A significant number of organisations are missing out on a golden opportunity to increase employee engagement, attract and retain top talent, or even improve financial performance according to our latest Change and Communication Global ROI Research Study. One of the reasons for this is that less than half the companies surveyed have a long-term plan for getting 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.
Our research shows organisations 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 organisations shows that most fail to realise 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,” says Richard Veal, head of Towers Watson’s Reward, Talent and Communication consulting UK practice. “Unfortunately, to many organisations, the EVP remains a hidden gem that is unshaped, overlooked or not utilised to its fullest extent. Our latest research provides important insights into what makes the best companies - those with highly effective EVPs - different.”
“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,” says Veal. “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 behaviours 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.
Measuring employee engagement is a valuable process but organisations often fail to understand or act on the intelligence generated. Essentially, the precious matter being created is the EVP, which is a powerful tool for attracting, retaining and engaging employees. Better alignment between the EVP and the brand can lead to improved employee line of sight, encouraging employees to adopt those behaviours that will deliver on the brand
The EVP tool is a powerful management tool when used and communicated effectively. Among organisations that offer competitive rewards, improving communication of those rewards can have a greater impact on employee satisfaction – and at a far lower cost – than additional investments in making the rewards richer.
Defining and communicating the EVP
The right team is crucial to successful development of the EVP. In our experience, a cross-functional team designs the more successful outcome. While most of our clients have HR in a lead role, working groups that include marketing or corporate communication – for alignment with
the customer experience and external brand – as well as line executives or managers representing key businesses and geographies, bring a broad spectrum of experience that enriches the process. It is also good to have a diversity of age and tenure on the team. For companies that feel a large team is necessary, we recommend two tiers – a larger group as a steering committee to provide input, offer direction and support successful implementation, and a smaller core working group to direct or do the work, implement final recommendations, and keep the steering committee updated and present recommendations to leadership.
With the project team organised, process takes centre stage. EVP projects start with a broad set of questions: who are we as an organisation? What do we do? Why does it matter? What workforce will we need (and where) to succeed? Who are they and what matters to them? With whom do we compete for talent?
The answers help you firmly set your EVP in the context of your business strategy. They pull in
the elements of your brand and purpose, your competitive environment, and ultimately, your human capital plan. With answers to these questions in hand, the team can define the organisation’s ‘give’ and ‘get’ – in other words, what the organisation offers and what it expects in return from its employees. The ‘get’ is especially critical.
Be deliberate and test for success
All companies have an EVP, even if it has not been formalised. The work we have described is a way of moving from an informal, unmanaged EVP to one that is deliberate and aligns with what you stand for in the market and how you want to be known as an employer. Once the EVP is defined and communicated, and total rewards programmes designed accordingly, checking with employee groups to make sure your organisation is delivering on the promise is essential. Refining your EVP and its elements based on ongoing employee research will bring you full circle in getting it right. The outline of policy and programme changes developed during planning stages, coupled with some practical measurement mechanisms, can help you gauge progress against critical milestones. Some examples of how to monitor progress include regular engagement surveys, gathering feedback from recently recruited employees, and regular analysis of employee productivity and financial performance from the onset of implementing the newly crafted EVP. Active monitoring such as these examples will help tell you whether employees believe the deal is real and if your company is delivering on the EVP promise.
Critical outcomes from an EVP
Having a clear EVP is an increasingly critical tool in the war for talent, particularly as the market for that talent becomes more global. For employers, it helps attract, retain, motivate and engage employees to drive business success. For employees, it shapes the overall view, emotional connection and level of discretionary effort they bring to the company. For both, it is a critical element for a successful workplace and career experience. Companies that adopt a holistic approach to reward strategy that includes a thoughtful and well-articulated EVP can realise significantly stronger results from their talent management and reward programmes than those that do not. Perhaps even more importantly, our research shows that a well-articulated and managed EVP is directly linked to both better HR and financial outcomes. Developing an effective EVP is well within reach for any organisation.
Getting the EVP right
So how do you get the EVP right? At Towers Watson, we have distilled the process into 10 key practices:
- Use employee survey data to help you develop a formal EVP.
- Effectively communicate the EVP to employees.
- Align the EVP with what the organisation stands for in the marketplace.
- Deliver on EVP promises.
- Differentiate the company from competitors in the labour market.
- Design customised EVPs for critical employee segments.
- Articulate a total rewards strategy aligned with the business and HR strategy.
- Use business strategy and objectives to inform talent management and rewards programmes.
- Create specific objectives for each talent management and reward programme to align it with the EVP.
- Employ organisational analytics (that is, business performance and analytics, workforce demographics, workforce performance data) to test the effectiveness of total rewards programmes.