Today’s post, the first in a 3-part series, comes to us from Workforce Institute board member and HR Bartender Sharlyn Lauby.
We’ve all heard the saying that there’s more to compensation than our paychecks, meaning that there are non-monetary items of value that organizations provide to employees. These monetary and non-monetary items combine into what is known as the employee value proposition (EVP).
During the 2018 KronosWorks Conference, John Frehse, senior managing director at Ankura Consulting Group LLC, referred to the EVP in a more practical way. He referred to those monetary and non-monetary items as “currencies”. Not only does the term currency immediately imply value, but it’s possible for organizations to get the point across to employees that currencies involve more than your paycheck.
Here are five different types of currencies that make up the EVP:
- Company Culture: Employees today want to work for organizations that they can be proud of. A mission-driven culture helps organizations hire and keep the best talent. Organizations need to have strong values and a commitment to social responsibility. More importantly, organizations need their actions to support their words.
- Compensation and Benefits: We know that compensation and benefits include salary, benefits, perks, and incentives. What’s important here is that employees are being offered the right salary, benefits, perks, and incentives. Organizations need to offer packages that are externally competitive and internally equitable. Otherwise, employees will be easily swayed by the competition.
- Work Environment: There are two aspects to the work environment. The first is the physical space in terms of open offices, privacy, the availability of technology, etc. The other is the emotional space. Does the workplace stress employees out or focus on wellbeing? Do people collaborate well and recognize each other’s efforts? Employees want to spend their time working in an environment that is emotionally and physically enjoyable (even when the work is hard and demanding).
- Relationships: According to Gallup research, employees who have positive work relationships expend more effort in their jobs. The quality of managers, peer relationships, and internal communications has a direct bearing on this. Organizations should invest in training and development so people at all levels know how to build and sustain positive working relationships.
- Career Development: Employees want to know that the company is going to help them be successful. That means employers must provide training for the jobs employees have today and development for the jobs they want in the future. Employees also want to know that they will get useful performance feedback to help them grow, and that career opportunities will exist in the organization.
What becomes interesting in thinking about these currencies is how employers choose to develop and market their EVP. A few questions that employers might want to regularly ask themselves:
- Do we know what currencies we’re providing to employees? If so, are they being marketed in our employment brand, recruiting process, orientation program, etc.?
- Have we identified the value of these currencies? Which ones do employees value the most (and the least)?
- Is it time for us to give employees more of a say in the currencies they’re paid? Are there currencies we should add / change / delete?
- Finally, do employees know what currencies the company is providing? And if they don’t, what’s the organization doing to tell them?
In today’s competitive recruiting landscape, organizations need to make sure their EVP is competitive and being communicated. Frankly, even in a less competitive job market, it just makes good business sense to promote this information.
Letting employees know the currencies – both monetary and non-monetary – that they will receive helps them decide whether or not to work for an organization. Once hired, providing ongoing communications about the EVP can impact to what degree an employee engages with the organization and whether or not they want to stay.