Employee Value Proposition

What is an employee value proposition?

An employee value proposition includes the benefits and perks employers offer to attract and retain the best talent. Benefits like a competitive salary, great work-life balance, in-office perks, retirement benefits and more helps companies make up an employee value proposition. 

Companies with great EVPs have the largest pool of talent to pick from, and therefore can attract and retain top performers better.  

A great employee value proposition is incredibly important – the reputation of a business as an employer determines how talented employees are, which in turn determines the growth and prosperity of the business itself. 

Employee value proposition vs Employer brand

There is a subtle yet important difference between an EVP and an employer brand. 

An employer brand is an external factor. It is what the outside world knows about the company as an employer and is built with marketing efforts, social media presence, employee testimonials and more. It is intangible, since it is the opinion of the public. For example, good reviews from past employees would improve a company’s employer branding. 

An employee value proposition is an internal factor constituting the set of benefits and perks offered by a company to its employees. It includes tangible aspects like salary, office perks, vouchers, retirement benefits etc; and intangible aspects like career development, work-life balance, job satisfaction, etc. 

A great set of benefits support and build a company’s employer brand, since the employer brand is a result of an employee value proposition. For example, past employees who enjoyed the perks and benefits of a strong EVP are likely to say good things about the company, improving the employer branding. 

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Importance of Employee Value Proposition

An employee value proposition brings significant benefits to the business. Here are a few:

Attracting top performing talent

Offering benefits and perks is a surefire way of attracting the most talented and best performing people to a company. A great EVP contributes to a positive employer brand, which makes people want to come work for the business. 

Reduced employee turnover

When employees are well-rewarded and looked after, they are more likely to stay with the business for longer. Long-standing employees have invaluable experience, insights and skill that cannot be replaced. 

Cost and time savings

Companies with low employee turnover enjoy greater time and cost savings, since resources are not wasted in finding replacements, training and retaining the new hires. 

Growth and performance 

A happy, engaged and experienced workforce is much more productive and can contribute more positively to the organisation. Without the interruptions to work that come with high attrition, employees can consistently deliver great work. 

Components of Employee Value Proposition

Here are the building blocks of an employee value proposition:

1. Salary and monetary compensation
2. Work-life balance
3. Career growth
4. Work environment
5. Company culture

 Each of these components can have tangible elements like cash compensation and remote work opportunities, or intangible elements, like a motivating culture and job satisfaction.

Salary and monetary compensation

The first and arguably most important value proposition is salary. Competitive salaries, bonuses and other monetary benefits like food coupons, vouchers, etc are the first thing most employees look for. 

According to research by JLL, the top reason employees seek a job change is higher pay, and an attractive salary was the most attractive EVP component to candidates evaluating a job offer. 

However, employees’ priorities and preferences are not fully centred around salary. Quality of life, to most people, is more important than earning a comfortable salary. 

Work-life balance

A good work-life balance is achieved when an employee is able to positively contribute at work while enjoying a peaceful, fulfilling life outside work. 

Work-life balance is the number one priority for employees at work, according to JLL. How do HRs ensure employees have a good work-life balance?

Work-life balance is achieved by providing employees paid time off, flexible working hours, or the opportunity to work remotely. Work-life balance looks different depending on the nature of work, but efforts must be made to ensure every employee has a balanced work and personal life. 

Balanced employees are happy employees, and happy employees are productive employees. 

For example, healthcare workers may not be allowed to work remotely, but can be encouraged to take vacation time off and relax so they may come back to work refreshed and motivated to do better. 

Career growth

Career growth as a component of employee value proposition is when employers provide employees with the opportunity to continuously develop their skills and advance in their roles. 

Employers who are invested in the personal and professional growth of their employees cultivate loyalty and retain their employees. Employees feel supported and motivated to continuously contribute positively to the workplace. 

Work environment

The work environment constitutes both the physical location of where employees carry out day to day tasks, and the intangible psychological safety and stability offered by such infrastructure. 

A good work environment can make employees feel excited and happy about coming to work everyday – for example, a company known for its great office space, with amenities like nap rooms, gyms, games, etc. 

Company culture

Company culture refers to the set of unspoken values and norms adopted by the employees of an organisation. Culture includes preferences toward remote work or in-office work, levels of collaboration, leadership styles, transparency, and more. 

Great company culture is very important to any employee value proposition, since it directly impacts the employer brand. Workplaces that are known to be great places to work typically attract highly talented employees who know the value of respect and transparency in the workplace. 

How to develop and improve employee value proposition

With the knowledge of what makes up an employee value proposition, we can now look into how to build a great EVP. 

Identify company goals

Before building an employee value proposition, it’s important to properly identify the company’s overall goals. Organisational goals are generally highly dynamic in nature, depending on factors like socioeconomic climate, inflation, demand and more. Keep these in mind when building or updating your EVP. 

Conduct employee research

The next step is to understand what employees need. This is also highly dynamic in nature, and data can be collected with the help of benchmarking studies, surveys and focus groups. Make sure to account for differences in culture, age and other demographics. For example, younger employees may value work-life balance more than a big salary.  

Employer USP

A USP, or Unique Selling Point, is what makes any business different from other businesses as an employer. Identifying this USP is the first step to building a value proposition. For example, Atlassian’s USP is that they allow their employees to work from anywhere in the world. 

The USP should align with the overall company goals. For a company that is looking to be more collaborative and transparent, a fully-remote USP might not work. For a company that values flexibility and freedom more, fully-remote is a great USP. 

Define tangible and intangible benefits

At this point, list down the tangible and intangible benefits the company is able to offer to their employees. These can include – competitive salaries, free snacks in the office, flexible working hours, health insurance and more. 

Make sure to be authentic and transparent, and never promise more than what can be delivered. Building trust and credibility with your talent pool is more important than anything, and employees value transparency. 

Measurable employee value prop

Finally, ensure your employee value proposition can be adequately communicated to employees and success can be measured with metrics like retention, attrition, employee engagement and cost per hire. 

Companies with best employee value proposition

Here are a few companies world-renowned for having a great employee value proposition. 

Google

One of the biggest companies in the world, Google is known for offering an extensive range of benefits to employees, including free meals, fitness centers, health and wellness programs, and more. 

Google focuses on a collaborative workplace where employees are supported, empowered and given everything they could possibly need to keep such a large yet agile corporation going. 

For example, Google famously installed sleep rooms in their offices, encouraging tired employees to take a nap if needed so they can get back to work feeling refreshed and energised, instead of feeling forced to get through the day with coffee. 

Netflix

Netflix’s main focus is on freedom and autonomy. They offer unlimited vacation days and the highest salaries in the market to build a culture of transparency, accountability and responsibility. 

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