Employee Value Proposition: All You Need to Know

Written by Neelie Verlinden
14 minutes read

The employee value proposition (EVP) is rapidly gaining importance in organizations as it plays a key role in attracting, engaging, and retaining top talent and elevating your entire employer brand. But what exactly is EVP, and how can you develop a compelling employee value proposition that highlights the unique benefits and opportunities your organization has to offer? Let’s explore this in more detail. 

Contents
What is the employee value proposition?
What’s the difference between your EVP and your employer brand?
Benefits of a strong employee value proposition
5 key employee value proposition components
How to develop and improve your employee value proposition
Employee value proposition examples
FAQ


What is the employee value proposition?

An employee value proposition is the unique value you offer as an employer to your employees in return for their skills, experience, and commitment to your company. This includes components like salary, benefits, rewards, career development, and work-life balance, as well as your values, mission, social purpose, and organizational culture

Essentially, your EVP aims to identify and communicate all the unique benefits and experiences that employees can expect from choosing to work for your organization. It also communicates why your company is the right place for the employees who thrive there and helps you attract the right people who align with your unique offering.

Pawar and Charak (2015) define the employee value proposition as the one of a kind arrangement of benefits an employee gets consequently for the skills, capabilities, and experience they convey to an organization.

Employee Value Proposition Components
Learn about the 5 key components of an employee value proposition below.

What’s the difference between your EVP and your employer brand?

Your employee value proposition is internal, communicating to employees what they can or will receive in return for their commitment to the organization. It’s the promise you make to your workforce.

Meanwhile, your employer brand is external, and refers to the reputation the outside world, especially potential employees, has of your organization. It’s the message you share with the world about your company’s mission, values, what you stand for, and what it’s like to work with you. 

However, the two do overlap. Your employer brand is the outward, creative expression of your EVP. Your EVP defines what employees gain from working with you, while your employer brand tells other people about it. 

In other words, your EVP is the core of your employer brand. It should characterize the substance of your organization and why it is unique.

Check out our Learning Bite to learn everything you need to know about the Employee Value Proposition!

Benefits of a strong employee value proposition

Investing in your employee value proposition can bring tangible benefits to your business. Why exactly does it matter to your organization?

  • Attracting and retaining high performers – An honest and compelling EVP helps you zero in on your unique offering as an employer by highlighting the benefits and opportunities available to employees in your organization. This will help you attract and retain the people who resonate with what you offer and have a high chance of succeeding in your organization. Gartner reports that companies that effectively deliver on their EVP can lower their annual employee turnover by as much as 69%.
  • An engaged workforce – A well-defined EVP provides your employees with a clear understanding of the organization’s mission, vision, and values, which, in turn, boosts engagement and investment in their work. For instance, research shows that organizations with strong employee value propositions increase new hire commitment by almost 30%.
  • Cost savings – By attracting and retaining the right people, your organization will save money on recruitment and retention costs. 
  • Business performance and organizational growth – With a more engaged, productive, and satisfied workforce, business performance will improve, which will lead to a boost in profitability and growth. In fact, highly engaged teams can increase profitability by 23% and improve customer loyalty by 10%.
  • Improved transparency – When an organization is open and honest from the start about what they expect from employees and what they will receive in turn, this builds mutual trust and respect in the employee-employer relationship.

5 key employee value proposition components

Employee value proposition comprises several elements of what an organization offers to its employees, namely:

  • Compensation
  • Work-life balance
  • Stability
  • Location
  • Respect

Combined, the key employee value proposition components determine how your employees and candidates perceive your organization as an employer.

Let’s take a closer look at each of the elements of the employee value proposition model.

Compensation

The first element in the employee value proposition framework is compensation, or compensation and benefits. This includes how satisfied employees are with their salary as well as additional rewards such as bonuses and aspects including your evaluation system. Fair compensation is one of the 7 HR best practices.

