n an increasingly competitive
and mobile jobs market,
employers once again are
having to think about how
they can attract and retain the
best staff to ensure they are
able to take advantage of new
opportunities presented by an
improved economic outlook.
While in the past few years
most employees have been
happy just to have a job, and
accommodating of both low
pay rises and the increased
demands placed on them by employers, a more vibrant
jobs market means the pressure is again on employers
to demonstrate just why individuals should want to work
for them.
Earlier this year, Towers Watson’s Engagement
1etwork – a collection of senior HR and benefi ts
professionals – attended a session entitled ‘Employee
Value Proposition: The Hidden Gem’, which outlined
how investing in an EVP can make a real difference to
long-term employee engagement and both recruitment
and retention, ultimately leading to improved fi nancial
performance.
Developing, measuring and communicating an
EVP is essential for those wanting to keep hold of,
attract and engage talent. ³We fi rmly believe that if
you get the EVP right you drive a much more positive
environment at work,” says Richard Veal, Leader of
Rewards, Talent and Communication and Change
Management consulting practice at Towers Watson,
who introduced the event. “When we talk of an EVP,
it means the entire universe of what we offer as an
experience at work.”
This includes the total rewards package offered
to individuals, the jobs, people and culture of the
business, and its wider purpose and aspirations. “We
have to help connect people with the aims and purpose
of the business,” adds Veal. “We need to get better at
communicating the emotional content about why people
should care. Companies focus on this all the time for
their consumers but it’s rarely applied to employees.”
When an EVP is explicit and sincerely communicated
on an emotional level to inspire belief in the proposition,
it can help to manage employee expectations and
increase engagement, which will ultimately drive talent
retention and better business performance.
Our latest research study tells us just how
compelling the case for establishing an EVP is.
The research found that those businesses with a
differentiated EVP are fi ve times more likely to report
having highly engaged employees and twice as likely
to achieve signifi cantly higher fi nancial performance
than their peers. Despite this, however, only 43%
of organisations say their HR and communications
teams have a long-term plan in place committed to the
deployment of an EVP.
Further research conducted by Towers Watson
backs this up, suggesting 32% of businesses have no
formal EVP or total rewards strategy, and only 18%
have fully implemented and communicated an EVP,
segmented for different employee groups and which
differentiates them from their peers. Almost half (49%)
are in between these extremes, having developed an
EVP or total rewards strategy but failed to effectively
communicate it to employees and/or ensured their
talent and reward programmes are aligned with it.TOTAL REWARDS – THE CLEAREST
TOUCH-POINTS OF THE EVP
An effective total rewards strategy is an essential part
of implementing an EVP, bringing together the various
component parts of the entire employee proposition,
including aspects such as base salary, employee
benefi ts, environmental incentives and career rewards,
in a single view, enabling employees to understand and
appreciate the totality of their package.
Many companies currently have not progressed
beyond the tactical stage – as seen in the 32%
referenced above – where they may have a myriad of
different reward programmes but they are not joined
up or even worse are in confl ict. Yet an integrated and
strategic approach will have those programmes aligned
to a formally articulated EVP with specifi c obMectives
attached to each programme, so employees are easily
able to relate to – and value – the various aspects
of total reward, including foundational, performance-
based, career and environmental rewards, and use
these to benchmark against other employers.
Towers Watson recently worked with a global
fi n a n c i a l s e r v i c e s b u s i n e s s t o h e l p t r a n s f o r m i t s t o t a l r e -
wards package from a tactical to a strategic programme.
Like many other organisations, the separate reward
programmes had been developed at different times and
no longer refl ected the priorities of the business or the
behaviours it needed to foster to be competitive in a rap-
idly changing market. Its EVP had developed alongside
this almost by accident.
The business sought to review all its programmes
and rewards strategies to ensure they were aligned
with its wider strategic aims – including segmenting this
for pivotal groups of employees. those who can make
a real difference to the bottom line such as marketing
or customer service roles – and closely aligned the
total rewards package with the EVP. The business is
moving to the next stage, looking to communicate this
effectively to its employees.
An important aspect to consider when
implementing any total rewards strategy is that of
performance management, says Carole Hathaway,
Rewards Practice Leader, EMEA, at Towers Watson.
“Performance management is an important touch-point
around pay, incentives, behaviours and careers and we
need to equip managers to have these conversations,”
she says. “Managers bring the EVP to life through these
conversations”.
Other issues to consider include the balance
between fi [ed and variable pay , the e[tent to which
individuals or teams are recognised, and the degree
of customisation that a total rewards strategy should
allow to refl ect the different employee profi les within the
business based on demographics or job families.COMMUNICATION
Communicating with employees is an important
part of both shaping an EVP and ensuring staff fully
understand what it is and how it relates to them. This
can be applied across the three component parts of
total rewards, jobs, people and culture, and purpose
and values, and needs to be seen to be supported by