Your Employee Value Proposition

Part of The PIRATE Way — Stories about scaling up engineering teams

Photo by Priscilla Du Preez on Unsplash

An Employee Value Proposition (EVP) is the unique set of benefits and rewards that an employer offers to its employees in exchange for their skills, capabilities, and commitment. It describes the total experience that employees receive when working for an organization, including tangible benefits such as compensation, benefits, and work-life balance, as well as intangible benefits such as culture, purpose, and career development opportunities.

Having a strong EVP offers several benefits:

1. Attracting and Retaining Top Talent: A well-defined and communicated EVP can help you attract and retain the best employees. Employees can better decide whether they fit in with the organization’s goals and work style when they have a clear understanding of the company culture, mission, and benefits.
2. Boosting Employee Engagement: Employees who feel valued and appreciated by their employer are more likely to be engaged and productive. A strong EVP can help foster a sense of belonging and loyalty among employees, leading to increased job satisfaction and motivation.
3. Improving Employer Branding: A strong EVP can help you differentiate your organization from others in the industry and create a positive reputation in the job market. This can improve your employer branding and make it easier to attract top talent.
4. Reducing Turnover and Recruitment Costs: By attracting and retaining top talent, a strong EVP can reduce employee turnover and recruitment costs. This can help your organization save time and money on the hiring process.
5. Increasing Revenue and Profitability: A strong EVP can have a positive impact on your organization’s bottom line. Engaged employees are more productive and innovative, which can lead to increased revenue and profitability.

Studies have shown that companies with strong EVPs have lower turnover rates and more engaged and high-performing employees:

• A study from Harvard Business Review found that companies with a strong EVP had a 69% lower turnover rate compared to companies with a weak EVP. Similarly, a study by LinkedIn found that organizations with a strong EVP had a 28% lower employee turnover rate compared to organizations with a weak EVP.
• It’s also worth noting that a strong EVP can have a more significant impact on certain employee segments, such as high-performing employees or those in high-demand job roles. For example, a study by Towers Watson found that organizations with a strong EVP were four times more likely to have employees who are highly engaged and two times more likely to have employees who are high performers.
• Finally, based on Gartner’s data, organizations that effectively deliver on their EVP can, for example, decrease turnover by just under 70% and increase commitment by nearly 30%.

In essence, the EVP sets you apart from other companies and makes you an attractive employer. According to Gartner, an EVP is made up of five components: Deeper Connections, Radical Flexibility, Personal Growth, Shared Purpose, and Holistic Well-being.

• Your Employee Value Proposition refers to creating a sense of belonging and community within the organization. It leverages attributes such as camaraderie, diversity, equity, and inclusion, coworker and leadership quality, and family support, among others.
• Radical Flexibility is all about giving employees the freedom to work where, when, how much, how, and with whom they want. Attributes like where to work, work-life balance, workspace, and a blameless atmosphere are leveraged in this component.
• Personal Growth is about providing employees with opportunities to develop their skills and progress in their careers. Attributes like professional and personal development, job interests alignment, and equal opportunities are leveraged in this component.
• Shared Purpose is about having a clear mission that employees can get behind. Attributes like social responsibility, environmental responsibility, and work purpose are leveraged in this component.
• Lastly, Holistic Well-being is about ensuring employees’ overall well-being by offering a comprehensive set of benefits and encouraging their use. Attributes like compensation, health benefits, vacation/holiday, and well-being offerings are leveraged in this component.

I don’t believe that, at this point, I am the only one who can see the correlation between this and what we covered in our ‘Motivation Theory’ post. Therefore, I hope that you can start connecting the dots as well.

As an engineering leader, you probably shouldn’t build an EVP alone. Still, it’s crucial to get involved and ensure that the HR leader and other senior executives foster your company’s EVP as the foundation for the organization design you are going to deploy.

References:

1. Gartner: “Employee Value Proposition Guide”
2. Harvard Business Review: “The Impact of Employee Engagement on Performance”
3. LinkedIn: “Inside the Mind of Today’s Candidate”
4. Towers Watson: “Talent Management and Rewards Study — Global”

Remember: This is a blog post from the series “The PIRATE way”.