Many business programs focus on developing a client value proposition. Fair enough. But there’ll be no value to deliver if you first don’t develop an employee value proposition (EVP). How else can a firm grow under a leveraged model?
Before we start listing the elements of an effective EVP, it’s important to understand what this concept means, why it’s increasingly important for business success and how you can make it authentic.
WHY SHOULD I WORK FOR YOU?
There’s a war for talent out there. For example, paraplanners who might ordinarily be paid about $60,000-90,000 a year have short-term opportunities in remediation work, thanks to the Hayne royal commission, in the range of $120,000-$140,000.
Finding people with the required combination of technical skills, communication skills, passion, focus, innovation and dedication is never easy, but in an increasingly competitive marketplace undergoing significant disruption, it’s a real challenge.
An EVP is a fancy name for a firm articulating a set of answers to the top-of-mind question for every job candidate: Why should I work for you? Every firm has an EVP. The problem is that few ever explicitly define it and even fewer see it as part of their strategic position in the marketplace.
Developing an effective and coherent EVP starts with you being able to answer some key questions:
- What values drive your organisation?
- How do you spot talent and how is it rewarded?
- What behaviours do you reward?
- How do you rank individuals vs the team?
- Technical vs financial excellence?
- How does your firm culture shape the reward structure and vice-versa?
- How much clarity of purpose and accountability is there in management jobs?
- What is the typical employee journey in your firm?
It’s vital not to treat the EVP process as a box-ticking exercise. This is because industry surveys show a strong belief among many financial services and other professionals that there is a large gap between companies’ expressed commitment to the employee experience and the day-to-day reality.
So, it must not be just words. Your culture and employee experience must reflect the promise of your documented EVP.
UNWRITTEN EXPECTATIONS
At a superficial level, the process of hiring and retaining good employees is not particularly complex. Your business needs talent. The candidate needs a job or wants to advance. In time, both parties agree to terms – title, salary, hours, work location – and the deal is done.
But there are so many unwritten and undocumented expectations underlying all of this. For example, it is not just about the sign-on package. Typically, employees expect that the job will be true to its description, that they will be given appropriate training, that they will be treated respectfully and that they will be offered opportunities to develop.
Failure to attend to any of this can lead to the sounds of unmet expectations:
- “Oh no, not another one of these assignments.”
- “I want/need more training.”
- “My job is boring/tedious/stressful.”
- “My appraisal rating wasn’t fair.”
- “I should have received that promotion.”
- “How long am I going to be stuck in this job?”
- “I’m bidding on another job posting.”
Inevitably, what creates this gap between expectation and reality is poor communication. The business leaders focus on the business, leaving employees to focus on themselves. In short, no one focuses on the relationship between the two.
All of this leads to staff turnover – be it regrettable or non-regrettable losses. Either way, it costs money in lost clients, downtime, recruiting and hiring, onboarding and upskilling. Turnover can cost on the order of 12 to 18 months’ salary.
THE FOUR Ps
This is a familiar scenario, isn’t it? And it’s one that can be avoided by paying attention to the four ‘Ps’ of developing an effective EVP:
1 Preparation
2 Pay
3 Perks
4 Productivity
1. Preparation
This may be the most important step because it is about reflecting on and articulating the answer to the initial question, which is: Why should this person join this journey with you?
This process involves principals of the firm giving real thought to the issues of leadership, vision, transparency, communication, education and mentoring. This requires a change of mindset in relation to employees so that firms:
- STOP managing and start supporting
- STOP focusing on hiring the best talent and start creating the best talent
- STOP doing things via trial and error and start focusing on ROI
- STOP focusing on profit and start focusing on growth
- STOP focusing on the problems and start focusing on the goal
2. Pay
“Recognition is the strongest driver of great work.” GPTW (Great Places to Work)
“Money is clearly not the primary motivator. Working conditions, inter-personal relationships, and culture are the primary motivators. Reasonable pay is important, but not high pay.” Workplace Index (National Study of US Employees)
3. Perks
Employees in the financial advice industry just won’t be able to live with themselves if you don’t provide them what you’re telling your clients they need to have:
- health insurance
- superannuation and a retirement savings program
- bereavement time
- family leave
- provided lunch/fruit
- volunteer time off
- continuing education
- professional education
- non-work-related education
- group discounts
- sabbatical time off
- flex time
4. Productivity
Traditional command-and-control management may have worked in the era when much of the workforce was employed in factories making widgets, but in a knowledge-based economy it will never succeed.
This means firms must prepare themselves and their employees to succeed by ignoring traditional management. It means basing incentive pay on the growth of the firm and introducing flexible lifestyle benefits. It also means ensuring employees are given the best tools to excel at their jobs.
PUTTING IT ALL TOGETHER
This four ‘Ps’ approach to developing an EVP is common sense, not rocket science. Yet few businesses, even in this age, are bothering to consciously adopt any one of these principles, let alone all of them.
The fact is that articulating and implementing a client value proposition, while critical, will never succeed unless you take a step back and focus on the people who will be delivering that value – your own employees.
Developing an effective EVP means reflecting on and articulating why someone would want to work with you and thinking beyond purely material benefits to culture, reward, recognition, benefits and opportunities to develop as people.
Not every EVP needs to be the same. There will be any number of reasons why people would want to work with you and your team. Play to your strengths.
But it all comes down to that cycle we started with. To grow, you must attract and retain great clients. To do this, you must attract and retain great staff. To do this, you need a clear proposition. If you don’t have one, or cannot articulate one, you will find out soon enough through staff turnover.
David Haintz writes exclusively for Professional Planner and is principal of advice consultancy Global Adviser Alpha.