Employee value proposition: What it is and why you need one

Lyssa Test Writer, Culture Amp

Businesses are always looking for ways to attract and retain top talent. In today's job market, this means sharing a compelling employee value proposition (EVP). An EVP highlights the tangible and intangible elements a business offers its employees, from paid time off to a culture that fosters employee belonging. These factors set a company apart from its competition, play a crucial role in building a positive and engaging workplace culture, and contribute to the business’s overall success.

In this blog post, we'll dive into what an employee value proposition is, how to create one, and how an EVP helps businesses deliver on promises to their current and future employees. Here’s why your business needs a strong employee value proposition to achieve long-term success.

What is an employee value proposition (EVP)?

An employee value proposition is the unique set of offerings, benefits, and values that a business provides its employees in return for their skills, experience, and loyalty. Collectively, these factors act as a competitive differentiator for your business, allowing applicants and employees to assess whether working at your company aligns with their needs.

What workplace factors shape an EVP? Key components may include employee compensation, benefits, professional development opportunities, work environment, company culture, values, and more. Together, these factors show employees what they have to gain by entering a working relationship with your business.

What’s the difference between your EVP and your employer brand?

Your employer brand is more than what’s on your careers page. It’s your business’s reputation as an employer, which can be shaped by word of mouth, media coverage, online reviews, and more. Your brand is also the foundation of your company’s recruiting efforts, helping you put your best foot forward to attract top talent.

Think of your employer brand as your promise to applicants and employees – it’s what they can expect working for your organization. Your EVP communicates all the programs and offerings that bring this promise to life. You may have some overlap between your employer brand and EVP, and that’s a good thing. When these two workplace concepts are closely aligned, you’re prepared to meet or exceed applicants’ and employees’ expectations.

What’s the difference between your EVP and your employee experience?

The employee experience is broader than an EVP, encompassing the entire employee lifecycle and an individual’s overall journey within your organization. Unlike a company-wide EVP, your employee experience is dynamic and unique for each member of your organization.

Still, your EVP and employee experience are connected. If your EVP overpromises and an individual has a negative experience at your organization, odds are they won’t stick around for long. Similarly, if you have an amazing employee experience but a poor EVP, you might have trouble recruiting top talent. Prioritize both your EVP and your employee experience to keep your people happy and engaged while also attracting new candidates.

What are the benefits of a compelling employee value proposition?

A compelling employee value proposition can offer several significant benefits to an organization, including:

1. Attracting top talent: A strong EVP can help your business put its best foot forward and capture the attention of top talent, while a poor EVP can have the opposite effect. 65% of candidates report they have actually discontinued a hiring process due to an unattractive EVP.
2. Retaining employees: A compelling EVP can also keep your employees around longer. Gartner data reveals that effectively delivering on your business’s EVP can decrease annual turnover by 69%.
3. Driving loyalty: When employees know what your business can give them, they are more likely to be loyal. In fact, when organizations can effectively deliver on their EVP, new hire commitment increases by nearly 30%.
4. Reducing costs: Hiring individuals who align with your company's values and objectives increases the likelihood of long-term commitment and engagement. This strategic recruitment approach can help your business minimize recruitment and training expenses.
5. Improving trust and transparency: Your EVP is a value exchange, or what your business brings to the table in exchange for your employees’ work. By proactively communicating the benefits of working for your company, you lay the foundation for a transparent and honest relationship with your employees that can foster mutual and sustained trust.

How do you create an employee value proposition?

Ready to build your own EVP? Here’s a step-by-step guide to crafting a compelling employee value proposition that attracts and retains top talent:

1. Identify what makes your business stand out

Regardless of whether your business already has an EVP in place or you’re starting from scratch, your first step is to identify the factors that make your business a great place to work. From benefits to culture to work location, make a list of everything your business has to offer. You’ll also want to ask yourself what sets your business apart from your competitors – why would someone choose to work for your company over another? This exercise is a crucial first step in constructing an ideal EVP for your business.

2. Ask your employees

No one understands your EVP better than your current employees. When constructing your EVP, don’t be afraid to tap into your workforce and ask them to share firsthand what keeps them working for your business. In fact, you might already have an employee listening strategy in place that’s already doing this work for you. If your business uses surveys at different stages of the employee lifecycle, you might already be collecting vital information that can help you shape your EVP.

For example, maybe your onboarding surveys ask new hires what influenced their decision to join your company, your stay interviews ask current employees what keeps them at your company, or your exit interviews ask departing employees what contributed to their decision to leave. Using feedback from surveys, interviews, and even focus groups will give your company a better understanding of the factors contributing to employee job satisfaction, as well as where opportunities for improvement lie.

3. Identify key value drivers

Next, you’ll want to determine which factors are most important to your target talent audience. They could include work-life balance, career development opportunities, competitive compensation, benefits, and a positive work culture. Once you’ve identified what makes your organization an attractive place to work, consider what language will best convey these value propositions to your employees.

4. Communicate effectively

Once you’ve refined your message, it’s time to get the word out to potential and current employees. Make sure your business adopts clear, compelling, and consistent messaging to communicate your EVP on various channels, including your website, company intranet, social media accounts, and recruitment materials.

5. Continuously evolve

Your EVP requires ongoing attention and refinement; it's not a one-time, set-it-and-forget-it endeavor. Regularly assess your EVP by seeking input from employees, staying attuned to market trends, and adapting to the changing dynamics within your organization. This ensures your business will be ready to meet the evolving needs and expectations of your workforce.

What are the elements of an employee value proposition? (HBR)

According to Harvard Business Review, an employee value proposition has four key elements. They are:

• Material offerings, like employee compensation, benefits, schedule flexibility, work-life balance, and more.
• Opportunities to develop and grow, like promotions, on-the-job training, mentorship programs, and more.
• Connection and community, or your company culture, employee relationships, recognition, belonging, leadership transparency, and more.
• Meaning and purpose, or why your employees do the work they do, like your organization’s purpose, values, and propensity for giving back.

Collectively, these four foundational factors influence how your applicants and employees determine whether it’s in their best interest to enter a relationship with your company. Every individual will value different factors over others, which is why it’s important to cover all your bases and ensure you have strong value propositions for each of the four factors listed above.

4 examples of employee value propositions

While every business will have a unique employee value proposition, here are four companies with exemplary EVPs.

1. Costco: Wholesale retailer Costco is known for putting people first. From offering competitive compensation to full- and part-time employees, regular scheduling, paid leave, free store memberships, great culture, and internal promotion opportunities, Costco shows how it acknowledges and rewards employees for their continued contribution to the company’s culture and success.
2. Google: Aside from its eye-catching perks, technology company Google is known for its dedication to innovation and making its users’ lives easier through technology. Of course, state-of-the-art offices, four “work from anywhere” weeks a year, caregiving support, and donation matching help attract top talent and keep current employees committed and engaged.
3. HubSpot: Customer relationship management software company HubSpot aims to help its employees “be the best ‘you’ that you can be, both inside and outside of work.” The company offers potential and current employees a culture that prioritizes flexibility, learning, and belonging, as well as perks like unlimited PTO, a paid sabbatical after five years of service, tuition reimbursement, volunteering opportunities, and more.
4. Merck: Pharmaceutical company Merck is an award-winning employer that knows its “people are critical to [its] purpose of saving and improving lives around the world.” In order to keep those people happy and healthy, Merck has a series of rewards and recognition opportunities, benefits, and well-being initiatives for its employees, like on-site gyms and healthcare professionals, 401(k) plans and pensions, and even employee credit unions.

Republished from our friends at Culture Amp