Employee Value Proposition

What an employee value proposition is

An employee value proposition (عرض القيمة للموظف), often shortened to EVP, is a statement of what an organisation offers its employees in return for what it asks of them. It is used both to attract the people the organisation wants and to keep the ones it already has.

An employee value proposition is a promise, not a description. Its one test is therefore whether it can be broken: a proposition of which nobody could ever say that it was not delivered is not a proposition at all, only a phrase on a website.

How an employee value proposition differs from what is usually written

Most of what is published under the name consists of sentences nobody could disagree with and nobody could accuse the organisation of failing to keep: “a motivating work environment”, “opportunities for growth”, “a collaborative team”. If these sentences were moved to a competing organisation, they would suit it exactly as they stand, and that alone is enough to show that they describe nothing.

A sentence becomes a proposition when it can be broken. Compare “we care about developing our people” with “every employee has five days of training a year, and anyone who has not had them is reported by name to their manager in the last quarter”. The second can be broken, so it is a promise. It has a cost that can be calculated, and the employee can claim it.

The practical test is to put every line of the proposition to two questions. Could a competitor say the opposite? Could an employee show that it was not delivered to them? Any line that does not get a yes to both is struck out.

Every line of an employee value proposition is a commitment with a cost

A promise announced without funding is broken in the first year. Take the five training days above in an organisation of 200 employees: they come to 1,000 training days a year, counting both the employees’ time and the cost of the training itself.

If that cost is not budgeted, within months the promise turns into “subject to budget availability”, a phrase that cancels the promise and keeps its bad effect. An organisation that cannot commit to five days should commit to two and keep to them, because two days delivered are more useful than five announced and never given.

For that reason each line is put to a third question, after the two above, before it is announced: what does it cost a year, and who owns the budget for it? A line with no answer to that question is not written.

The five areas an employee value proposition is built on

• The work itself: its nature, and the autonomy and impact it carries.
• Pay and the benefits that come with it, the ground covered by total rewards.
• Development and movement available inside the organisation.
• People and management: who the employee works with, and how they are managed.
• Working conditions: where and when the work is done, and how much flexibility it allows.

In each area the proposition has to state what is provided, not what is intended. “Flexibility” tells the reader nothing, while “you choose which of three days in the week you come into the office” can be understood, claimed and costed. The rule is the same across all five areas: the further a line moves from the general to the specific, the less appealing it is to read and the more weight it carries in the decision.

No organisation fully covers all five, and none is expected to. An experienced candidate will not believe an employer that claims to excel in every one of them, because each has a price that is paid out of the others. A useful proposition names two or three areas where the organisation excels, and either says nothing about the rest or describes them as they are.

Nothing in the definition settles which of the five areas should be put first. That differs from one group of employees to another, and with the employers the organisation is compared against.

Checking an employee value proposition against the organisation’s own data

Checking the proposition does not need a new study, since most of what is needed is already in the organisation’s records. Take a year in which 50 job offers were made and 34 were accepted. The acceptance rate is 68%, and 16 candidates declined.

Then look at the reasons for declining. Suppose 11 of the 16 gave pay as the reason, which is 68.75% of those who declined, while the published proposition lists pay among the areas where the organisation excels. In that case the data contradicts the proposition, and one of two things has to happen, with no third option: pay is adjusted, or pay is withdrawn from the proposition and something else is put forward in its place.

The figures in this example, like those in the other examples, are assumed in order to show the calculation. They are not a benchmark and are not taken from any source.

The other side of the record comes from the exit interview: what do the people leaving say? If the reason they leave is the very thing the proposition promises, the proposition is stated and not delivered. Of the cases in which a proposition fails, this is the most dangerous, because it attracts the people who want that particular thing and then disappoints them, so that recruitment becomes a cause of departures.

One employee value proposition does not fit an organisation with several groups of staff

What the proposition offers an engineer at head office is not what it offers a worker in a warehouse or an employee in a distant branch. A sentence that fits all three at once describes none of them.

