As unemployment rates drop across the world, talent attraction and retention has become a strategic priority in many organizations. In our latest Global Talent Trends report, almost half of HR leaders said they are concerned about talent scarcity, and 9 out of 10 C-Suite executives expect to see competition for talent increase in upcoming years.
For decades, leaders and managers have searched for ways to increase employee commitment by developing compelling employee value propositions (EVPs). Considering the expense associated with turnover, this makes sense. Researchers have estimated that turnover costs range from 90 to 200 percent of an exiting employee’s salary. When turnover increases, the social fabric of an organization weakens, intangible knowledge and skills are lost, operational effectiveness decreases, accidents rates rise, customer service and quality suffer, and customer satisfaction declines. All of these consequences can derail performance.
So what’s the best way to develop a compelling EVP? To answer this question, we analyzed our global normative database, focusing on employee attitudes about seven critical aspects of their organization’s value proposition: reward for performance, compensation, benefits, career development, support for wellness, sense of belonging, and meaningful work. We wanted to understand the extent to which employees’ satisfaction with each offering is related to five important outcome measures: their level of motivation, overall satisfaction, advocacy (i.e., willingness to recommend the organization as a place to work), commitment, and intention to stay. Using meta-analytic techniques, we analyzed data from over five million employees working in 149 organizations and 172 countries.
Meta-analytic correlations (see table below) reveal four main findings. First, we found significant relationships between all seven EVP elements and all five outcome measures. Second, career development yielded the strongest correlations with most outcome measures. Third, our results suggest that employees are more likely to be motivated to go above and beyond when they feel they are doing work that is personally meaningful. And finally, both a strong sense of belonging and support for wellness are highly correlated with employee commitment and intention to stay.
Correlation, of course, does not prove causation. But taking into account the amount of data that was analyzed, as well as the size of the relationships that emerged, these results raise critical questions for anyone seeking to build a high-commitment work environment.
To answer these four questions, data is required. By assessing the extent to which your workforce is satisfied with the various elements that make up their total rewards—and then evaluating the relationship between satisfaction levels and workplace behaviors and performance outcomes—you can determine the unique mix of EVP offerings that will attract, motivate, and retain your employees.