Compensation is not equally important to everyone, nor is it everyone’s top priority when searching for a job. A study by JLL found that 54% of those surveyed want to earn a comfortable salary, and this was their second priority after achieving a good quality of life. Meanwhile, higher pay was the number one factor for risking a change of employer.

Dr. James Chitwood, Consultant at PerformanceCulture.Expert, advises companies to broaden their view of compensation. “Most companies have only a transactional perspective when it comes to compensation, a person does X to get Y. There are many ways to compensate an employee that are not pay-related,” says Chitwood.

“A tenured employee who performs at an exceptional level may have a strong interest in the environment, writing creatively, or training new employees. How does a company give employees time to perform activities that value the company and also align with the employee’s personal intrinsic values?”

Work-life balance

Work-life balance encompasses paid time off, holidays, flextime options, retirement plans, and the opportunity to work from home and remotely. It has a tremendous impact on employee well-being.

There’s no magic, one-size-fits-all kind of recipe for work-life balance because different employees will value different benefits. For example, new parents are much more likely to value paid parental leave than graduates. Similarly, those in an older age bracket are more likely to be interested in retirement plans and pension schemes compared to Gen Z. That’s why being familiar with your employees’ needs and preferences is vital to creating an attractive EVP that will help you compete in the labor market.

One thing that is clear across all generations is the desire for a hybrid way of working. The EY Work Reimagined 2022 Survey found that 80% of all employees want to work at least 2–3 days remotely per week, yet 22% of employers have said that all employees must return to the office five days a week. 

A large global survey by McKinsey found workplace flexibility is valued highly by most demographics. Meanwhile, research by JLL found that 38% of employees feel stressed and overwhelmed by heavy workloads. 35% expect to be encouraged by their employer to take time off for themselves during the day and cultivate greater work-life balance.

Stability

In a fundamental sense, stability in the workplace refers to physical and psychological safety that enables employees to work in a confident, safe, and effective way.

For example, for deskless workers, stability can also mean predictable work schedules and work hour guarantees.

Another type of stability is career stability. It refers to the opportunities available for your employees to develop themselves and further in their career path within your organization. This is where your learning and development efforts come into play.

Offering training, mentoring and coaching initiatives, effective performance management, internal promotions, and other career opportunities are all crucial in providing your employees with a long-term outlook on their career with you. Especially younger employees are looking to work in a company where they have opportunities to grow and progress through the ranks. 

Location

Location is about much more than the simple location of your office. You could think of it as location in the broadest sense of the word: a positive work environment, strong organizational culture, and level of autonomy.

With the growing popularity of hybrid and remote work models, organizations need to rethink the meaning and role of the location component of EVP.

Respect

The final element in the employee value proposition model is respect. Respect is about positive relationships, support, team spirit, company culture, and your organization’s core values and beliefs. McKinsey’s research found that uncaring and uninspiring leaders play a large role in why people left their jobs. 35% cited it as one of their top three reasons for leaving.


How to develop and improve your employee value proposition

Here are a few tips on how to develop a compelling employee value proposition for your organization that aligns with your overall mission and helps you attract, retain and engage the right people.

1. Identify what makes your company unique

The first step to developing an EVP for your organization is to brainstorm the features and benefits that set you apart from the brands you compete for talent with. You can start by asking the following questions:

  • What is your unique offering?
  • What can you offer employees that other organizations can’t?
  • Why would someone want to work for you rather than for another employer

A People and Talent Leader Mariya Hristova proposes three steps to start developing an effective EVP.

  1. Talk to the leadership to discover the identity of the company. The EVP is not just about benefits or ping-pong tables; it should stem from the company identity and what you are looking to achieve. Are you looking to be a supportive company, a high-performance company – both?
  2. Create a plan on how that identity matches up with things like salary, benefits, policies (pay transparency, for example), and culture artefacts (now think about the ping pong tables).
  3. Understand how that identity matches up with the current experience of employees in their day-to-day work. This can be done via employee engagement surveys or via interviews. If there is a mismatch, investigate further and think about how you want to position the EVP – as a goal you are working towards or as the current reality of working at your company.

