Making the Most of an EVP
Few companies are using employee-value propositions as a valuable tool for recruitment, retention, engagement and even financial growth, a new survey finds.
By Kecia Bal
Fewer than half of companies polled in a new Towers Watson survey have a long-term plan for getting the most from their employee-value proposition, the employment deal that outlines the give-and-take between employer and employee.
Though the global professional services company's research shows organizations that use a proposition effectively are five times more likely to report employees are highly engaged and twice as likely to report achieving financial performance above their peers, only 43 percent of 207 companies polled have a long-term plan to support their proposition.
"I think EVP is still a relatively new concept, at least in the way we've been talking about it," says Laura Sejen, global head of rewards at Towers Watson. "I think it's really just a matter of HR management and leaders in various corporations continuing to get a little more sophisticated and more advanced."
Organizations should be defining their "employment deal" far more broadly than traditional concepts of compensation, she says. The survey found that 49 percent of companies with highly effective EVPs balance factors such as pay, bonuses and benefits with intrinsic factors, including work environment and teamwork, compared to 24 percent of employers with "low-effectiveness" propositions.
There are three core elements to the EVP, Sejen says: total rewards, the mission, vision and the job culture and people, the last of which she describes as "the nature and composition" of the workforce and the decisions companies make every day around hiring and retention.
"In our view," she says, "what we're trying to convey is it is the broadest definition of the deal between employer and employee and should describe the entire employment experience."
That leaves very little outside the realm of the employee-value proposition, according to Towers Watson standards, says Sejen.
"If it's part of what the employee experiences day in and day out, it's likely to be part of the EVP."
The challenge to HR, she says, is in both aligning the employee value proposition with their company or brand proposition and, especially, in differentiating themselves from other companies that compete in the same talent pool. A 2012 Global Talent Management and Rewards Study by Towers Watson showed that only 18 percent of 1,605 employers surveyed said they have differentiated their employee-value propositions from competing companies.
Even small steps toward implementing an employee value proposition can yield results, says Kerry Chou, senior practice leader of compensation, performance management and market pricing at nonprofit human resources association WorldatWork, based in Scottsdale, Ariz.
"I’m not sure that many companies have any detailed plan about how to get the most from their EVPs, so even a short-term plan would be a big step in the right direction," he says. "A good EVP and proper communication take time to create and deliver, and require input from many parts of the organization, not just HR. If there isn’t a plan, it’s just one of those things that falls between the cracks."
Follow-through is critical too, Chou says.
"Most importantly, it has to be an EVP that delivers on its promises," he says, adding that communication needs to be consistent across the board, which likely will require training those who represent the employment deal daily. "Otherwise it quickly gets discarded into the 'employees are our most important asset' file, to be ignored."
At American Express, HR leaders match their external image with their organizational culture and employee-value proposition, says Valerie Grillo, chief diversity officer.
"The future of our organization lies in our culture, or what we call the 'Blue Box' values of service, integrity and trust -- a set of eight values that every employee pledges to embrace and work by each day," she says. "The company’s 'Blue Box' values continue to reinforce our EVP in our employee communications and initiatives."
Connecting company values and communication has helped American Express stand out, she says.
"Align your communications and EVP strategy with the values of your company," Grillo says. "The way it operates in accordance with those values becomes the measuring stick for employees and prospective employees."
An effective employee-value proposition resonates no matter an employee's geographic location, demographics or position, she says.
"Ensure your EVP is relevant to a global audience," she says. "We’ve taken the time to ensure that messages resonate in the local language and with the local market.
"Make certain your EVP has 'runway,' which means that it can be segmented to apply and benefit unique audiences within the company (different worker types, generational differences, etc.)."
Brevity in an employment deal is difficult but worthwhile, says Mark Hornung, senior vice president at Findly, a global talent acquisition cloud service with offices in San Francisco and New Zealand that recently acquired the Bernard Hodes Group in the United States.
"It is easy to write a three-paragraph EVP, much more difficult to prepare one that is 25 words or less," he says. "Yet long-winded EVPs are often forgotten because they are not memorable or believable."
The greatest challenge in crafting a solid proposition, he says, is to avoid being one-sided on the part of the employer.
Looking at leaders in company culture and branding can provide guidance too, says Hornung.
"When Apple started its 'Think different' campaign, it took a weakness of the company -- its relatively paltry share of the personal computer market -- and turned it into a virtue. It was also grammatically incorrect. Despite those apparent flaws, that line has been credited with saving the company at a difficult time in its history. It was used as an expression of their EVP at the time, because Apple wanted people who were willing to look at personal electronics differently."