The Recession may be (essentially) over; however, some of its effects still linger—including the impact cutbacks and layoffs have had on employee engagement
Salary freezes, reduced hiring and other moves haven’t been uncommon in recent years. Forty-four percent of companies took similar cost-cutting measures, according to the Society for Human Resource Management.
Overall reductions may have been necessary to sustain operations, but they often come at a price. Decreased employee engagement can have a potentially negative impact on the bottom line—which, in today’s competitive marketplace, can be a dangerous proposition.
Recent research from Gallup, showcased in this graphic from business service provider ADP, found that up to 67 percent of employees may be under-engaged, costing the average organization more than $2,200 a year.
One potential solution: Increase your employee value proposition — a principal the Institute for Public Relations defines as “what employee can expect from the company and what the company expects from employees.”
Although a recent report from global professional services company Towers Watson found that EVP wasn’t always a priority—just 42 percent of companies said they trained managers to convey the organization’s EVP—a clearly defined strategy appeared to be the key to success. Organizations that had a strong, detailed employee value plan were more likely to effectively communicate their reward program’s worth to staff members.
An emphasis on stressing employee-centric workplace initiatives can pay off. Companies that were identified as highly effective communicators saw nearly half—47 percent — higher total shareholder returns in the past five years, compared to organizations that communicated less effectively, according to the 2010 report.
How do you create an effective employee value proposition?
In an October 2014 article, Employee Benefits magazine suggested a successful EVP should focus on workplace culture, work-life balance and career enrichment—not just financial benefits. To find out what specific amenities your staff is looking for, Employee Benefits advises conducting surveys and analyzing employee responses, which can help you gauge different generations’ needs.
(That’s particularly important to retain Millennials, who switch jobs approximately every two years—compared to the average seven Baby Boomers spend at a company, according to a recent study conducted by PayScale and Millennial Branding.)
If you’re working with specific financial constraints, you can still create a successful employee value proposition plan. A winning employee value proposition strategy doesn’t need to double a company’s budget. In fact, at some organizations, it doesn’t need to cost a thing.
Take, for example, the Federal Reserve Bank of Boston, which proudly proclaims on its website that its employee value proposition involves making a difference. The Boston Fed says its “employees take great pride in working for an organization whose mission is to promote sound economic growth and financial stability in the New England area and the United States”—which the Fed does through outreach programs, research and financial services.
Likewise, Tulane University’s EVP involves nonfinancial bonuses, including the tradition and sense of community a college academic environment can provide. Similarly, Singapore’s National Environment Agency stresses solid—yet not necessarily flashy—EVP aspects, including helping employees realize their potential.
For additional tips on creating an employee value proposition program that your team will truly appreciate, check out this National Business Research Institute graphic and Workforce magazine’s “Why Companies Are Embracing the Employee Value Proposition” article.