2. Understand employee needs

Understanding what your employees need and want is essential because your EVP should aim to meet employee expectations and aspirations. As we already discussed in the employee value proposition model, needs and desires will vary based on the demographic and individual circumstances of your employees, particularly when it comes to the work-life balance and stability component.

Be sure to collect feedback and conduct research, surveys, and focus groups to determine what your employees need. Take into consideration the different backgrounds, experiences, and perspectives that employees bring to the workplace, and how they impact their expectations and priorities. That allows you to build an inclusive EVP that appeals to a diverse range of employees and will help you attract and retain a more diverse workforce.

Bruna Vasconcelos, Head of People at a hiring platform Revelo, recommends conducting one-on-one sessions with employees to delve into the themes arising from the collected data.

“Putting the time in to have these conversations allows you to further explore the survey results while giving employees a safe space for exchange. They can elaborate on their perceptions and experience with the company, and you can ask questions about preferences for changes they’d like to see improved,” explains Vasconcelos.

3. Align your EVP and your company mission, values, and goals

Your EVP must encompass and align with the organization’s unique mission, values, and goals to be cohesive and effective. This can involve highlighting how the company’s values are reflected in its culture, policies, and practices and how they support employee development and growth.

By highlighting the company’s mission and purpose in your EVP, you foster a shared sense of purpose among employees.

Showcasing your mission and values in your employer branding will also help attract candidates who align with those values and are a good fit for your culture.

4. Be authentic

It’s essential that when you create your company’s EVP, it’s authentic, transparent, and in line with the organizational culture, values, and practices. This builds valuable trust and credibility with employees. 

For example, if you promote work flexibility in your job interview process, or healthy work-life balance on your website, make sure you follow through on these promises and reinforce the message for all employees through your messages and actions. 

Involving employees in the development process can help develop a more authentic and compelling EVP that resonates with them.

5. Make your EVP tangible and inclusive

Make what you present in your EVP tangible by linking it to things like flexible working hours, access to learning and development opportunities, paid parental leave, or annual bonuses. Highlight how specific policies, programs, and initiatives contribute to the overall EVP. You can also share stories and examples of how these efforts have benefited employees.

By connecting your EVP to real-life experiences, you can make it more concrete, relatable, and compelling to employees.

6. Address different stages of the employee life cycle

There are seven stages in the employee life cycle: attraction, recruitment, onboarding, retention, development, offboarding, and happy leavers. An effective EVP focuses on what your organization offers at all stages of the cycle. 

For example, during the attraction stage, you might promote your hybrid work model in your job descriptions. During the onboarding stage, you may provide your employees with online training or learning programs to give them a solid foundation to begin their role. And to retain employees, you might offer an increase in salary for every year an employee completes with you, rewards for exceeding targets, and the right technology to help them perform in their role.

According to Sean McPheat, CEO of management and sales training organization MTD Training Group, it’s key to identify the gaps between the current EVP and what employees are looking for in their work experience, and act on your findings.

“Develop an action plan to address the gaps identified. This can include changes to the organization’s compensation and benefits packages, professional development opportunities, and culture,” says McPheat.

7. Integrate employer branding, employee value proposition, and employee experience

Integrating employer branding, EVP, and employee experience allows you as an employer to deliver on your promises to employees through what you offer and how you deliver it. The integration of these three key components of the employee-employer relationship boosts employee engagement. That has a positive effect on performance and productivity, and reduces turnover. 

To do this:

  • Consider combining all these practices into one dedicated team,
  • Define who you are as an employer and who your ideal employee is,
  • Understand employee expectations,
  • Audit your current proposition to determine areas for improvement, and
  • Adjust and monitor accordingly. 

