I had a meeting with the FD of a new client recently. He harrumphed and said ‘Bloody HR, always finding ways to keep themselves busy, what is it they want to spend my money on now?’. We then had an enjoyable 45 minutes or so outlining why his organisation should invest time and money in defining their EVP (note the use of the word invest not spend). So what did we talk about?
It’s good business
In a world where good staff are hard to find and keep, a well formulated and implemented EVP will make you money and save you money. As with any good business practice it needs a clear plan, with clear deliverables and a focus on what success looks like both immediately and in terms of a legacy of improvement for the future.
It’s an essential part of your overall brand strategy and will serve to align your customer and employer brand
Let’s face it you can’t be something on the outside that you aren’t on the inside. Regardless of the products you sell or the services you provide, customers expect a good experience, and more and more that’s delivered by people whether they are front of house, back of house or the glue in the middle.
Clear statement of intent
Do what leaders do. Be proud to clearly and unequivocally state what you stand for as an employer to your existing staff, potential staff and all other key stakeholders. Raise your flag, you’ll be surprised how many people follow it.
(Re) Position HR Department
In a world where most companies are seeking to future proof their business, the people agenda represents one area of risk that can be difficult to come to terms with. They can be confident of their estate and infrastructure, systems and processes, products and services and more, but all of this is meaningless if they can’t find the right people who’ll succeed and stay. An EVP will derisk the process. More than that it can help reposition the HR Department from a support or service function that just pays, hires and fires to the catalyst that helps drive business success.
Saving on recruitment costs
I was able to share with him some compelling examples of how we’ve saved clients hundreds of thousands of pounds in this respect (a retailer £500k, a bank £980k for example). CEB’s extensive research in the US calculated last year that an organisation with a compelling, well executed EVP, hiring 500 people a year at an average of $50k would save $2.6m in attraction costs – and assuming they employ 5000 people would save $10.25m in attrition costs. Which leads me to…
Savings on staff turnover
A well-executed EVP will help you rehire your disengaged staff. Furthermore, those hired will be ‘on brand’, ‘on expectation’ and in the right place with the right people. The often quoted Rentokil survey estimated that the true cost of attrition is 2.5 times salary. We have a client who reckons it’s 18 times and another who says it’s incalculable. However, you do the sums it’s clear that a great EVP is great for business, the customers and the bottom line.
Increased Staff Engagement
I was able to show him how we’ve proven this through lower attrition, a higher proportion of staff referrals, reduced absence and staff generated ideas…all of which went straight to the bottom line for the clients involved.
And if your staff engagement is improving then your customer experience is likely to go the same way. Again, we have a client whose bonus is partly dependent on the customer net promoter score. And the way we make his bonus happen is by spending part of his marketing budget on his own staff to then deliver for the customer. Clever and it works.
So, how did the meeting go?
Pretty good. The EVP and subsequent employer brand has galvanised the business internally and is driving real hard benefits in the recruitment markets. As a direct result the internal perception of HR has never been better as a successful people agenda helps to drive a better and more successful business.