Employee Value Proposition. March 2019
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- Katherine Douglas
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1 Employee Value Proposition March 2019
2 The landscape and worker expectations are changing 2
3 The landscape is changing 20+ to 2 More workers, different expectations, evolving technology The average lifespan on the S&P 500 has shrunk from 60 years to 15. It took the typical Fortune 500 company 20+ years to reach $1B+valuations. This decade s top startups take < 2years. Millennials are the largest generation, outnumbering Gen-Xers by 35M and Baby Boomers by 8M At the same time, Boomers are hitting retirement age, living a longer healthier life than previous Demographic shifts Today s worker expects hyperrelevant, heavily tailored, and more meaningful experiences. shifting expectations The value proposition has to articulate how the organization will not only meet, but exceed these expectations. Source: SingularityU, Innosight These disruptors will change how companies meet employee expectations Source: Consensus Dept., BLS, United Nations PopulationFund Boomers are closer with Millennials and as a result, behaviors are transferred virally between the two. Technology accelerates this. influencers The Millennial mindset is influencing what a good looks like. Candidates are now customers With easier ways to access information, candidates act like customers - shopping for jobs. Workers want the same experience in the workplace as they enjoy in their personal lives. Think BIG and work collaboratively Consider WORKER s wants, needs, and expectations Embrace the FUTURE and be prepared to address the changing landscape The people agenda must address these disruptors 3
4 Worker expectations are changing End-to-End experience Customers see products as increasingly commoditized, today it is end-to-end experiences that differentiate in the marketplace, as demonstrated by Starbucks and Tesla. Customized convenience Rather than incumbent providers, consumers are turning to new entrants that are more innovative and convenient such as Netflix, Uber and WhatsApp which have turned entire industries upside down. Everyday magic Consumers are now conditioned to expect products and services to gauge their wants and needs, learn, and then adapt to constantly improve the experience. Some leaders in include Nest and T-Mobile. Instant everything Customers expect on-demand access to information, 24/7 consumer service, enabled by social, mobile and access, that they get today from PayPal and Amazon Prime. Quiet simplicity Time-pressured consumers are looking for providers to help make the daily 'noise' of simple transactions disappear, and take care of distractions such as what they experience from Apple, Samsung and AlertMe KPMG LLP, a Delaware limited liability partnership and the U.S. member firm 2019 of the KPMG KPMG LLP, network a Delaware of independent limited liability member partnership firms affiliated and the with U.S. KPMG member International firm of the KPMG network of independent member 4 firms affiliated with KPMG International
5 Our point of view: candidates are consumers REC With easier ways to access more diverse information, candidates have begun to act as consumers, shopping for jobs using online postings as they would for merchandise on a retailer s website. They evaluate companies as brands, placing a premium on organizational fit and value. Think Differently The evolution of employee preferences The Challenge and new ways of job searching to satisfy these preferences, means that organizations must adapt current methods and adopt new strategies to remain competitive. Analyze the unique needs, drivers, and expectations of high-performing employees and offer these benefits earlier on during attraction activities think target marketing Identify and address the areas where gaps may exists between what is being promised to candidates and what is actually experienced by employees - think consumer report Align employee expectations and experience with the brand and culture to create ambassadors - think product sponsors 5
6 What is an Employee Value Proposition (EVP) EVP is an employment deal, a balance of the value that s expected to be contributed with the value expected in return. Articulating the employer s unique selling points for prospective candidates, the EVP should firmly reflect both the Talent Strategy and the Business Strategy. An effective EVP should be Achievable and Actionable It is a promise that can be brought to life at all levels of the organization and seen as an ongoing initiative Differentiated Distinguish you from competition, so that you are attractive to the type of talent that you wish to attract and retain This includes obligations and promises, the delivery of support to meet these promises, and the distinctive organizational brand associated with such provisions. Incorporate Business Strategy An EVP should authentically and accurately reflect the business strategy Consistently Communicated Be clearly communicated through the recruitment process, and all other people processes to appeal to external candidates 6 6
7 Employee Value Proposition (EVP) Framework Organizations need to promote what differentiates themselves across the six EVP dimensions that candidates measure when evaluating the attractiveness of an employer. Contained ONBOARDING PROGRAM AMBASSADOR PROGRAM RECRUITMENT MARKETING FORMAL LEARNING INFORMAL LEARNING ON-THE-JOB EXPERIENCE MISSION AND VISION v b VALUES AND BEHAVIORS INCLUSION AND DIVERSITY The Work LOCATION MOBILITY CAREER DEVELOPMENT SKILLS AND COMPETENCIES COMPENSATION AND BENEFITS RECOGNITION PROGRAM PERFORMANCE MANAGEMENT MENTORING PROGRAM TONE AT THE TOP FEEDBACK AND COACHING 7