8. Communicate your EVP effectively

Once you’ve created your EVP, the next step is to communicate it effectively to stakeholders, employees, and candidates. Think about how you can bring your EVP to life and make it relatable and compelling to your audience. 

For example, you can develop a communication strategy for candidates and showcase your EVP through employee testimonials on your website, job descriptions, and social media channels. Whereas for your employees, you may communicate it through team updates with managers, 1-on-1s, company newsletter, and monthly company presentations.

9. Measure success

The final step to developing a successful EVP is to set a specific group of metrics to help you track the impact of your EVP and pinpoint areas for improvement. Useful metrics include employee retention rates, employee engagement, and reduced cost per hire.

Continue to refine your EVP over time based on your findings.

Employee value proposition examples

Let’s take a look at what a great EVP looks like in the real world.

Deloitte

Deloitte made it a strategic priority for 2021/22 to launch a new EVP and reward strategy. In it, they clarified what they stand for as an employer – ‘Passion for Purpose’, ‘Be the true you’ and ‘Never stop growing’ – and what they find important in their relationship with employees. 

A new reward strategy, more competitive compensation, and a clear distinction between performance and development all link to Deloitte’s values, purpose, and strategy to emphasize personal growth, purpose, and inclusion. These have helped create a healthier, inspiring workplace where employees can be their best selves. 

Patagonia

As a leading outdoor clothing brand, Patagonia prides itself as an ethical, sustainable, environmentally aware organization that is fighting the global climate crisis. It recently donated all its annual profits to a fund to help fight climate change. The company champions improved sustainability in its supply chain, offers free repairs to customers through its Worn Wear project, holds environmental training days for employees, has a bike to work week and a ride-share program, and even a composting program.

At every opportunity, Patagonia translates their ethical and environmental values into their EVP, not just for employees, but for candidates, customers, and the wider world. 

The result? A staff turnover that is three times lower than average. Patagonia offers its employees purpose and the chance to create a positive impact in the world through the work they do each day.

WD-40

After the pandemic had mostly subsided, WD-40 employees expressed a desire to continue working remotely. In response, they created a “Work From Where” philosophy which stated, “We don’t care where you work from, but we do ask that you use our corporate values to make your decision.”

One of those values is “creating positive, lasting memories in all relationships.” This encouraged employees to weigh whether they were contributing to the organizational community by choosing to work from home, and to discern for themselves when working remotely was appropriate and effective and when it wasn’t. Following this philosophy, most employees chose for themselves to work in the office, and in a recent survey, 90% of employees said the company culture has improved. 

This is a clear example of what happens when relationships of several elements in the EVP are considered.

For more real-life examples, check out our article featuring employee value propositions of 11 inspiring brands!


On a final note

Your EVP is a promise to your employees and, if you keep it, will boost engagement and trust in you as an employer. Following through on your EVP can even turn your current employees into the best possible brand ambassadors.

In a time when employees increasingly attach value to an organization’s reputation as an employer, your employee value proposition and employer brand are essential to attract and retain top talent, boost performance, reduce turnover and recruitment costs, and meet business objectives. 

FAQ

What is a strong employee value proposition (EVP)?

A strong EVP:
– Is unique to your organization,
– Aligns with the company mission and goals,
– Meets the needs of your employees,
– Is well communicated,
– Integrates employer branding and employee experience, and
– Is tracked through key metrics so that it can continually be refined.

What’s the difference between your EVP and your employer brand?

Your EVP communicates to employees what they can hope to receive from you if they work at your organization. Your employer brand refers to how you present your organization externally as a potential employer. In other words, employer brand is the outward, creative expression of your EVP.

What are the key employee value proposition components?

An EVP is made up of five key elements, which are: compensation, work-life balance, stability, location, and respect.

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Neelie Verlinden

Neelie Verlinden is a digital content creator at AIHR. She’s an expert on all things digital in HR and has written hundreds of articles on innovative HR practices. In addition to her writing, Neelie is also a speaker and an instructor on several popular HR certificate programs.

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