It's no secret that employee turnover is costly for a business. According to research by Oxford Economics, the average cost of turnover per employee (earning £25,000 a year or more) is £30,614. That means if you had to replace just three employees in one year, the cost of employee turnover will be close to £92,000!
With these numbers, it's essential employers focus on retaining their talent by developing an Employee Value Proposition ('EVP') that will make the company an attractive and desirable place to work.
A good EVP can also help businesses to organically attract top talent because they address all aspects (not just financial) of what employees really want from an employer: professional growth, competitive pay, great benefits, enjoyable culture, flexible hours and more.
What is an employee value proposition?
An employee value proposition is ultimately the way the perks and benefits of working are packaged by the employer to show what makes the organisation a great place to work.
Employee Value Proposition Examples:
- Provides innovative employee benefits around mental health and financial wellbeing
- Offers employee training programs to grow skills and knowledge in their field
- Provides flexible work schedules/time off so employees don’t have to sacrifice family or hobbies
Why is an employee value proposition important?
Employee value propositions are important because they allow employees to see all the great things that a company has to offer. If there's something about your organisation that you can't change easily - like an unattractive office location for example - offering a great EVP will give current and potential employees other reasons why working at your company will be a good choice for them.
Employee value propositions also demonstrate that you’re aware of employee needs/desires and what they really want from their jobs. It also helps to make your company look considerate and thoughtful, which are great characteristics to demonstrate.
It's important for your Human Resources Department to really think this through and distil your employee benefits into a clear EVP, because it can be the difference between having high employee turnover and having high employee attraction and retention.
What are the components of an employee value proposition?
There are many components of a strong employee value proposition starting with salary and benefits, to company culture and employee development.
Here are some of the core components to think about:
Salary and compensation: Salaries should always be as competitive as possible in order to attract top quality talent. However, for a lot of people, money isn’t everything. When people get to a certain level of salary, other things start to become important, like family, fulfilment and wellbeing. These are the often overlooked areas but have great significance to employees.
Employee benefits: Additional benefits are extremely important for employees because they can make a difference in their day-to-day lifestyle. Some examples of this could be offering a modern payroll system that gives employees greater control over their pay, offering sustainable pensions or salary sacrifice schemes so they can reduce their tax liability. Employers can also offer more flexible working hours and give employees the ability to work from home.
Career development: Employee development is important because it allows employees to grow both personally and professionally. This can help to improve employee performance, but also means employees will feel a sense of growth and progression which can contribute to lower turnover rates
Personal fulfilment: This one is often overlooked but the truth is, we all want to feel a sense of pride and fulfilment in what we do. This means that employees need to feel like their job provides them with a sense of accomplishment and contributes towards something bigger than themselves. Explore some unique ways your company can help employees to feel like they’re contributing toward a bigger mission and not just 'another cog in the machine.'
Work environment and culture: Nobody wants to work for a company that has a toxic culture or a negative work environment. Culture can be a tough one to change as it often starts from the top down, but If you already have a great culture and employees often praise your work environment, be sure to shout about it.
How to create a great employer value proposition (in four simple steps)
- Learn from your people: Speak to existing employees to find out what they currently like AND dislike about working for you. Be open to receiving criticism as this may give you some key insights and areas for improvement.
- List out the benefits: Using the core components mentioned above, create a list of all the benefits that you currently offer. Don’t just write about the features/perks but actually write out WHY specific perks would matter for people. For example, if you offer flexible working - be sure to talk about the benefits of that perk (i.e: spend more time with family, or work around your current lifestyle with our flexible working scheme).
- Write out your EVP statement: Create a structured employee value proposition statement by writing down the key points of what it’s like to work for your company. How do employees feel when working for you and what will they get out of it? Here’s a great EVP example by graphic design software company Canva
- Promote and communicate: Creating a great EVP will only work if your employees (or potential employees) know about it! So make sure to promote employee value proposition throughout the company. Publish it on your website (like the Canva example above) and promote the benefits you offer throughout your company. This way, employees will feel their employer actually cares about them and wants to improve not just work life, but personal life as well.
If you want to learn more about how PayCaptain’s innovative outsourced payroll software can help you create a truly amazing value proposition for employees, get in touch with our friendly team today.
