Let’s start with a few unsettling facts that today’s business leaders are dealing with – and then look at a solution.
In January, a NAB survey revealed around four in 10 Australian businesses are suffering “very significant” impacts from labour shortages, and there is little confidence the problem will be resolved within the year.
Korn Ferry released a study recently that predicts a global talent shortage of over 85.2 million workers by the year 2030. To put that into perspective, it’s almost equivalent to the entire population of Germany.
And finally, a new survey from learning software firm TalentLMS and Workable, revealed that 72% of 1,200 U.S. tech workers polled said they’re considering quitting their jobs in the next 12 months. (Notably, none of the key reasons were salary.)
So, if the ability of ‘The Great Resignation’ and talent shortages to blindside businesses isn’t in sharp focus, it should be.
But – and here comes the good news – there is a way that business leaders can manage talent and culture that should be taking centre stage for organisations everywhere – the employee value proposition (EVP).
In fact, according to research from Gartner, organisations that effectively deliver on their EVP can decrease annual employee turnover by just under 70% and increase new hire commitment by almost 30%.
The EVP will increasingly play a key role in a person’s decision to stay or move and having a relevant and truly compelling EVP is now more important than ever before.
Historically, organisations have asked current and prospective employees to adopt the company’s values even if they don’t align with their own. This has been flipped on its head as employees increasingly opt for those businesses that have a clear and genuine corporate purpose and values compatible with their own.
Their work must matter, or count for something, and it’s a need that’s not purely tied to individual purpose. There is a strong desire to be challenged intellectually, undertake exciting work, but above all be part of an organisation that has a visionary perspective of its goals and how it’s going to achieve them.
High-profile, successful companies around the world have been leading the charge when it comes to developing world-leading EVPs to attract and retain talent.
One of the best examples is Netflix, who wrote a breakthrough Culture Deck in 2009 that is still spoken about today when it comes to culture and EVP.
Today, employees can choose how they are remunerated (any combination of cash and options), the company’s policy on vacation is ‘take vacation’, and the parental leave policy is ‘take care of your baby and yourself’. (New parents generally take 4-8 months.)
Netflix states: “Our core philosophy is people over process. More specifically, we have great people working together as a dream team. With this approach, we are a more flexible, fun, stimulating, creative, collaborative and successful organization.”
The culture page on its website is a great read, inspiring, thought-provoking and authentic. For more detail, head here.
Not surprisingly, there are significant economic, cultural and innovation benefits to a compelling EVP.
Retention alone has a major impact on company profits, intelligence, innovation, and culture. A strong EVP will also make you attractive to graduates and other prospective employees seeking out a workplace that meets their needs and desires.
According to Gartner, organisations can reduce the compensation premium by 50% and reach 50% deeper into the labour market when candidates view an EVP as attractive.
Additionally, a well-considered EVP will help lead to increased pride and greater commitment and growth within teams. Greater cross-team engagement creates more chances for innovation – and profit.
How does your organisation’s EVP stack up?
In our next blog, we’ll share three steps to develop a compelling EVP.
For over 16 years Brand Council has provided brand purpose consultancy to a wide range of clients, from not-for-profits through to multi-national brands. Explore our work in greater detail, see how we can help, and get in touch with our brand strategy specialists and discuss how to better engage with employees and develop a compelling EVP.