Why is your talent leaving and joining your competitors?

Now there’s a question. And why should you pay attention to the headline? Because a paradigm shift is happening.
Employees are becoming increasingly selective about who they work for and companies are having to place more emphasis on the quality of their employee experience. The power, to some extent, has shifted. An organisation’s success or failure, in terms of recruitment and retention, now hinges not only on getting the Employee Value Proposition right, but also, crucially, what’s in it: of particular importance is the Environmental, Social and Corporate Governance strategy.

This shift in recruitment and retention is happening for two main reasons:

  1. Generational values are changing, which means people value and want different things to the traditional models.
  2. Shifting social ethics and priorities are changing what candidates are looking for in potential employers.

One outcome of the pandemic that is presenting a significant challenge for the future of work is that the workforce is suddenly far more mobile. With remote working now a viable option, jobs are opening up to a far wider resource pool than before; we no longer have to measure the commute when considering a role, because the world really is our oyster. This means that potential candidates can be more selective about the company they choose to work for. New operating models are emerging and unless companies get savvy to this, they risk potentially losing talent, because their Employee Value Proposition (EVP) is not compelling enough.

Historically, EVPs have been mainly focused on the financial benefits a company offers to their workforce. If I think back to 1997, when I joined banking and the financial services sector, the EVP was about ‘Eleven Things That Made Your Life Financially Better’: the mortgage subsidy, the bonus package, the annual salary rise, the promotion promise, the car allowance, the pension, and so on … all very ‘material’ benefits. This was a sign of the times within financial services, but it was also a generational thing: the systems that we – Generation X – grew up with, bled into the infrastructure of organisations and fuelled how organisations believed they needed to present themselves.

But that was 24 years ago … a quarter of a century later and things have dramatically shifted. What we tend to see now, with younger generations coming through into the workforce, is that financial reward is generally much further down the list of priorities. For the so called Millennials and Generation Z (those born since 1981), the focus appears to be more on having a sense of purpose; seeing health and wellbeing integrated into organisational culture; wanting diverse, inclusive and flexible workspaces, and seeing the ethical values of the organisation aligned with their own.

Companies can no longer rely on what they’ve historically had in place: it’s no longer enough to have a list of rewards pinned to the board. Companies are recognising that the different generations within their organisation have different needs and expectations, and that these are driven at an emotional level, therefore companies are now taking a more holistic approach to what their Employee Value Proposition contains. This EVP is a reflection of what you experience once you are inside the organisation itself, so everything is considered, from the brand profile and purpose, through to the culture of the organisation and critically, the company’s corporate social responsibility.

Joining a company is now seen as more than a means to a financial end; it’s a lifestyle choice and an investment of the ‘whole self’. The younger working population are looking for meaning and to connect at an emotional level with an organisation’s values, ethics and beliefs, therefore a company’s Environmental, Social and Corporate Governance (ESG) agenda needs to be interwoven with the EVP. The two areas are inseparable now because the new generation, in particular, are far more switched on to this. They are actively looking for the non-financial aspects of a company’s EVP, placing much more importance on the company stance on social and ethical responsibility, the green agenda, equality, diversity and inclusion. Consequently, the voices of these younger generations are also influencing the Baby Boomers and Generation X who can see changes in working patterns happening and are re-thinking their own values, placing health, family and quality of life higher than their bank balance.

Authenticity is essential

The big challenge for organisations now is ensuring they are connecting the dots and living the values, so that the experience from within the company matches the promise from without. It has been said many times before: Authenticity improves business performance.  If your brand does not value truth and transparency highly enough you risk losing certain generations of your current and potential workforce to competitors whose EVP, whose purpose, and whose ESG agenda, are stronger and more connected at an emotional level with the individual employee.

Businesses must now publicly show that they stand for something important and start building a company culture around ethical values. Then, reflect this back down, practically, into everything that you do. You’ve got to have a really flashy and attractive EVP. It’s going to need to bring in the whole ESG agenda and the green agenda within that and show that you recognise the different needs, ethics and values of the range of generations of workforce that might be within your organisation.

Time to redesign your EVP to encompass your ESG

Companies have got to get on the front foot around ESG if they want to create a really enticing EVP: From an ecological perspective, environmental values need to be followed through with active recycling programmes, for example, or visible reductions in emissions or considerate building programmes. The culture of the organisation needs to positively celebrate equality, diversity and inclusion with evidence of that being visible in a diverse workforce, where open dialogues around mental health and wellbeing are engendered. The political and economic ethics and accountability of an organisation should be transparent; the wealth and distribution fair, equitable and right, and employees should be empowered to share opinions. When it comes to finance, of course monetary gain is still important, but it is starting to be measured differently: stability and security are valued highly, along with trusted flexibility, enhanced lifestyles and opportunities for green investing.

Understand how your employees feel at an emotional level

This is a complex suite of priorities that requires a holistic approach. It requires companies to get better at understanding, on an emotional level, how their employees feel about all these different aspects of the Employee Value Proposition. It’s only when leaders understand at an emotional level what employees want – for their financial wellness, their mental wellness, their ethical wellness – that they can begin to re-imagine an EVP, and everything that permeates into that, to create a holistic employee experience.

If companies don’t get on the front foot of understanding people at an emotional level, then they risk missing out on the emotive factors that need to be considered when designing a powerful EVP that seamlessly loops into their ESG agenda. Get this wrong and it will affect not only potential candidate pull-through, but also the company’s ability to hold onto the right people in their existing workforce.

Is your EVP still fit for purpose?

by Tim Evans, Director and Co-Founder of Truthsayers