NEW YORK, November 14, 2013 — A significant number of organizations are missing out on a golden opportunity to increase employee engagement, attract and retain top talent, or even improve financial performance. And one reason, according to a new survey by global professional services company Towers Watson (NYSE: NASDAQ: TW), is that less than half of the companies polled have a long-term plan on how to get the most from their employee value proposition (EVP) — the employment deal that defines what an employer expects from its employees and what it provides in return.
Towers Watson research shows organizations that use their EVP most effectively are five times more likely to report their employees are highly engaged and twice as likely to report achieving financial performance significantly above their peers when compared to companies that use their EVP less effectively. However, the survey of global organizations shows that most organizations fail to realize these benefits due to shortfalls in their deployment of the EVP, and that less than half (43%) of their HR and communication teams have a long-term plan in place to support that deployment.
“The employee value proposition is one of the best tools available for companies to engage employees, as well as attract and retain top talent,” said Kathryn Yates, global leader of communication and change management consulting at Towers Watson. “Unfortunately, to many organizations, the EVP remains a hidden gem that is unshaped, overlooked or not utilized to its fullest extent. Our latest research provides important insight into what makes the best companies — those with highly effective EVPs — different.
The Towers Watson survey found that EVPs at the best companies are:
- Comprehensive and balanced: About half (49%) of companies with highly effective EVPs combine extrinsic factors such as pay, bonuses and benefits with intrinsic factors including work environment and teamwork, compared to just 24% of companies with low-effectiveness EVPs.
- Differentiated: Nearly half (47%) of high-effectiveness EVP companies have EVPs that are significantly different, stand out from their competitors and are appealing to talent, compared with just 18% of low-effectiveness companies.
- Business-oriented: Almost six in 10 (59%) of the high-effectiveness companies are using their EVP to both drive the employee behaviors they need to deliver on their strategy and to be financially successful.
- Employee-focused: While most (57%) low-effectiveness companies focus on communicating the features and financial value of the deal, nearly half (44%) of high-effectiveness companies are helping employees understand how their individual needs are met.
“The EVP defines the employment deal. It’s a promise to help employees meet their needs in exchange for their daily efforts to help the business succeed,” said Laura Sejen, global rewards leader at Towers Watson. “What we found, though, is that low EVP effectiveness companies discuss the deal in terms of the programs they provide and how valuable they are. But the best companies go much further. They discuss how they meet their employees’ expectations and, in return, what behaviors they expect employees to exhibit to help them succeed.”
The survey noted that an effective EVP aligns the whole work experience, from culture, mission and values, to total rewards, through jobs and people. An effective EVP requires both a strong employer brand strategy and communication plan. Employers looking to improve EVP effectiveness should consider developing an implementation road map; involving senior leaders early in the EVP development; training, rewarding and holding managers accountable and measuring the effectiveness of their EVP on different employee groups.
About the Survey
The 2013 Towers Watson Change and Communication ROI Survey was conducted in September 2013. A total of 207 large and midsize organizations from across North America, Europe and Asia participated.
About Towers Watson
Towers Watson (NYSE, NASDAQ: TW) is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. The company offers solutions in the areas of benefits, talent management, rewards, and risk and capital management. Towers Watson has 14,000 associates around the world and is located on the web at towerswatson.com