Friday, October 24, 2008

In search of a 'sharp' employee value proposition

These days, many companies are quite vocal about their 'employee value proposition' - the 'total employee deal' that they offer. Some of them even have formal employee value proposition statements. Yes, this is a positive development. If organizations are serious about treating their employees as anything more than 'mindless resources' and if they acknowledge that the employees exercise at least some amount of choice (in matters like joining the company, staying on, putting in discretionary effort at work etc.) it make sense to think about (and more importantly, to do something about!) creating a value proposition (or a 'total employee deal') that appeals to the the current and prospective employees.

However, we often come across two types of problems with 'creating a compelling employee value proposition' efforts. The first is that the value proposition exists mainly in word and not in deed. Hence this becomes more of a communication (or 'public relations') exercise. Now this might work for sometime (in terms of increasing employee morale and in terms of attracting new hires) - as employees often believe the employers (or at least give them 'benefit of doubt'). But after some time, when the employees don't see much action (or the alleged 'employee value' in the employee value proposition) it leads to more frustration/ disillusionment/ mistrust. Thus the employees might develop some sort of aversion (or at least reduced sensitivity) to employee value proposition statements/initiatives.

The second problem is that the 'employee value proposition' statements of many of the organizations look very similar. Now if many organizations start speaking about very similar 'employee value propositions' it leads to a lot of clutter and hence the the employees, especially the prospective employees, find it difficult to judge the relative merits/demerits of the employee value propositions offered by various organizations. This can also add to the 'reduced sensitivity' to employee value proposition statements that we were discussing earlier.

In many cases, one of the key reasons for the above two problems is the attempt on part of the organization to do too many things - trying to improve all aspects/dimensions of the employee deal - that too for all the employees. While this ('trying to be everything to everybody' kind of approach) leads to 'well-rounded employee value proposition statements' the implementation/delivery of the employee value proposition becomes too difficult/impossible. When many organizations follow this approach this also results in employee value proposition statements that look very similar (and too good to be true!).

The above discussion implies that, to be effective, organizations need to find a way to cut through this clutter and reduced employee sensitivity - while ensuring that the employee value propositions are implementable. This where 'sharp' employee value propositions come in.

The basic requirement here is to create a very clear employee value proposition that is different from (and perceived to be different from) what other companies are offering. Usually this implies focusing narrowly – concentrating only on one or two levers/dimensions of the ‘total employee deal’. So the idea is to choose one (or two) aspects of the employee value proposition (based on the business and HR context/strategy/plan) and to channelize most of the resources to enhance ‘employee deal’ in those dimensions. For example, the value proposition can be that
  • ‘we are the best paymasters in the industry’ or
  • ‘we provide the fastest career growth in the industry/we offer positions at a higher responsibility level as compared to what the other companies offer for a given employee profile’ or
  • ‘we provide better/more stable long-term career and greater work-life balance’ or
  • ‘we provide greater opportunities for job rotation and the opportunities to work in multiple geographies’ or
  • ‘we provide the opportunity to work with the most advanced technology/tools and the chance to work with people who are considered to be the thought leaders in the field’ or
  • ‘we provide mass-career customization/greater flexibility in designing your own career’ etc.

Now, all of the above options listed above might not be feasible in the context of a particular company. However, some of the options might be very much feasible. Of course, having/developing competent managers and building a good work culture are very important – especially from a retention point of view. But since every company talks about these it becomes difficult to make these differentiating factors – when we are talking about attracting a new candidate/when a candidate has limited primary data points regarding what particular companies are really offering.

Once the organization has chosen the lever(s) to press and has enhanced the employee value proposition on that dimension (by modifying the policies/processes/management style etc.), the next step is to publicize it – both internally and externally. This will also ensure that the organization attracts the 'correct' profile of candidates (as the ‘focused’ employee value proposition will appeal to only a particular set of candidates – candidates who have a set of workplace preferences that is similar to what the organization is highlighting). While this might reduce the size of the ‘candidate pool’, it will help the organization greatly in reducing attrition – as the organization is attracting only those people who are motivated by those aspects of employee value proposition that the organization is providing better than what the other companies are doing.

It is also possible to further customize ('sharpen'!!!) the employee value proposition to make it more attractive to particular employee segments (e.g. high performance – high potential employees, employees in certain jobs, employees with certain skills etc). This makes a lot of sense if the organization has very limited resources and if it doesn't have equal need to retain all segments of the employees.

Any comments/observations/suggestions?


Anish said...

IMHO if a firm is spending time on sharpening an EVP statement, its spending effort in the wrong direction. this time should be better spent instead in ensuring that the EVP is actually working on ground in the orgn.
For ex, if an org in the Hi tech industry is known as a fertile ground for the cutting edge tech projects it works on, it doesnt overtly need to advertise that in a statement of purpose. SAS for ex doesnt need to articulate its EVP. its well known anyways.

Prasad Kurian said...

Thanks for the comment.

My point is that to be able to make EVP work (i.e. to deliver it within the organizational constraints), often organizations have to make the EVP sharp/focused. What we are more bothered about here is the substance of the EVP and its effective delivery – not the wording of the EVP per se (though the wording is important from a communication point of view – the organization should deliver value and also be perceived to be delivering value).

Of course, if you are in an organization whose EVP is well known & well understood/accepted, then you don't have to publicize it further. However, many organizations might not be in such an advantageous position. Please note that most of the attrition in the high-tech industry tends to be intra-industry attrition. So while the industry level EVP is well understood/accepted (and hence there is not much risk of losing people to other industries), particular firms in the (high-tech) industry can lose a lot of people to other firms within the (high-tech) industry. So from the point of view of a particular organization in the high-tech industry, there is still the need to have/deliver a differentiated and focused employee value proposition.