Give and get

Written by Richard Veal on 1 April 2014 in Features
Features

An effective employee value proposition is the key to getting and keeping the best, says Richard Veal

If your company has global operations, you have probably confronted the issue of attracting and retaining talented employees - or you soon will. Findings from our 2013 Global Talent Management and Rewards study1 confirm the issue: almost three quarters of employers globally report problems attracting critical-skill employees, and over half report problems retaining them. The numbers are even higher among companies in fast-growing economies, with 82 per cent and 71 per cent reporting problems attracting and retaining critical-skill employees, respectively.

The good news is that our research also reveals what it takes to get it right. Our recent Communications ROI report2 shows that companies that have adopted an integrated approach to reward strategy, design and execution in the context of an overarching employee value proposition are realising better outcomes.

These companies are:

  • less likely to report problems attracting and retaining critical-skill employees
  • five times more likely to report their employees as highly engaged
  • more than twice as likely to report achieving financial performance significantly above their peers.

And the differences are more pronounced when these findings are examined within the context of the regional economic conditions in which the companies are operating. In fast-growing economies, in which talent markets are tight and competition for the best talent is intense, the companies that get it right in terms of developing an effective EVP and total rewards strategy, design and execution are even less likely to report problems with attraction and retention, and two and a half times more likely to report financial performance that is substantially above their
peer group.

We know that employees respond favourably to having a formal EVP. Towers Watson’s Global Workforce study3 shows that, when the EVP is clearly articulated and communicated, employees better understand the ‘give and get’ of a career at their organisation, along with the value – both extrinsic and intrinsic – of staying. However, the research also warns that most organisations fail to realise these benefits due to shortfalls in their deployment of the EVP. Furthermore, fewer than half of their HR and communication teams have a long-term plan in place to support
that deployment.

Tailoring the EVP

To many organisations, the EVP remains a hidden gem that is unshaped, overlooked or not utilised to its fullest extent. Organisations can achieve a return on their investment in terms of improved HR and business outcomes simply by starting on the journey towards a fully evolved EVP and total rewards strategy.

The starting point is thinking through, and articulating, your organisation’s EVP. We are often asked whether organisations should have one EVP that applies to all employees or many EVPs directed to specific employee groups. In general, there should be one overarching EVP that applies to all operations and employees globally. It can then be tailored to meet the needs and preferences of pivotal workforce segments such as critical-skill employees, high potentials and top performers.

In a similar way, geographic or cultural differences can drive variations in the core EVP. An exception to the single-EVP approach might be for a highly-diversified holding company, where the deal across its entities is simply too different to be captured under one umbrella.

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 as diversity and representation from throughout the business is important if all employees are to be supported by it.

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, keep the steering committee updated and present recommendations to the 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, in order 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. It is common for companies to have thought carefully about programmes and policies but less common for them to think broadly about the return they expect.

Moreover, while it is fine to be somewhat aspirational with answers to the EVP element questions, it is also important to acknowledge the current state of the organisation. If, for example, a company wants to improve its innovation capability (and many do), how will it close the gap between the present state and the vision for its future? What rewards will need to be changed? Which elements of performance management tweaked? What cultural changes are needed?

This is the essence of EVP: your programmes must match your intent.

Articulating your EVP

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. Companies with low EVP effectiveness tend to discuss the deal in terms of the programmes they provide and how valuable they are. 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.

Some of the most interesting work we have done comes from conversations to determine how companies describe their deal. In the area of purpose and values, how might your working group members succinctly describe the organisation? Regarding jobs, culture and people, how do you articulate what is different about the people, what it is like to work at the company and what is attractive about the jobs there? For total rewards, what opportunities do employees enjoy and what benefits are offered? Getting to the essence or the common view is hard work, and the discussions are usually lively.

Communicating an EVP that is aspirational with no acknowledgement of the work needed to get there will cause frustration and cynicism in the ranks; it may, in fact, make it more difficult to attract and retain critical talent. Developing an outline of necessary programme and policy changes is a key step in designing an EVP that will drive the performance your company needs to compete. In fact, establishing the current state of the EVP, understanding its inherent strengths and building from there might be the simplest way to start. What many organisations fail to realise is that you almost never have to invent your EVP from a blank slate: any organisation of people who come together under a common goal have an EVP. The key is recognising its strengths and enhancing it through every touch point an individual has with that organisation.

From programmes to branding

Once the EVP elements are set, the employment brand work can start in earnest.

Most companies use their external or customer brand promise as the basis of their EVP work because it is key to understanding who the company is. Next, a well-thought-through creative brief lays the foundation for the EVP story. Interestingly, it is here that companies can lose their courage. They tend to play it safe, first by assuming they know what is truly relevant to their employees and second by shying away from emotion. When companies dive deep into understanding employees’ preferences, they are often surprised by what employees deem important. Armed with this knowledge, they can design relevant programmes and better articulate a meaningful EVP. Testing creative concepts with key employees outside the working group is also a critical step. Employees often choose the edgier approach (and the one that appeals more directly to emotions), while EVP working groups tend towards the safer version. Employee opinions can give the working group the courage to be bolder in their EVP communication and can help sell edgier concepts to management.

Once the EVP has been branded, launching a big campaign is not always necessary. Many companies prefer to simply start using the language and design in communication materials. They also help managers understand the EVP and how to position it with their reports. Companies with a strongly-articulated EVP can customise it for critical employee groups, emphasising elements of the deal that are most meaningful to them. For example, one client’s employee research showed that its pharmacists valued flexible time over other benefits so, in communicating to that group, that element of the deal was front and centre.

In a nutshell, it’s really about treating employees a bit more like consumers of the employment brand, focusing on what they care about and what motivates them, recognising them as individuals as much as possible. EVP needs expression, promotion and connection between the individual and the organisation.

Be deliberate and test for success

All companies have an EVP, even if it has not been formalised. The work described here 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 new EVP.

Active monitoring will tell you whether employees believe the deal is real and if your company is delivering on the EVP promise.

Again, adopting a more consumerist approach can make a big difference to understanding how much an EVP is soaking into the common consciousness. Retail marketing is now highly responsive to the actions of the consumer, adapting and targeting based on behaviours and trends in habits and biases. Enhancing EVP needs to operate in a very similar way, the ideal state being that the measurement of its strength is in an ‘always on’ state.

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.

About the author

Richard Veal is the reward, talent and communications UK lead at Towers Watson. He can be contacted via www.towerswatson.com/en-GB

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