As we continue to emerge from the recession, the HR approaches and programs that worked in the past may no longer work in the present and future. This is especially true for a company's employee value proposition.
An employee value proposition represents everything of value a company provides to its employees. Financial rewards are, not surprisingly, a key part of any value proposition. However, there is much more to it than that. Employees also value training and development opportunities, robust and clear career paths and progression, workplace flexibility, and a welcoming and supportive company culture, to name just a few elements of any employee value proposition.
As companies move forward, they need employees with the right skills to help them do so. Unfortunately, those employees are often part of a small population that is in increasing demand. PricewaterhouseCoopers' annual CEO survey found that two-thirds of the 1,201 CEOs it surveyed this year are concerned that talent shortages will constrain their company's growth.
As a result, nearly half of the CEOs surveyed are making some changes and 18% are making significant changes to use more non-financial rewards to motivate staff. These CEOs also recognize that younger workers respond to different types of incentives and benefits than older workers. In other words, younger employees may require a different value proposition than older workers. One-third of the CEOs surveyed plan to make some changes to create different incentives for younger workers and 12% plan to make significant changes in that area. Such changes could also help to differentiate employers as they recruit new staff.
Companies looking to make similar changes to their value propositions need to consider what motivates current and prospective employees. Even as companies differentiate among their employees based on performance, they need to keep in mind that what motivates one employee may not register at all with another. Once again, this is where the company's value proposition comes in. For example, older employees trying to maximize retirement savings might find discretionary retirement contributions to be motivating, while younger employees may be motivated by spot cash rewards and workers with families might value work flexibility and a better work/life balance. A well designed value proposition could accommodate many if not all of these varying needs.
By considering the entire employee value proposition, companies may find that some relatively easy and less expensive changes make a big impact. While compensation remains an integral part of what companies offer to their employees, a weakness in an area employees particularly value can sometimes be as critical to employee retention and satisfaction as a cash incentive. For example, just over 40% of employees surveyed by the Society for Human Resource Management reported that they are satisfied with their career development and advancement opportunities. If this finding reflects reality in your own company, you could be at risk of losing your stars even if your compensation approach is on the money.
To make sure your employee value proposition is aligned with employee needs, ask those employees what they value and what motivates them. The needs of the employees you hope to attract are just as important but a bit more difficult to discern. Still, broad survey data or even asking job candidates about what they value can provide insight into that question.
Once you have this information, it is up to the company to invest in the value proposition where it matters most.