A successful business relies heavily on recruiting and retaining top tier talent. HR departments are losing the upper hand with this because qualified job seekers know all too well that the demand for their skills is highly coveted.
This problem is intensifying as imminent retirements and an aging workforce are speeding up the need to recruit competent talent. To cope, industries worldwide are being forced to either fill up the positions with less quality talent which is resulting in increased turnover and paying heavily to obtain talent.
To tackle this challenge, Human Resource departments (HR) need to develop a clear employee value proposition (EVP). Failure to do so will not only damage your company’s reputation and make it very difficult to attract skilled talent but also your mistake will be a competitor’s gain.
Every successful EVP requires HR to think as a job seeker would by answering the question: “How does the organization I work for benefit me?”
In this article, we will break down for you the main elements that make up a successful EVP.
What is EVP?
An EVP can be defined as how job candidates perceive the value they would gain by committing to a corporation. It is a set of concrete attractions that businesses to use as a magnet for drawing in high-end talent. Besides enticing qualified candidates, a well-executed EVP can significantly help HR to retain them.
At its core EVP requires providing attractive monetary and non-monetary benefits, bet keep in mind that the requirements are constantly evolving to include such things aa a network of support, employee recognition, and ethical standards.
Therefore, EVP should not be looked at as just a “benefits” package, but rather a comprehensive set of assets that ultimately encourage employee commitment and maximize the talents an employee brings to the company.
Whether you already have an established EVP or are just getting started, the first step HR needs to take is to evaluate the business’s current condition and determine what can be improved. Once that step is thoroughly completed, HR can draft a plan with actionable goals.
EVP Surveys
To build a successful EVP you need to know what employees want. It’s not as complicated as you may think… just ask them! If you presume to know what benefits employees want, not only may you be wrong, but you would be missing a valuable opportunity to stress how important your company values its employees.
If done the right way, an EVP survey can unmask the truth about your employee’s satisfaction. With the information provided by the survey, HR can gain devise ways to meet those needs to keep current employees on board and use it to attract new talent.
For an EVP survey to be successful, HR professionals should collaborate with all department leaders and managers in advance to best define the survey’s purpose, strategies, and goals.
Communication and trust are two key factors associated with employee satisfaction. If done correctly, EVP surveys can help improve these two critical areas, strengthen the overall survey response rate, and encourage truthful responses.
EVP surveys should be done at least once or twice a year. That way, you will continually be on top of what your employees are thinking.
Inclusive Rewards Package
Salary and financial regards are understandably the main features of a successful EVP. According to a Stack Overflow survey, salary and other monetary benefits is the most important issue for candidates when they apply for positions.
Research the job market in your area thoroughly and always be aware of what competitors are offering for the role. Be sure to consistently review your compensation packages, because the competitive marketplace means financial benchmarks are constantly fluctuating.
Even though the salary is the central driving force to attract seasoned talent, remember that it’s still just a piece of the big puzzle when it comes to compiling an effective EVP. Money can’t hold up on its own merits in an aggressive marketplace. Research shows that money isn’t the best defense against marketplace attrition, as, for every 10% rise in pay, employees are only 1.5% more likely to stay on with the company.
An enticing EVP mixes in rewards like; vacation, bonuses, and other soft perks, such as health insurance, computer and equipment grants, stock options, and parental leave. Even though the salary is the central driving force to attract seasoned talent, remember that it’s still just a piece of the big puzzle when it comes to your EVP. Wages can’t hold up on its merits alone in a competitive marketplace. Research shows that money isn’t the best defense against marketplace attrition, as, for every 10% rise in pay, employees are only 1.5% more likely to stay on with the company.
Employee Engagement
Many companies make the mistake that employee engagement means the same thing as employee satisfaction. A satisfied employee might show up for their daily shift without complain and work diligently to collect their paycheck, but that same employee would not necessarily go the extra mile when needed.
Employee engagement is the level of excitement and enthusiasm an employee feels toward their job. An engaged employee doesn’t just come to work to collect their paycheck. An engaged employee invests all their strength both physically and emotionally to make a meaningful difference for the business.
Engaged employees lead to improved business results. According to Towers Perrin research, organizations with a highly engaged workforce enjoy a 6% boost in net profit margins. Furthermore, a survey by CEB found that there is a 24-47% increase in employees recommending other professionals to the company when there is a high level of employee engagement.
Organizational culture goes hand in hand with employee engagement. A Columbia University study found that culture directly affects job turnover; in a business with good organizational culture, the job turnover is 13.9% annually, whereas the likelihood of job turnover in a poor one is 48.4%.
The study also found that more than 90% of participants surveyed said that that culture to them was very important and that only 15% of them said they were satisfied with their company’s culture at the time.
The first step to building a positive culture and boost employee engagement is to foster honest communication and trust between staff and management. It goes a long way to increase employee engagement when their ideas are recognized and valued because employees value respect for their work. Such recognition needs to be authentic and convey the message that an employee’s efforts are vital to the success of the company.
Company loyalty and engagement also relies heavily on building office friendships. Of course, you can’t force team members to be friends, but you can create opportunities that lend to camaraderies, such as arranging social gatherings and activities.
“When employees possess a deep sense of affiliation with their team members, they are driven to take positive actions that benefit the business,” says Gallup in its 2017 State of the American Workplace.
Career Development
The importance an employee places on career development is often overlooked by employers. People never want to feel stagnant in their careers. It is estimated that 87% of employees value learning and personal development the most. This can include such things as management training, stipends for education, and give preference to job vacancies. Employees, regardless of talent, expect to learn different things and develop new skills while on the job in order to further climb up the totem pole.
By placing trust in your employees and offering them room for advancement, organizations empower them to challenge themselves and be rewarded for their efforts. The lack of career development will easily drive away any prospective talent and will easily put retention rates at high risk.
According to Mercer’s Global Talent Trends report, career development and meaningful work were key components in generating greater EVP. The analysis measured five outcomes: overall satisfaction, levels of motivation, advocacy for an organization, commitment, and retention. Study results found that career development and meaningful work affected these outcomes more than compensation, benefits, support for wellness, and a sense of belonging.
Stay Interviews
As opposed to an exit interview where the answers are likely to be worthless, a stay interview gives you valuable insight into what the organization can tweak in order to retain and attract new talent. They are also more effective than employee satisfaction surveys that test how an employee generally felt over the year.
Stay interviews provide an honest dialogue that allows you to better relate to your employees’ thoughts, opinions, and needs. It is also a good way to way to highlight the company’s brand and future vision which is something that attracts and retains talent.
“With stay interviews, managers have periodic discussions with their employees to determine how they are feeling about the organization, asking questions such as, ‘What motivates you to stay here?’ ‘What might cause you to leave?’ ‘Do you feel that you are challenged?’ ‘What changes would you make to your job if you could?’” says Elizabeth Malatestinic, a senior lecturer in human resource management at the Indiana University Kelley School of Business.
“The answers can be enlightening and can provide managers with frank feedback that might enable them to retain someone who might otherwise leave,” she added.
For a stay interview to generate optimum results, employees need to feel that the organization is committed to addressing the problems and need to have seen proof of it. Furthermore, the organization must have a strong foundation of trust and honest communication for the stay interview to be effective.