I wanted to share some thinking from a recent article in our SCM Journal on a topic that I know sits close to the heart of many HR executives, as well as Internal Communicators. The Employee Value Proposition (EVP). If EVP feels too much like yet another piece of management jargon, I’m with you. But an alternative, clearer and simpler way to think about it is “the deal” between the employer and its people. Many employees have already experienced a change in their deal over the last 12–18 months. To cite Towers Watson’s 2010 Global Workforce Study, 43 percent of employees in their recent comms effectiveness survey say they have experienced reduction or elimination of bonuses, 38 percent in pay rises and 33 percent in healthcare benefits. I would suspect those numbers are on the up!

During the 1980s and 1990s, leading management thinker Jim Shaffer developed significant intellectual capital around the concept of EVP. In an interview for Melcrum’s latest research report The Future for Internal Communication, Shaffer explains more: “It’s a statement of intent, which can be both implicit and explicit. Most organizations don’t have a written, formalized deal and some say it shouldn’t be written down. But all organizations have a deal of some kind, in the same way they all have a culture. It may not be the deal we want, or the culture we want, but we do have a partnership agreement.”

Of course, the sense of urgency around EVP will be stronger in those companies that are reeling from the aftershocks of the global financial crisis. For those companies who operate in industries that were less affected, change may not have occurred in such a drastic fashion and employees may be feeling quite secure in their positions. If this is the case for your organization, not only will you be feeling quite lucky, but you may also feel that the deal is pretty good and examining your EVP is simply unnecessary.

But in the post-recessionary environment, it’s those companies who do more than the necessary that will stand out above the rest in terms of retaining and attracting talent. Furthermore, if there’s one thing we’ve all learned from the global financial crisis, it’s that you can’t get complacent.

It is true that even among the most severely hit companies, financial services organizations for example, not all are formally looking at their EVP. What these companies need to realize is that, as laid bare by the stats earlier, the deal has already changed; it’s just that nobody has made it official. So, if the right functions within the organization, HR, communication, learning and development and senior leaders do not define the business’s EVP soon, then it’s likely that someone else will. And they’ll probably do a pretty bad job of it.

So what does EVP look like in reality? It’s fair to say that companies need to ask themselves some critical questions, including: “What kind of job security can we truly offer our employees?” Let’s admit, even the least recession-hit employers are thinking twice about the promises they make and employees are careful about what to expect when it comes to this sensitive area of employment. Most companies are either unsure about how to tell employees this, and employees don’t want to ask. Can’t you just see the tension building and productivity plummeting in this scenario?

A good example of how the Employee Value Proposition can help here is by opening up the dialogue. Companies can use the EVP to say to employees: “We acknowledge that we can’t promise you a job for life in this organization. And we also understand that this means you may not stay with us forever. However for the time that you are employed here, we will provide you with high quality skills and training, so that if and when we part ways, you are secure in that you will be well equipped to find employment of equal measure elsewhere. In return, we expect you to think about the business in the same way. You’re not only working for the business’ present success but its future success also.”

So the EVP is an opportunity to acknowledge, communicate and formalize change. Most often, when change is taking place, what upsets the workforce is not the change itself, but the fact that they’re dismissed along the way, or there’s a lack of clarity about what the change means for them.  Our research would definitely suggest that the EVP is certainly not only about what’s in it for the employee. It’s not just about benefits and rewards. It’s very much a two-way street and goes one step further in reminding us that the best EVPs not only outline the value proposition of the employer-employee relationship, but inextricably link to business strategy and objectives. It is important, especially in the current climate, and we should be clear what the EVP looks like in action for both employee and employer.

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