Developing an employee value proposition used to be about piling on the perks, but nowadays it’s going to take more than free food and flexitime to attract and retain talent.
Employers and Human Resources professionals in the United States spent much of 2021 grappling with the impacts of the Great Resignation. Now it’s our turn.
“We haven’t seen the worst of it in Australia – not by a long shot,” says Neal Woolrich, Human Resources Advisory Director at Gartner.
“We’re receiving strong signals that many more employees intend to leave their jobs, but have put their plans on hold until they get greater certainty around the full reopening of the economy.”
Recent research analysing the sentiment of 1800 workers by PwC backs him up. It found that 38 per cent of Australians are considering resigning in the next 12 months.
The current tight labour market will only make matters worse. Australian Bureau of Statistics figures from December 2021 show the unemployment rate sitting at 4.2 per cent – its lowest level in more than 13 years – and job creation boomed last year, despite a low number of applications. The short of it? It’s a market ripe for candidates to be picky.
Across the board, competition for talent is heating up. But while employers may be able to lure candidates with higher salaries, they’ll need to beef up more than just remuneration in order to retain them.
Woolrich points out that employee value propositions (EVPs) are more generous than they have ever been. Yet, according to recent Gartner research, only 31 per cent of Human Resources professionals believe their employees are satisfied with theirs. Gartner also found that 65 per cent of current job candidates have pulled out of a hiring process due to an unattractive employee value proposition.
These figures are cause for concern. However, given the upheaval brought on by the pandemic, perhaps it’s not surprising that the definition of ‘added value’ has changed.
“Flexible working is the most obvious example,” says Ben Bars, CEO of brand and culture consultancy We Are Unity. “It used to be a powerful differentiator for employers, but now it’s considered standard.”
“An EVP, for me, must speak to identity and purpose before it can speak to attraction.” – Janelle Leonard, Chief People Officer, AMA Group
Other ‘perks’ that many workers now expect include health and wellbeing programs, the latest tech tools and additional personal leave, says Bars.
But neither he nor Woolrich believe companies should start upping the ante with lavish benefits and financial sweeteners to win the so-called War for Talent. Instead, they say, EVPs must evolve to better reflect what really matters to employees.
What’s old is new
Woolrich stresses that we shouldn’t necessarily rip up our old EVPs and begin again. Nor should we downplay the importance of perks.
Figuring out which features your workers actually want not only helps you meet their expectations, but can also help you draft the principles for your next-gen EVP.
“For example, 57 per cent of workers in the Gartner survey said they didn’t have access to mental wellbeing support during the pandemic,” says Woolrich.
That suggests employers could win staff loyalty with what Gartner describes as a “holistic wellbeing” strategy: a perks bundle that aims to improve physical, mental and financial wellbeing.
The features that still impress employees in 2022 vary between demographics, says Bhushan Sethi, Joint Global Leader of People and Organisations at PwC.
For example, many white-collar workers continue to prize development opportunities.
“There still exists a group of companies that graduates would love to join primarily for this reason,” he says. “Some of these companies have iconic CEOs who speak to the value of education. Some have international offices and help facilitate cross-border opportunities.”
Such companies appeal today not simply because they offer free education or a ladder to climb, but also because they seemingly believe in the importance of personal growth.
In this case, the perk helps spell out the principle. In blue-collar industries, where the development of EVPs generally began later than it did in Silicon Valley and elsewhere, features remain particularly relevant.
“Flexibility and wellbeing measures have taken on added importance in the wake of the pandemic,” says Woolrich.
Gartner’s new research found, for example, that 53 per cent of blue-collar workers think having a say in where they work is important, but only 30 per cent of the organisations they work for offer this.
“If choosing their site isn’t an option, consider giving them a say in timetabling, who they work with and what sort of work they do,” suggests Woolrich.
The employee value proposition should also articulate the underlying principle: that blue-collar workers deserve workplaces that adapt to their needs.
“Features and principles that work in tandem make for a more effective EVP.
“That could be things like doing away with 9-5 schedules, allowing employee choice over work location, or giving employees greater control over how they get their work done.”
Knowing where to focus your employee value proposition
Identifying the perks or features that current and prospective employees find valuable only takes you so far, says Bars.