8 Five critical elements to consider for a robust EVP An employee value proposition has been shown to increase engagement, motivation, and as a result, the performance of the organization. But these outcomes assume a high performing employee value proposition is in place. The question then left to answer is what are the critical elements you need to consider to ensure you have a high performing employee value proposition? Aligning Segmenting Embedding Measuring Refreshing The EVP must align with the business strategy, the vision and the values. It must encompass what you want to be known for in the future while differentiating yourself to remain competitive. The EVP must be segmented to meet the wants and needs of those who are your main source of competitive advantage. There are multiple ways in which the EVP can be segmented you need to pick the right ones for your organization. Embedding the EVP can often be the hardest part but this directly relates to whether the full benefits of the EVP can be realized. Successfully embedding will ensure the EVP is lived and breathed through the organization. The EVP needs to be monitored and refined as part of a living and breathing element of the corporate DNA. You can t manage what you don t measure. People process metrics, awareness metrics and differentiation metrics need to be monitored. The EVP must be continually refreshed to remain relevant. Either reactively in response to EVP metrics or proactively in the view of changing organizational context e.g. transformation. 8 *Source: PA Consulting
9 The EVP must be aligned across the organization To enable promises to be fulfilled a strong employee value proposition should link an organization's strategy and values, align to what they want to be known for and differentiating themselves from their competition these are the three lenses we look at: Strategy Values & Culture Brand / positioning Your EVP must be shaped by your organisations business strategy and priorities. Moreover, aligned with the strategic workforce plan the EVP must take into account the future talent required for the success of your organization rather than delivering only for the current workforce. Your EVP must be in line with future vision for the organisation what you want to be known for, your defined Values and Behaviours and your corporate culture. This needs to be future focussed and needs to align both internally and externally to the organization connecting the employee brand and the employee value proposition. Your external employer brand forms part of your EVP, therefore, they must align closely to support your organization to differentiate itself in the market. Better alignment of the EVP and the brand can lead to improved line of sign, delivering on employees expectations and encouraging employees to adapt behaviours that will deliver the brand promises. NEVER TACKLE THE EVP IN ISOLATION Corporate brand, employer brand, EVP, and internal brand are all inextricably interlinked, hence you should never tackle EVP in isolation. If these three areas are not aligned, it could be argued that there is the potential for mixed messages to be communicated as well as increasing the chances of psychological contract breach resulting in confusion and distrust. Only when the three areas are clear themselves should you look at the EVP. 9
10 Talent Segmentation for an effective EVP A critical outcome of an EVP is an increased ability to attract and retain the top talent for your organization, and hence segmenting your offering to meet the wants and needs of those who are your main source of competitive advantage can be highly beneficial. Organizations that have formally segmented and differentiated their offering based on type of talent exhibit 66% greater total shareholder return than those who do not do this. Four key steps to effective talent segmentation: UNDERSTAND WHAT IS UNDERSTAND WHICH TALENT UNDERSTAND WHAT EACH TAILOR YOUR EVP OFFERING DRIVING YOUR ORGANIZATIONS COMPETITIVE ADVANTAGE. IS MOST CRITICAL IN DRIVING THIS COMPETITIVE ADVANTAGE. GROUP OF TALENT REALLY WANTS FROM THE ORGANIZATION. TO ALIGN TO THE UNIQUE WANTS & NEEDS OF EACH INTEREST GROUP This will change with changing market conditions, competition and business strategy, and is critical to understanding which individuals and which skills will add most value to the organization This is not just your high performers, but those people with the specific skills and experiences to really add value given the market context. These are the people you most want to retain Aligning your top talent into a handful of talent interest groups with similar needs and wants enables the creation of a tailored EVP targeted at of these groups Understand the current challenges each group is facing, and the type of experience you want to create for them based on your understanding of their unique preferences and needs 10
11 Sustainably embedding your EVP Once you have defined an effective EVP, there are certain key get rights to ensure you roll-out and embed it in a sustainable and impactful way: The true impact of an effective EVP will only be delivered if it is effectively communicated and embedded throughout the organization. Communicate Internally An extensive internal communications programme is required to ensure your EVP doesn t merely sit on a shelf but is understood and valued by your employees. Communicate Externally Your EVP forms a key part of your external employer brand, attracting both talent and consumers. Ensure the market knows about the positive and exciting changes taking place! Be Innovative Communication presents an opportunity use exciting and innovative channels to capture your audiences attention think about social media, branding, videos etc Integrate your