TEST

What is an Employee Value Proposition (EVP) & its meaning in HR?

Discover what an EVP is in HR: Learn how a strong Employee Value Proposition attracts talent, boosts retention, and enhances engagement with expert tips from HumanX HR.

For
Business & HR Managers
12
min
read
16
Dec 2022

What is an Employee Value Proposition (EVP)?

An employee value proposition is used to attract and retain top talent. An employee value proposition communicates the ‘value’ and benefits that a company provides their employees in exchange for their time, performance in the workplace. This can be used to promote employee engagement as well as a branding and recruitment exercise, for attracting new talent. A great employee value proposition will be aligned to the purpose and strategy of the organisation and nurture behaviour and performance that is aligned to values.

An employee value proposition is a strategic approach to building a benefits package and then communicating that - both internally, and externally. EVPs (employee value propositions) allow companies to remain competitive, regardless of their size, and demonstrate creativity in how they’re listening to employees’ needs. A good EVP will be motivating and attractive; it should clearly outline how talent can be expected to be rewarded for outstanding performance, quality skills and capabilities - quantifiable and otherwise.

Have a flexible working-from-home rhythm or 4-day workweek? This is part of your employee value proposition. Retention bonuses and early finishes in summer? Also part of your EVP. A strong diversity and inclusion culture? You guessed it – part of your EVP.

Core Components of the Employee Value Proposition (EVP) Framework

A holistic and well-considered employee value proposition framework typically covers these 5 components.

Remuneration - The foundational element. Employees need to know what they're being paid and feel the exchange is fair. Pay transparency is increasingly valued, and organisations need a considered approach to how compensation is communicated.

Benefits - Both cash benefits (bonuses, commission, short and long-term incentives) and non-cash benefits (flexible work, remote work, extra annual leave and team building activities).

Career development - Growth that means something. The best learning and development programmes focus on technical and human skills, and connect to where employees actually want to go - not just what the capability matrix requires.

Well-being and happiness - Happy people make better employees. Wellbeing support, psychological safety and a healthy work environment all belong here.

Purpose - Connecting employees to the organisation's reason for existing addresses a real emotional need. For-purpose organisations often have some of the most compelling EVPs because their identity is already clear.

HR must consider what they can do in the context of their budget and capacity. No organisation can offer everything. The goal is to make informed, strategic choices about which elements matter most to your people - and build from there.

Why is Having an Employee Value Proposition (EVP) Important?

It’s important to clarify that an EVP should not be a thoughtless list. The whole strategic element of creating an employee value proposition requires you to conduct research; ask your talent what is important to them, what motivates them, what their attitudes are towards how they are currently rewarded, represented and celebrated.

This is what makes an employee value proposition important. It allows companies to give their employees exactly what they want, rather than making assumptions.

That research process is itself a signal. It shows your team that you're invested in their experience, not just their output. And when you act on what you learn, it builds the kind of trust that reduces turnover.

According to research from Gartner, “Organisations that effectively deliver on their EVP can decrease annual employee turnover by just under 70% and increase new hire commitment by nearly 30%.”

What are the Benefits of a Strong EVP?

Still wondering why it’s important to have an employee value proposition? Here are some top-line EVP benefits:

Attracting talent

An EVP is a great asset when recruiting, as it tells a candidate precisely what they’ll get in return for working with you. There are plenty of ‘standard’ or unresearched EVPs that you’ll often see listed on job ads i.e. “our greatest strength is our people” or “we value hard work” but by having an EVP that’s individual and tailored specifically to the rewards, benefits and type of work culture you’d like to instil, the proposition becomes more appealing. A well-developed EVP can make companies first-choice for candidates in their market - it’s one step closer to becoming a ‘destination’ company.

Improve your employer brand

While there is a definite distinction between the two, an employee value proposition can help to improve your overall employer brand. An employer brand refers to a company's reputation with the wider world. And when employees and potential employees clearly understand the benefits of working for a company (thanks to a compelling and clearly communicated EVP), this is likely to influence everyone else's thoughts about how you do business and what it’s like to work for you.  Today, employers should be conscious of how their brand and reputation are being discussed on job review sites and apps, such as Glassdoor, Indeed and LinkedIn.

Produce genuine candidates

Your employee value proposition must be authentic and specific to your company. By clearly communicating what it would be like to work for your business, you’ll attract genuine candidates who share your core values and are more likely to succeed within the organisation. Similarly, those who don’t align with your EVP will be less likely to apply.

Retain top talent

In the world of talent management, attracting top talent is only half the battle. The other half, and arguably the more critical one, is retaining that talent. Once you've succeeded in bringing on top-notch individuals, the last thing you want is to see them walk out the door. This is where a robust EVP comes into play as your secret weapon for retaining valuable employees. It ensures that your employees feel valued and appreciated, reducing turnover and the associated costs.

Builds positive workplace culture

An EVP demonstrates to employees what the company values; it will encourage progression and help to set clear expectations for performance management. All of these elements work towards building positive employee relations and a supportive workplace culture.

