporate blogs, and company videos.
You can highlight different aspects of your EVP in various ways, including:
- Within job descriptions on your careers page, career site, and third-party career sites, including Glassdoor, Monster Jobs, and Indeed
- During interviews and throughout the hiring process
- On your website’s blog and company section
- Across your social media accounts
- On job offer letters
- In your employee referral program
- In internal communication channels, such as Slack and email campaigns
- At talent networking events
A Competitive EVP Puts People First
Increased demand for talent, coupled with a low supply of candidates, is leading to huge attraction and retention challenges. In this uncertain market, an up-to-date and attractive EVP is a valuable tool to attract new candidates, retain top talent and reduce turnover.
HR professionals must create a strong EVP that is human-centric, supportive, and allows employees to do their best work. Motivation, morale, and incentive-boosting programs to encourage and recognise employees are now vital to any EVP strategy.
“Try to understand what your people need and value, and see what you can offer,” said Tartaglione. “If it’s not feasible, find alternatives that they may appreciate.”
For more ideas on creative and competitive EVPs, download our ebook: HR’s Guide to Setting a Compensation Strategy.