What Is Employee Value Proposition? Definition And Key Components

A Strong employee value proposition (EVPs) will set you apart from your competition and can help you attract high quality candidates and retain your best employees. Creating an effective EVP involves learning what your current employees enjoy about your company and what your candidates are looking for in their ideal workplace.

The employee value proposition (EVP) is a part of employer branding. It is one of the ways companies attract the skills and employees they desire and keep them engaged. It is how they market their company to prospective talent, and also retain them in a competitive job market. It is meant to communicate the values and culture of the organization, as well as take the focus off remuneration as the sole reason for working there. The benefits, when done correctly, are a more committed, happier, and productive workforce at a cheaper cost, which are the main goals of any employee- engagement  strategy.

What is an EVP (Employee Value Proposition)?

An Employee Value Proposition is the promise you make as an employer to your employees in return for their commitment. This promise entails the sum of all the benefits and rewards employees receive from the organization they work for.

EVP is about defining the essence of your company – how it is unique and what it stands for. It encompasses the central reasons that people are proud and motivated to work there. It is crucial to make sure your 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 talent.

An EVP must be unique, relevant and compelling if it is to act as a key driver of talent attraction, engagement and retention.

5 Important Benefits of Employee Value Proposition

Having a compelling EVP can attract passive candidates, which makes up a large percentage of the global workforce. A strong EVP stands out from your competitors and is relevant to your employees’ wants and needs. It should represent your company’s values and make your employees feel proud, motivated and encouraged to do their best work each day.

5 benefits of employee value proposition
5 benefits of employee value proposition

Designing an EVP that is unique to your organization will considerably improve your talent acquisition and retention, giving you an employer brand that has an edge over your competitors. Here are a few reasons why the employee value proposition is crucial.

#1 Attracting Top Talent

There’s no denying that recruitment marketing has changed drastically. Prospective employees are becoming more and more discerning in their job search.

An EVP acts as a key driver of talent management and talent acquisition. Therefore, consistent and efficient communication of an employee value proposition that enhances employer branding has become extremely important.

#2 Retaining Top Talent

In this tough market, it is important to attract the right talent. But retaining high-performing employees is equally important, if not more.

Losing talented employees means losing productive people who are hard to replace. It’s time-consuming and expensive. This is why Fortune 500 companies make extensive efforts to retain their top talent.

#3 Optimizing Recruiting Expenses

Firstly, if your company’s employee value proposition is compelling, you will get more applications from talented candidates.

Consequently, your human resources team will need to spend less on recruiting agencies, job ads, social recruitment strategies, and other talent acquisition expenses.

Essentially, your cost per hire will fall. Secondly, because an EVP also helps retain top talent, it saves on additional recruitment and training costs. This translates to a sizable amount as many company resources are poured into educating and training fresh candidates.

#4 Building a great corporate culture

When employees know what their company stands for, they are more motivated and engaged at work. This is particularly true when employees’ values match their company’s values.

Consequently, when organizations care about this match, they are more likely to build a great corporate culture their employees will appreciate.

#5 Improving employee experience

An organization’s EVP also impacts the overall employee experience in the workplace. Employee-driven companies define their value propositions based on their workforce.

This ability to focus on what people truly care about is what brings the biggest competitive advantage to successful organizations.

7 Key Components of A Great EVP

For an organization to be successful in attracting the most skilled employees from the market, it needs to have an employee value proposition that can help create an environment where people aspire to work for it. Similar to aspirational buyers that look to buy expensive products that are perceived to add to their prestige.

An employee value proposition is more than just a marketing exercise. These campaigns go beyond compensation to understand what employees need to be successful at work each and every day. Find out the 7 Key components required for a brilliant EVP:

#1 Financial Benefits

Companies with the best EVP often offer one of the most competitive financial benefits. These include not only the salary of the employee but also other benefits such as the potential to acquire company stocks, bonuses, etc.

#2 Fringe Benefits

Other than salary, bonuses, and company stocks, organizations also offer different fringe benefits. These include paid leaves, health insurance, provident fund, the option to acquire discounts on company products or services, and even fully paid vacations.

#3 Job Security

Many people might be risk-averse and look for jobs that are stable and provide job security, whereas others might look for better-paid jobs. However, the value of job security cannot be discounted when considering EVP. This is because a stable job can help alleviate employee stress, whereas uncertainty in the extension of contracts or the potential of being fired due to trivial reasons can result in an environment that might repel skilled individuals from working for the organization.

#4 Potential for Career Growth

An employee often needs more than just financial benefits. With time, people also aspire to climb up the career ladder and aim to get designations that might make them feel accomplished in their careers. Some employees might even opt for a lower-paid job just because they get the opportunity to work at a larger scale or have a better designation.

#5 Working Environment

A company might offer a great salary and other financial benefits but how long can you work for an employer that might be too demanding, with a toxic working environment. Employees can get burned out and even suffer from physical and psychological issues because of a demanding working environment that does not value the welfare of the employee.

#6 Corporate Culture

Would you work for a company that might offer a great salary package, fringe benefits, looks after the welfare of its employees but has a corporate culture that might encourage environmental degradation and malpractice? While some people might consider financial benefits above other considerations, not everyone is willing to work in an environment that might not fit with their sense of morals.

The corporate culture of an organization consists of many aspects including beliefs and behaviors that form the relationship between the management and employees. Hence, the corporate culture of an organization can be a major factor affecting its employee value proposition.

#7 Job Satisfaction

Some people stick to a job for their entire career, whereas others frequently or periodically switch jobs. Job satisfaction is a major factor that can enable retaining existing employees and attracting skilled workers from the job market.

Companies that look after the well-being of their employees also try to make the working environment more attractive, so they feel passionate about their job and improve employee engagement.

The above-mentioned list of factors play a major role in job satisfaction, such as job stability, financial and fringe benefits, the scope for maintaining a healthy work-life balance, etc.

Final Note

In a time where candidates increasingly attach value to an organization’s reputation as an employer, your EVP and Employer Brand are essential. But the importance of an Employee Value Proposition goes beyond attracting new talent.

Your EVP is a promise to your employees and one that, if you keep it, will boost people’s engagement and their trust in you as an employer. Living up to your EVP can even turn your current employees into the best possible ambassadors for your Employer Brand. All the more reason to carefully think about your Why before you start communicating about the What and the How!

FAQS on Employee Value Proposition

What is a employee value proposition?

An employee value proposition is the set of benefits you offer employees in return for the skills, experience and qualities they bring to the position.

Who is responsible for EVP?

It’s important for your executive management to be involved in the EVP development process. This ensures that your employee value proposition is aligned with the company’s culture, mission and business goals.

What is an EVP strategy?

The EVP is an employee-centered approach that is aligned to existing, integrated workforce planning strategies because it has been informed by existing employees and the external target audience.

What are the 5 main components EVP?

1. Financial Rewards
2. Employment Benefits
3. Career Development
4. Work Environment
5. Company Culture

What makes a good employer value proposition?

An effective Employer Value Proposition should reflect the external demands, your competition, the internal reality and the strategic context of your company. Besides, you also must include the values and principles represented by your company.

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