The Employer Value Proposition is the value and offerings provided by a company in exchange for the skills, abilities, and experiences that an employee brings to the organisation. It is a promise the company makes to its workers and recruits about what they will receive if they join that company.
The goal of an EVP is to favourably attract applicants with your unique selling points, assisting in attracting, retaining, and engaging them. It provides a uniform platform for employer branding and experience management and often includes the company’s values and vision, financial rewards, insurance coverage, flexible working hours, benefits, career development opportunities and other advantages.
Your EVP must be connected with current, integrated workforce planning initiatives in order to be unique and appealing. To encapsulate the whole employee experience, it must be produced from the perspective of existing workers and the external target audience.
The phrase “human capital” refers to the financial worth of an employee’s education and training. Employers prioritise traits like loyalty and timeliness in their employees, as well as assets like education, training, intellect, talents, and health. People believe that investing in human capital will boost production and profitability. A company’s prospects of productivity and success increase with the amount of investment it puts into its employees. Human capital is an intangible asset not listed on a company’s balance sheet.
In addition to the socioeconomic uncertainty brought on by the impending recession and the rising cost of living, employees’ values for a job have changed. After the pandemic, individuals are seeking much more from their employment than a transactional, compensation-based relationship. However, many firms have not yet caught up to the enhanced demands for talent.
Small and medium-sized enterprises (SMEs) may find it challenging to match the competitive remuneration of big corporations amid the current talent crisis. The bright side is that remuneration is only one component of an Employer Value Proposition (EVP). Your EVP is a critical differentiator in the talent market and a driver for talent acquisition, engagement, and retention as a firm. When done correctly, it may help you reduce turnover while increasing organisational commitment.
Why Is Employer Value Proposition Important?
When it comes to attracting top talent, employer branding is crucial. When done well, an EVP provides a compelling answer to the question, “Why should a highly skilled individual choose to work with us?”
Creating an EVP that is unique to your firm will significantly increase your personnel acquisition and retention, providing you with a competitive advantage.
- Recruiting Top Talent – There is no doubt that recruitment marketing has evolved significantly. Prospective workers are getting increasingly picky in their job hunt. An EVP is a driving factor of personnel management and recruitment. As a result, consistent and effective communication of an employee enhances the employer value proposition that improves company branding overall.
- Retaining Top Talent – It is critical to recruit the proper people in this competitive industry. However, maintaining high-performing personnel is just as critical, if not more so. Losing talented personnel means losing productive individuals who are difficult to replace. It’s time-consuming and costly. This is why Fortune 500 firms go to such lengths to retain their top staff.
- Reducing Recruiting Expenses – To begin with, if your company’s employer value proposition is attractive, you will receive more applications from qualified people. As a result, your human resources department will need to spend less on recruiting firms, job postings, social recruitment methods, and other talent acquisition costs. In essence, your cost per hire will decrease. Second, because an EVP helps retain outstanding personnel, it reduces the need for further recruiting and training. This corresponds to a significant sum because many firm resources are invested in learning and training new applicants.
- Improving employee satisfaction – The EVP of a company also has an influence on the entire employee experience at work. Employee-driven businesses build their value offerings on their staff. The ability to focus on what people genuinely care about is what gives great firms the most competitive edge.
Best Practices for Creating an EVP in Uncertainty
As an HR executive, your objective should be to not only own and design a competitive EVP strategy that is specific to your staff but also to make it as open and accessible as possible. To sustain employee engagement, you must explain the value of your EVP from the beginning of your employee journey.
To get you started, here are some recommended practises:
- Emphasize human-centric qualities – EVPs are made up of traits that influence how candidates and employees perceive your organisation as an employer. Traditionally, these are related to salary, work-life balance, stability, location, and respect.
However, the present talent crisis is a strong indication that there are gaps in traditional EVP procedures that must be rectified. To remain relevant with your employees, you must add a more “human deal” in your EVP across five important qualities.
- Rethink your compensation strategy – While it is true that today’s job candidates place a higher value on company culture and flexibility than in the past, compensation remains a top priority.
As part of your EVP, spend time developing an up-to-date compensation structure. Begin by redefining what “compensation” means to your employees in today’s volatile economy, and then consider how you may provide genuine incentives to create a more enticing work environment. Consider compensation to be a comprehensive package that includes many employee benefits, bonuses, initiatives, and incentives, rather than just a monetary transaction.
- Conduct employee evaluations – Unlike your Employer Brand (EB), which is focused on the outside world, your EVP is focused on the inside. That is why you should ask team members what they expect from an EVP.
Collect feedback from current employees through focus groups, one-on-ones, surveys, interviews, exit interviews, and informal discussions to build your EVP. Use surveys to obtain measurable and consistent employee data on a large scale.
Increased demand for talent, combined with a scarcity of prospects, is posing significant attraction and retention issues. In this volatile market, an attractive and up-to-date EVP is a vital tool for attracting new candidates, retaining top staff, and reducing attrition. Human resource professionals must develop a strong EVP that is human-centered, supportive and helps workers to do their best work. Employee motivation, morale, and incentive-boosting initiatives are increasingly essential components of every EVP strategy.
At Blue Helion, we have helped one of the largest internet ventures from South East Asia to set up its business unit in India and assisted them in creating a 10+ partner network ecosystem with 50+ outsourced staff operating at different levels. Read about it here.