Written by
Changeboard Team

Published
17 May 2015

Building a successful employee value proposition

17 May 2015 • by Changeboard Team

HR's advisory role

There has been a shift in focus with HR taking on a more advisory role on the talent and organisational issues that are now central to business development and success. As a result, HR functions have received considerable investments in areas including outsourcing, technology systems upgrades, strategic activities succession management and workforce planning.

The need for this shift in focus has been exacerbated to some degree by the global economic and financial crisis, which has led to a transformation in employees’ attitudes toward their roles and the companies they work for.

This transformation has manifested itself in a considerable decline in employees’ satisfaction with their organisation’s Employment Value Proposition (EVP), the set of attributes that employees and candidates perceive to be the value they gain through employment within an organisation.

Employee satisfaction levels

Recent research conducted by Corporate Executive Board’s (CEB) Corporate Leadership Council (CLC) has quantified this and has found that employees’ satisfaction with their organisation’s EVP has fallen by an average of 14% since the end of 2006.

This owes in large part to increased market and organisational changes – like restructuring, staff layoffs and strategic shifts – as a result of the recession and has meant that many employees’ roles have had to change to encompass new responsibilities. This in turn has led employees to increasingly place value on roles that align with their own personal interests.

Our recent European-wide survey shows that “job-interest” alignment is now the single most important attribute of the EVP that organisations can use to drive employee commitment (up to 58% improvement in commitment levels if done effectively).

Three common mistakes (EVP)

As organisations are increasingly struggling to find the talent they need to execute on new growth ambitions, the challenge becomes to identify a competitive EVP that is able to both attract and retain critical talent segments.

Across our best-practices analysis the CLC has typically found three mistakes that organisations make when creating a competitive EVP:

1. Failing to deliver on the promised EVP. Only about 40% of European employees believe their organisation is effective at delivering on a promised EVP.

2. A one-size fits all EVP that doesn’t account for global variation in preferences. Geographic differences explain 72% of the variation of EVP preferences – far more than age, gender and ethnicity differences.

3. An overly generic EVP that doesn’t stand out in the labour market. Very few candidates in the labor market can separate EVP differences across potential employers.
Corporate Leadership Council members such as Holcim Group, the global cement maker, have already worked to identify the attributes that now matter most to their key employees.

By taking a strategic approach and studying its labour market competitors, Holcim has gained a clear insight into how it needs to position its EVP to differentiate themselves and attract the best candidates across the global market place.

Steps HR needs to take

Recent research by the Corporate Leadership Council suggests that despite heavy investments into HR departments, many are still struggling to deliver a successful Employment Value Proposition (EVP) aimed at providing the organisation with the talent it needs to grow.

According to our research, heavy programmatic investment in HR departments accounts for only a third of the impact HR departments have on employees and the wider organisation. In fact, much bigger impact comes from the effectiveness of the relationships HR departments have with business unit leaders to help create and deliver on an effective EVP.

One of CEB’s members, an international chemical company, wanted to strengthen its EVP to be more competitive at attracting and retaining key talent. By harnessing CLC data to run a series of employee workshops the company was able to identify a long list of 14 EVP attributes that are universally important to employees across different countries, age groups, genders and business units.

This was then narrowed down to five key competitive attributes following further workshops, which were then ‘stress tested’ within each business area to identify whether the delivery of each attribute would need to be adapted by business area.

This example illustrates how effective EVP strategies are built in close co-operation with both business leaders and the wider employee group to ensure that the EVP is in close alignment with the organisations strategic priorities and to ensure support in effective delivery of key EVP promises.

HR performance link to talent initiatives

Our research on HR-line cooperation around key strategic talent initiatives like these show that by increasing the strategic focus and effectiveness of the HR-line relationship organisations can improve employee performance by up to 25% and revenue and profitability by up to 9%.

A key pre-condition for the HR-line relationship to have this impact is, however, to identify HR business partners (HRBPs) who possess high levels of business acumen, the ability to find innovative solutions to talent challenges, who can demonstrate strong leadership, and who have great knowledge about strategic talent management activities (e.g succession management).

With these core skills, HRBPs and the entire HR function will be best equipped to both drive and see impact from critical talent management initiatives such as creating and delivering a competitive EVP.