EVP into all other people processes Your EVP, the values and culture it represents must be firmly embedded within all people processes Train your Leaders It is the responsibility of Leaders and Line Managers to reinforce the EVP in day to day life to ensure it truly delivers you must train and equip your leaders to have those conversations. Define KPIs to measure impact and ROI Develop quantitative performance indicators in line with your organisations objectives - % improvement in employee engagement / % improvement in attrition etc Continually seek feedback, refresh and improve your EVP Ensure continual feedback channels are available to allow employees to comment and suggest further enhancements. Remind colleagues you have delivered on your promises Continue to refer to your EVP long after it is launched, highlighting where and how it has delivered on its promise. Use existing channels like CEO or quarterly updates, town halls or annual conferences. 11
12 The importance of measuring and monitoring the EVP You can t manage what you don t measure. Once defined and operational, the EVP needs to be monitored and refined as part of a living and breathing element of the corporate DNA. Measurement is therefore paramount it is not something that is done once a year but rather it is something that should be continuously measures and used as a means of heightening the effectiveness of the EVP. Where all organizations should be to capture the information needed to heighten the effectiveness of the EVP and demonstrate ROI for further investment. ACTION Realize ROI for a decision based on Analytics PREDICTIVE ANALYTICS Analytics, which use statistical models and forecasts techniques to understand the future. What could happen? DESCRIPTIVE ANALYTICS Analytics, which use data aggregation and data mining techniques to provide insight into the past to understand relationships. What has happened and why? DATA / METRICS Consistent and reliable data extracted from different systems, used for measurement, comparison or to track performance. Meeting expectations? OPINION No search for data or fact. Decisions made based on a gut feeling! 78% of large companies rated HR and talent analytics in the top 3 urgent trends ONLY 7% rated their organizations as having strong HR data analytics capabilities today Source: Dupress, Cooperative 2014 ( KPMG International ), Note: Additional a Swiss insights entity. on All talent rights analytics reserved. available. NDPPS Please contact document author for more information Source: Aon Hewitt, American International Journal of Social Science, Foresee
13 When should you consider refreshing your EVP? Companies should be proactively refreshing their EVP based on organizational, market and work-force changes, in order to ensure it remains competitive and relevant. However, additional efforts to rejuvenate the EVP should be considered as a key tool to help tackle critical issues such as low employee engagement and retention. A reaction to current people issues There are certain key triggers which can identify an organization s need to redesign their EVP to help solve the people issues faced A proactive investment in your people A proactive refresh of the EVP will support the retaining of employee engagement in the following organizational contexts Low employee engagement Retain employee engagement and productivity throughout a transformation Lack of innovation and creativity in the workforce Retain engagement and promote culture unification in a merger or acquisition High employee attrition Develop a talent pipeline despite increasing market competition Difficulty attracting top talent Implement regulatory compliance without de- motivating employees Lack of diversity and social mobility Implementing a change in strategic direction, mission, values or a culture change 34 13
14 The benefits of an effective employee value proposition Across organizations globally, only 13% of all employees are highly engaged (26% are actively disengaged), leading to upwards of $500 billion of productivity lost worldwide every year Organizations that effectively deliver on their EVP can decrease annual employee turnover by just under 70% and increase new hire commitment by nearly 30% Organizations that invest in developing a strong EVP also see An effective EVP can influence employee engagement, resulting in higher productivity, reduced attrition and the ability to attract and retain top talent in the market 24 47% Increase in employees recommending their workplace Up to 50% Reduction in payment of premiums to new hires Up to 63% More success with 1 st choice candidates accepting their offer Sources: Corporate Leadership Council, Gallup 14
15 EVP is just one part of a greater value chain Employee Value Proposition Employee Experience Employee Engagement Attraction Retention Productivity Talent Brand Organizational Culture Reward & Recognition Leadership Learning & Development Career Path Connected communities Technology for the task Seamless interfaces Mobility for flexibility Purpose-driven work Preferences Personas EVP is an employment deal, a balance of the value that s expected to be contributed with the value expected in return. Experience puts the focus on the employee, their journey along the lifecycle, the relationship with the organization, & where it breaks down. The future of work requires that organizations begin to focus on the reasons why workers want to work, versus need to work
16 Thank you
17 Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related entities. kpmg.com/socialmedia The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. NDPPS The KPMG name and logo are registered trademarks or trademarks of KPMG International.
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