The pandemic has changed the relationship between people and their work, and the employee value proposition (EVP) must evolve to reflect these changes.
Organizations today spend an average of $2,500 per employee on employee experience every year, and such investments are expected to continue.
Attempts to modernize the EVP typically add on features — from upskilling workers to keep up with emerging digital skills to offering pet insurance. These efforts are costly and are not yielding the expected benefits. Employee engagement hasn’t improved tangibly since 2016 — and then came COVID-19.
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“The reality is that three shifts in the work environment have eroded the impact of the traditional EVP: Employees are people, not just workers; work is a subset of life, not separate from it; and value comes through feelings, not just features,” says Carolina Valencia, VP, Gartner.
Conventional employee value proposition is on shaky ground
Persistent engagement and attraction challenges, and the human crises of 2020, have proven that the management principles underlying the EVP are outdated. EVPs have long been managed with three principles in mind: defined around employees, designed to provide an exceptional employee experience and focused on delivering features that match employee needs.
“Clearly, this traditional approach to employee value proposition is falling short,” adds Valencia. Recent Gartner research of 5,000 employees and 85 HR leader interviews on EVP practices, challenges and solutions indicates that the problem could be too much focus on “what we give employees” rather than “why.”
Here are some telling signals that point to deepening weakness in traditional EVP:
- Engagement — Engagement, which drives both performance and retention outcomes, has remained relatively flat since 2016.
- Attraction — Only 29% of functional leaders report they have all the talent they need to meet current performance requirements. This challenge is especially pronounced in the most competitive areas of the labor market, such as IT and data science roles.
- Intent to stay — Only 23% of HR leaders believe most employees will continue working in their current organization after the pandemic ends.
- EVP satisfaction — Only 31% of HR leaders think their employees are satisfied with the EVP, and 65% of candidates report they have actually discontinued a hiring process due to an unattractive EVP.
HR leaders must evolve their EVP management by delivering a more human deal centered around the whole person, designed to provide an exceptional life experience and focused on the feelings and features that match employee needs. The new human deal comprises five components: deeper connections, radical flexibility, personal growth, holistic well-being and shared purpose.
The new EVP delivers a more human deal
In delivering on all aspects of this human deal, people perceive emotional value in employment in the organization by enabling them to feel more understood, autonomous, invested, cared for and valued. This reinvented EVP, designed to deliver an exceptional life, not just work, experience, results in higher employee satisfaction.
“When HR leaders can generate these emotions in employees, both organizations and the human beings that comprise them win,” says Valencia.
- Deeper connections — Help employees feel understood by strengthening their family and community connections, not just work relationships.
- Radical flexibility — Empower employees to feel autonomous by providing flexibility on all aspects of work, not just when and where they work.
- Personal growth — Ensure that employees feel valued by helping them grow as people, not just as professionals.
- Holistic well-being — Reinforce that employees feel cared for by ensuring they actually use holistic well-being offerings, not just make them available.
- Shared purpose — Make sure employees feel invested in the organization by championing action by the organization on societal and cultural issues (and don’t just make statements about “purpose.”
Key actions to build a more human EVP
Here are some key actions leaders in the organization can take to build their new human-centric EVP:
Build deeper connections by integrating inclusion goals into day-to-day work and talent processes, focusing on direct family benefits that match employee and organization needs, and training managers on how to identify employees’ trust through empathetic conversations.
Provide radical flexibility to all by giving employees flexibility — choices within team-established boundaries, determining which activities within a role can be flexible and identifying manager-tested flexibility solutions.
Create personal growth opportunities for employees by providing them with objective career coaches and empowering them to design development that meets their personal needs.
Ensure holistic well-being by holding employees accountable for personalizing well-being progress, encouraging mental health champions to hold honest conversations about mental well-being, and establishing clear dos and don’ts for how managers can support employee wellness.
Take action on shared purpose by establishing cross-organizational ownership of societal issue decision making, use peer coaching to hold employees accountable for taking personalized action on societal issues and prioritize societal issues aligned with the organization’s goals.