The point becomes clearer when people compare against different things. An employee at head office may be choosing between two organisations in the same city, while an employee in a distant branch is weighing staying near family against moving away. These are different decisions, and no single thing tips both of them. When an organisation’s proposition offers only what matters to its staff at head office, it has no effect whatever on those in the branch.

So the proposition is built for specific groups. The group is identified, the organisation learns what its candidates compare it with when they make their decision, and then something specific to that group is written. Groups that are hard to hire for have the stronger claim on this effort, because the proposition has its effect where the candidate has a real choice between employers.

An employee value proposition is judged against rivals the organisation does not choose

A candidate does not read the proposition on its own but alongside the other options in front of them. A proposition that looks good in itself may offer nothing, because every employer the organisation competes with offers the same. How a candidate forms an impression of an employer across the whole hiring process is the subject of candidate experience.

That is why each line is put to a fourth question: is it a differentiator or a condition of entry? What everyone offers attracts nobody. It matters only because leaving it out gets the organisation ruled out. Build a whole proposition on conditions of entry, and the organisation has announced in pleasant language that it is like everyone else.

The employers it is compared against are not always in the same sector. An engineer may weigh a factory against a software company, and an accountant may weigh a trading business against an accounting firm. Defining competitors by sector alone means testing the proposition against employers that are not actually competing with it.

Where an employee value proposition sits beside total rewards, culture and the job offer

• Total rewards is an inventory of the pay and benefits actually given. The employee value proposition states what is offered and why. The inventory is a list referred to when doing the sums, whereas the proposition is a promise that is chosen and put forward, and it may rest on things other than money altogether.
• Organisational culture is what exists in the organisation whether or not anyone writes it down, and the proposition is what the organisation chooses to promise. A proposition written against the culture that actually exists announces a promise the employees know to be untrue before any candidate finds out.
• A job offer is a document for one named person, setting out their pay, their title and their start date, while the proposition is a general statement addressed to a whole group. The proposition is a moral commitment, and it is judged by what the organisation has actually done.

What undermines an employee value proposition

• Writing it in one part of the organisation and delivering it in another. A proposition drafted by marketing without the management that will have to keep it produces promises that are well phrased and impossible to deliver.
• Building it on what the organisation hopes to offer rather than on what it offers today. The new employee discovers the gap between the two in the first weeks, during onboarding in particular, which is the worst moment to discover it.
• Announcing it and never reviewing it. A proposition written years ago, in an organisation whose circumstances have since changed, becomes a description of an organisation that no longer exists.
• Measuring it by the number of applicants. A rise in applications may be the effect of the advertising rather than of the proposition. The more useful figures are the offer acceptance rate and the reasons for declining, as described above.
• Merging distant groups into one line for the sake of brevity. The result is a statement that is correct on its face and in which nobody recognises themselves. As set out earlier, someone choosing between two cities does not decide on the same grounds as someone choosing between two streets.
• Judging its effect by survey answers alone. An opinion given when asked is not a decision made when an alternative exists, and the proposition is there for the second.
• Leaving out what is asked in return. The proposition is an exchange. An organisation that states what it gives and says nothing about what it asks attracts people whose expectations differ from what the work will demand of them. The demands of the job are what a realistic job preview sets out, before the candidate accepts the offer.

Before an employee value proposition is announced

Write no more than three lines for each group, and put every line to four questions. Could a competitor say the opposite? Could an employee show that it was not delivered to them? What does it cost a year, and who owns its budget? Is it a differentiator or a condition of entry? What survives all four is announced, and what fails any one of them is dropped, however well it reads.

A year later, measure one thing: have the reasons candidates give for declining, and the reasons employees give for leaving, changed from what they were? Those two figures say what a survey of employees’ views on the proposition does not, because they measure decisions actually taken rather than opinions given when asked. How attached employees become to their work after they join is a separate subject, that of employee engagement.

In the sources we reviewed we found no published measurement, for the Saudi market, of how much an employee value proposition affects attraction or retention. The absence of a measurement does not mean the effect is absent.

Related terms

• Realistic Job Preview
• Candidate Experience
• Exit Interview
• Culture Add
• Cost per Hire