Your employee value proposition (EVP) needs to evolve with a changing world
Employees’ core expectations about work are changing. Many are now searching for a caring corporate culture that prioritizes their mental and physical health while providing work-life balance and career paths – sustainably.
To attract and retain talent, it is critical to ensure your EVP reflects a changing world.
The importance of keeping your employee value proposition (EVP) relevant
For an employee value proposition to be effective, it must meet the real-world experiences of your employees. Our world has changed, in parts irrevocably, so to be truly compelling, your EVP must reflect and meet those changes.
EVPs are an integral part of any total employee benefits and rewards strategy, which are based on an implicit psychological contract that defines the employer-employee relationship.
The ‘commodities’ in exchange, for much of the 20th century, were pay, benefits, and job security in return for a lifetime of commitment from employees. The ‘loyalty contract’ was common.
Things are different now. The pandemic has fundamentally reset employees’ priorities, and they are wanting more than extrinsic motivators and financial incentives. In order for your employee value proposition to remain relevant – attracting and retaining talent – the ‘value’ part of your EVP must evolve with, and reflect, what your employees prize.
Employees’ work-related needs and desires vary based on their:
- Job level
- Caregiving status
What do your employees value in 2023? And how do you begin reviewing and evolving your EVP?
Employee value proposition must haves
A growing body of research — including Mercer’s — shows that while pay and benefits are important, employees now want jobs that:
- Enable flexibility, work-life balance, and their chosen lifestyle
- Prioritize their physical and mental wellbeing
- Are intrinsically motivating
- Provide a sense of meaning and purpose
- Connect them to a community
- Have career paths and opportunities for growth and development
What employees want now is the ‘lifestyle contract’.
Future-proof your employee value proposition
Work-centrality is declining as employee core values shift, so organizations need to evaluate their employees’ experiences, EVPs, total rewards strategies, and benefits packages against the world in which we now live.
Four steps to evaluate the appeal of your current employee value proposition and identify the future needs of your workforce:
During volatile times, it is important to learn about the personal experiences of your employees. One of the best ways to do this effectively — particularly with remote employees — is to conduct online focus groups.
Powerful and unexpected insights come from asking open-ended questions, allowing employees to share their thoughts. And advanced qualitative methods, like natural language processing, should be used to develop rich descriptions of employee experiences.
In the absence of effective EVPs, employees become distracted, distressed, and start looking for other opportunities.
When evaluating the critical needs of your workforce, it is important to take a whole-person perspective, considering the wide range of life concerns that employees carry with them inside and outside work. We use a holistic needs assessment to help employees identify their most pressing concerns in four critical life domains, their:
- Work life,
- Personal life,
- Financial life, and
- Health and well-being.
Then, using various statistical techniques, we develop evidence-based insights about what employees need now, and in the future.
In an ideal world, organizations would meet the needs of every employee. But practically speaking, organizations must make tradeoffs and design rewards packages that are realistic and cost-effective. Conjoint research is one of the most effective ways to identify these tradeoffs.
When Mercer conducts a Conjoint study, we start by asking organizations to identify the specific EVP elements they are considering offering to their employees. We then take those elements and arrange them in a series of balanced design comparison sets, usually consisting of three or four elements. Research participants are then asked to select which element they value the most and the least.
The resulting analysis generates a rank-ordered score for each element, reflecting the value that employees place on each employee value proposition offering. If your organization is seeking clarity on how best to invest in your people, this is the information you need to make evidence-based choices.
One-size no longer fits all. More and more people want to tailor their own work experiences and establish idiosyncratic employment contracts, arrangements, or personalized deals with their employers. The pandemic has accelerated this trend, raising a range of challenges that vary based on employees’ career stage, their personal lives, and their future aspirations. As you redesign your EVP, it is critical to determine the extent to which employee experiences and preferences differ across employee populations.
We use a set of research techniques, including cluster analysis, profile analysis, and personas, to identify preference patterns and determine the extent to which EVP offerings need to flex to meet the needs of a particular workforce segment. Based on our research, we find that employees’ work-related needs and desires vary based on their:
- Job level, and
- Caregiving status.
EVPs are an essential part of workforce reward and incentive solutions
To compete, organization must offer the right rewards, benefits and employee experience.
Designing competitive pay structures and policies that align to business strategies allows organizations to retain top talent and establish their brand in the market – an effective benefits program goes a long way towards improving the employee experience and can be seen as a differentiator in the war for talent. As we continue to work in new, virtual ways and as jobs in many organizations continue to evolve, there is a renewed opportunity to invent market-leading total reward strategies to drive performance.