“To come up with an effective employee value propositions, you need to assess the reality of the employee experience as a whole,” he says. “That means identifying the areas where the business is failing to deliver for staff, not just the bits that are serving them well.”
Bars recommends surveying 20 per cent of your workforce to identify areas of concern, then following up with workshops to identify principles that your EVP should speak to.
“Senior leaders also have a role to play in these early stages,” he says. “They need to be asking themselves, ‘What do we want to be known for as an employer? And where are we struggling right now?’ The overarching aspiration for the business should be clearly defined too.”
Once you have outlined the basic principles of your EVP, the next step is to decide whether or not to create multiple iterations of the document – or ‘personas’ – that speak to different segments of your workforce.
“It’s not necessarily about ‘manager’ versus ‘employee’ – it’s about identifying segments that have different needs based on the type of work they do, their location and what motivates them,” says Sethi.
He suggests conducting surveys and focus groups to identify these segments, but Woolrich has a slightly different take.
“We try to steer away from creating too many subsets of an EVP. It becomes confusing and it’s difficult to deliver too many variations authentically,” he says.
You need to factor in the intersectionality that exists within each group. For example, while there’s plenty of data to suggest that working mothers would prefer flexible work hours, you shouldn’t discount their need for other EVP elements too, like competitive salaries and healthcare benefits.
You also shouldn’t assume that working fathers don’t also want things like flexible hours. Deloitte research from 2019 found that 59 per cent of working dads want their employers to provide more flexibility for them to spend time with their family. That number has likely increased since the pandemic too.
Woolrich generally begins by crafting a universal EVP, then spinning off personas for critical talent segments.
Next, he opens a dialogue with the current employees in that segment, encouraging them to articulate what they want from their EVP and what might attract prospective staff.
He provides an example: “DSM, a life and health sciences manufacturer based in the Netherlands, was struggling to attract critical talent because its corporate-level EVP messaging was not resonating.
“It created personas across its critical talent segments and encouraged those employees to generate their own EVPs to give the target talent the messages they would want to hear,” he says.
“This approach helped DSM personalise messages for its target segments and gave candidates an opportunity to connect with their peers inside the company.”
“If your EVP is going to inspire, engage, retain and get people to do their best work, it needs to represent who your people are, both at work and outside.” – Bhushan Sethi, joint global leader, people and organisations, PwC
All three experts agree that consulting employees throughout the EVP drafting process is important.
Sethi says it’s the best way to ensure that your staff feel comfortable aligning themselves with the principles laid out in the finished document – even when at home.
“The best companies blur the line between work and personal,” he says. “By that, I mean they take a stand on moral and ethical issues, and they reflect how their workers feel on those issues.
“That could be the CEO of a global technology firm taking a public position on the immigration of knowledge workers or a large bank taking a public position on addressing systemic racism through building economic security for their CALD [culturally and linguistically diverse] customers.”
Unifying a workforce through an employee value proposition
The experts quoted in this article all say their ideas and advice can be applied to organisations of varying shapes and sizes.
But there’s one element large companies in particular must consider when crafting an EVP: how can they use it to bring together a sizeable and often dispersed workforce?
That question was top of mind for Janelle Leonard when she became Chief People Officer at AMA Group in mid-2021. The ASX-listed automotive aftercare company had 180 sites across Australia and New Zealand, and many were former small businesses that had recently been acquired.
Leonard was determined to find one feature that would unite the company and create a sense of shared destiny, regardless of each employee’s geographical location. So, bolstered by executive support, she launched an employee share program. Now shares are issued to every AMA Group employee on an annual basis. The first issue, taking place this month, is valued at $1000 per employee.
“Giving employees ‘skin in the game’ in this way is unheard of in our industry. It sets our EVP apart from other employers,” she says.
And, importantly, it serves as a unifier across the organisation. When the program launched, AMA Group asked some frontline team members what it meant to them to be given shares in the company.
“They said they feel the company believes in them and is investing in them; they feel part of a community that’s building for the future,” she says. “The share plan is just one feature of our current program, which is about making AMA Group a great place to work as well as empowering the team at all levels to contribute to the EVP.”
Leonard’s next task is to create employee value proposition personas for critical segments in the AMA Group workforce.
“I believe that’s important,” she says. “But cohesion is important too. An EVP, for me, must speak to identity and purpose before it can speak to attraction and retention.”