From recruitment to retention activities such as getting the best employees on board, engaging them significantly and managing their retention for longer period is not a cakewalk for the HR teams. For engaging and retaining employees for longer term defining interesting employee value proposition is a must. So what is Employee Value Proposition (EVP)? EVP is a set of associations and offerings provided by an organization to their employees in return for the skills, capabilities and experiences an employee brings to the organization. EVP is an employee-centered approach that is aligned to existing and future workforce planning strategies.
Only high salary packages and variety of perks no longer works enough to attract and retain top talent from an industry. The most sought-after global employers are treating employees like internal clients and are strengthening their employee value proposition as a strategy for attracting and retaining top performers. It is also become closely related to the concept of employer branding. In the recent times EVP is also referred to as the Employer Brand Proposition (EBP).
The value proposition should consist of people policies, processes and programs that exhibit the organization’s commitment to employee growth, management development, ongoing employee recognition, corporate social responsibility etc. Depending on the value proposition, employees choose to commit themselves to an organization. Progressive organizations actively communicate their value propositions in all recruitment efforts, and in offer letters. Frankly speaking, the EVP should take the focus away from compensation as the ‘primary offer’.
EVP at Goldman Sachs is “At Goldman Sachs, you will make an impact”. Goldman Sachs is leading global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and individuals. Founded in 1869, the firm is headquartered in New York. This firm recognizes its people as its greatest asset; Goldman Sachs believes that the determination and dedication of their people can only help them serve their diverse clientele to generate long-term value to their shareholders and contribute to the broader public.
At every step of their employees’
careers GS invests in them, and ensure their interests are maintained. Excellent
HR policies, competitive work environment, meritocracy, and good compensation inclusive
of other benefits remains focused in GS’s work culture. The firm believes in
maximizing individual potential for increasing commercial effectiveness. It
reinforces the firm’s culture. That’s the reason the firm has most competitive
employees wanting to join them.
There are two sides to an employee value proposition: 1) the value (skills,
experience, personality, culture, intelligence etc.) a candidate has to offer
an employer and 2) the value (growth opportunities, recognition, work culture,
benefits, career growth etc.) an employer has to offer candidates.
The employee value proposition should not be mystified with a company’s vision and mission statements, core values or culture code. The EVP is about the reciprocity between employers and employees mutual benefit and value to one another. It is about employment opportunity and employer brand.
When organizations encompass the wrong attributes or fail to differentiate their value propositions from their competitors they fail to retain their talent. Also, when organizations show a major gap between promise and reality, it results in reduced employee commitment.
It is always good to present an authentic, differentiated employee value proposition. HubSpot’s EVP is “We’re building a company people love.” HubSpot is a developer and marketer of software products for inbound marketing and sales. It was founded by Brian Halligan and Dharmesh Shah in 2006. Its products and services aim to provide tools for social media marketing, content management, web analytics, and search engine optimization. HubSpot is growing bigger in size. They have about 44,500 customersand more than 2,200 employees on their roll. Their annual revenue is more than $375 million.
HubSpot believes in documenting company’s culture to illuminate their values and guiding principles and mapping where it wants to go. Codifying company culture is more than just putting the current culture into words. There is an element of aspiration added to it. By outlining the definite roadmap, the company has defined the core values and actions. Employees who are already working in the company and those who want to join it know what they are getting into. HubSpot’s clients like the company’s employee engagement and therefore the company’s business is growing.
In the modern management styles organizations are realizing that when they invest in developing and delivering a strong EVP, they attract significant talent and boost employee engagement. For example, an organization can reduce the compensation premium by 50% and reach 50% deeper into the labor market when candidates view an EVP as attractive one. Organizations that effectively deliver on their EVP can decrease annual employee turnover. The EVP must define the people essence of the organization – how it is unique and what it stands for. It must encompass the central reasons what will make people proud to work in the organization. An inspiring vision is crucial to make sure that EVP is unique, relevant, and compelling. When integrated into all aspects of a business, a strong EVP will help retain top performers and attract the best external talent. It is better to understand that building a company culture to present in the EVP does not come solely from business leaders but from the team members living and breathing organization’s business values. It’s the people who work in an organization who develop ideal company culture from its vision to reality. It’s vital question to answer why someone would choose to work at your organization.
