What is an employee value proposition?

Written by Technically Media CEO Chris Wink, Technical.ly’s  Culture Builder newsletter features tips on growing powerful teams and dynamic workplaces. Below is the latest edition we published. Sign up to get the next one.

You have an employee value proposition whether you know it or not.

An employee value proposition is a set of offerings an organization makes to be an attractive place to work. Each of us who decides to take a job is making a decision based on EVP, a familiar term to recruiters, HR pros and company culture builders. It’s a term closely linked to employer brand marketing, the process of an employer trying to tell that story to attract and retain employees who will best succeed at the organization.

“An employer brand is the external expression of an employee value proposition,” said Marc Coleman, the CEO and founder of The Tactile Group, a software development firm with a speciality in the public sector.

Coleman has thought a lot about his company’s EVP. Over nearly 20 years, he’s relied on a sharply defined offering to compete in a competitive tech hiring environment as a small software company. As he puts it: “It’s the internal promise we make to our team about compensating for the value they bring.”

What defines a value proposition?

The concept of a business value proposition was first defined by a McKinsey working paper written by ​​Michael J. Lanning and Edward G. Michaels in 1988. “A business is a value delivery system,” they wrote, and they mapped out that circle of value creation. The phrase characterizes a familiar idea: Each transaction or relationship involves an embedded promise of value. Business orthodoxy and startup culture quickly became committed to the idea.

Employer brand marketing developed during the economic boom times of the 1990s. Out of that recruiting strategy, HR pros adapted the existing business concept into EVP. The concept was simple: What is it about your organization that attracts and retains great employees? To be most effective, employer brand marketing should amplify that set of offerings. Customer value propositions should be specific with respect to tangible outcomes. No different for EVPs; One of the reasons for developing value propositions is to know where leaders should focus their efforts.

All along, concepts like an organization’s mission, vision and values were related, but these strictly about giving focus to the work. Similar themes might overlap but an EVP is strictly internal to the organization and its staff.

How to determine your employee value proposition

If an employee value proposition is a partnership between employer and employee, then no leader can create on their own. Employers can only determine their own EVP by speaking to employees.

“Listen to your team,” Coleman said.

To do that, survey and interview your employees. An outside consultant can help offer distance but it may not be necessary. The questions and details vary but at its center you want to answer one simple question: Why do you choose to work here over some place else?

Compensation always plays a part but interestingly it is rarely the only factor. More Americans prioritize workplace flexibility over higher salaries, according to recent surveying. Dozens of other factors contribute to an EVP. Here are a few:

• Is this a smaller org that offers more influence or a larger one with more traditional growth opportunities?
• Is this an early-stage startup or an established firm?
• Are there clear processes or do I get to create my own?
• Are we working the hardest we can or prioritizing employee well-being?
• Does this job take place in an office, remotely or in a hybrid environment?
• Am I interested in this company’s mission statement?

Talented professionals prefer any number of these assortments. The point is to establish your EVP so you know who will be happiest and most engaged in your organization.

Examples of employee value proposition statements

Most EVPs start off unspoken. An employer has a general set of offerings (location, team, benefits, brand prestige, etc.) and those specific to each job (salary, work responsibilities, manager, etc.), and each current and prospective employee decides if it’s compelling enough to trade their time for money.

As hiring demands grow, leaders work to better understand their existing EVP, refine and improve it. Here are a few examples of crisply written EVP:

• “We’ve just started on this journey, and every person has a unique and powerful impact on where we go from here.” (Canva)
  Hubspot commits “to help you be the best ‘you’ that you can be.” (Hubspot)
  “Shopify facilitates their employees’ growth, but they also challenge people to forge their future path.” (Shopify)

Much of Coleman’s Tactile Group EVP lives in its policies and so is presently not codified as its own written-down stance. Yet between their empathetic culture and mission inform their tagline that Coleman says conveys their promise: “We are designed to give a damn.”

What do you do with an employee value proposition?

Coleman’s Tactile Group has evolved since its founding in 2004. Once a graphic design agency, the company now builds software for government agencies and others.

But Coleman says his core EVP hasn’t changed: “It always started with empathy.”

“We operationalize our empathetic culture within our employee manual,” Coleman said. An equitable family leave offering and flexible PTO are examples, he argues. For most of 20 years, he has grown a company with employees who feel they’re getting a good deal, working on projects they enjoy with people they like in a work environment that considers their full selves, Coleman said. A pandemic has made that especially important — certainly including pandemic parents.

Like any other employer, though, he can’t offer everything. Like other software contracting firms powered by their own revenue, Coleman has felt wage inflation pressure, though many of his nearly 30 employees have a good handle on what makes them happy. He still tries to meet individually with all his employees enough to understand their perspective on EVP.

Along the way, his company uses their understanding of EVP to underpin their employer brand marketing and recruiting strategies. Those promises are a check against their growth plans and employee offerings. Like any employer, he has made mistakes, and will make others.

It’s hard to mask a rotten EVP for too long. Employees have a choice. As Coleman said, an EVP is always “executed in your actions, documented in the mission.”