Driving Employee Engagement

Employee engagement is the foundation of a thriving and innovative workforce. It's the spark that ignites creativity, productivity, and commitment among employees. An Employee Value Proposition (EVP) that harmoniously aligns with your company's mission, values, and culture can be the driving force behind elevated levels of employee engagement. Engaged employees are more productive, creative, and invested in the success of your organisation.

Boosting Performance

In the world of business, performance is the linchpin upon which success hinges. High-performance employees are the driving force behind an organisation's growth, innovation, and competitiveness. A well-crafted EVP plays a pivotal role in not only recognising and rewarding contributions but also motivating your workforce to excel. When employees feel that their contributions are recognised and rewarded, they tend to perform at their best. A well-crafted EVP motivates your workforce to excel, ultimately benefiting your bottom line.

You may have noticed that the EVP benefits are largely interconnected. As a HR agency, we are often contacted by leaders at the C-suite level who have a business problem that they do not understand and cannot diagnose; my best employees are leaving, and we do not understand why.

How to create an EVP Step by Step?

To get started creating an employee value proposition, consider these steps:

1. Get feedback from employees 

Gather input on what your business’s current qualities are, plus the motivations and behaviours of your current employees. If you need assistance running a survey or focus group, our outsourced HR experts can help.

2. Conduct market research 

Who are the ‘destination’ or ‘first choice’ companies in your industry? Alternatively, which organisation’s values do you admire and look up to? What are they offering? What is available on job review sites? What data has been collected in your industry?

3. Strategise 

Collate this information and prioritise which benefits you want to include in an EVV. HR business partners are able to support at this stage; often, a company cannot offer every single benefit there is. As HR experts with a focus on workplace experience, we help companies make informed, data-led decisions.

4. Communicate 

Once it’s ready, make sure to communicate your EVP with the entire company and externally. You’re going to need a unique HR strategy for each audience.  Everyone needs to know why it’s so awesome to work at your company!

5. Feedback, evolve, grow 

Never stop listening to your employees; they really are your greatest asset. If you build a culture of open communication, this will be an easy step. HumanX can help you manage the feedback, evolve processes and grow after you’ve developed your employee value proposition.

Tips for Defining an Employee Value Proposition in HR

At HumanX, our team has decades of hands-on experience helping companies build effective employee value propositions (EVPs). Over the years, we've refined a reliable EVP framework that consistently delivers results. A well-crafted EVP combines external market insights with genuine internal feedback to create something authentic, competitive, and appealing.

Blend internal and external research - Relying solely on employee feedback risks bias - people may not be fully candid with their employer. Relying solely on market data means missing what your existing team truly values. The best EVPs draw from both.

Stay aligned with market expectations - If flexible work is the norm in your industry and you don't offer it, candidates will notice. An EVP that's out of step with what talent expects signals that the organisation isn't listening.

Give it personality - An EVP is not a benefits table. It should reflect what makes your organisation genuinely different - your culture, your way of working, the things that don't show up in a salary band. Avoid corporate language that could apply to anyone.

Avoid the two most common pitfalls:

  • Under-selling your non-cash benefits and cultural signals
  • Publishing an EVP that doesn't match the real experience of working there

The second one is particularly damaging. If your EVP promises something your culture doesn't deliver, you'll attract people on false pretences - and lose them quickly.

At HumanX, we care about the humans that your EVP will support. Our employee retention consultants understand how crucial a strong employer brand and EVP are to the success of the company and its people. Do not hesitate to get in touch with our HR consultants to discuss developing your company’s employee value proposition.

Employee Value Proposition (EVP) Examples

Canva

After being awarded the ‘#1 Place To Work In Australia’ in 2018, Canva has remained a contender thanks to a great EVP. Some elements of its wonderful work culture and benefits include free breakfast and lunch, relocation benefits, flexible working hours, memberships to fitness studios and more. As of 2021, its net retention rate is an impressive 152%.

LinkedIn

As part of the #LinkedInLife EVP,  the company has a comprehensive benefit and compensation package, covering everything from childcare to life insurance. Plus, employees get a “paid shutdown” at the end of the year, in which the company closes for a week to celebrate.

Nike

Nike’s “Win as a team” slogan could not be more on-brand for a sports-centric company. Its investment in the health of its employees via free access to Nike Sports Centres, fitness discounts, and therapy and coaching for staff and family members aligns strongly with the type of employees they look for.

But if you’re wondering how to improve an employee value proposition without access or budget for such perks, it is still possible.  “Employee satisfaction with the EVP increases by 15% when it encompasses the human deal,” reports Gartner. What does this mean? In a sense, using a human-first HR strategy that treats your employees as people and not ‘another number’.

Three ways to appeal to the human deal include flexibility (hybrid and remote working), a shared sense of purpose, and building deeper connections by supporting individuals.

Download Free Guide

Learn more about Performance Appraisals and Process
Sign up for our newsletter and free resources with your email address:
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Share this post: