Why it’s time for HR directors to re-evaluate the employee value proposition
HR has moved from ‘road blocker’ to ‘go-to business partner’ thanks to its rapid response to the workforce challenges arising from the coronavirus pandemic. But as the reality of organisations having to scale down to survive hits, it will need to be more like a trapeze artist – balancing the ‘can do’ team spirit with tightening budgets and potential layoffs. By re-examining the employee value proposition, HR can effectively lay the foundations of this change, says Bill Nuttall
The impact of the pandemic on many national and international organisations is being re-evaluated after the initial response to this epic force majeure. Thought leaders in the HR profession are trying to establish a credible picture of what the new working environment is likely to be, so that they can advise boards and their executive teams on taking the most appropriate measures to transition the organisation out from the current downturn into a more agile and resilient future.
A picture is beginning to emerge. It is one of a working environment that won’t be the same as before the pandemic, although it is one in which HR leaders will have to work hard to retain the loyalty, commitment and innovation that staff have so admirably demonstrated while struggling to keep services running and customers/end users satisfied with the quality of services being delivered to them.
The key challenges will be specifically around communications, wellbeing, diversity, culture and managing change without the need for bureaucratic processes. This is largely because HR needs to demonstrate its agility in responding quickly to the psychological contract needs of employees who are key in supporting organisations wanting to sustain their businesses in return for continued employment.
Indeed, there have already been examples of HR directors being proactive in the face of the ‘burning platform’ in front of them by helping service managers develop new agile roles within their teams and simplifying HR policies and processes, enabling operational managers to quickly adapt and introduce new leaner work processes as standard practice that will maintain the organisation as a going concern. By rapidly redesigning (selected) jobs, simplifying reporting processes and policies to support frontline management, HR has begun to be recognised as the ‘go to’ business partner for help and not be historically viewed by some as ‘organisational efficiency road blockers’.
During these hard times HR has also played a central role in developing and improving communications within the organisation, facilitating the required shift in culture, engagement, problem solving and celebrating success as and when it happens. By enhancing appreciation of the employees’ passion and loyalty as well as providing flexible/remote working options for employees during these difficult times, the longer term ROI (return on investment) for the hard work being done now, will become further apparent when organisations inform, consult and engage with their employees on the future measures needed to help them ‘bounce back’ – whatever they may be.
While HR has played a pivotal role in getting people to pull together in times of crisis, there is an even harder challenge ahead for HR leaders. This will be one of repositioning relationships – between the organisation and the individual – as the purpose of the organisation will need to be recalibrated or redefined in order to move forward in a more agile, resilient and sustainable way – just at the point when it has taken some economies to fully recover from the crash of 2008. In the minds of many HR commentators, structural reform will be inevitable for some organisations, and this will require HR directors to be politically astute, commercially savvy and a trapeze artist in balancing the current organisational ‘can do’ team spirit with the prospect of organisations having to scale down.
Writers have described the impact of the pandemic as being the catalyst for creating a new norm – one of constant change. Organisations have therefore begun navigating a course of transitioning from the position of initial crisis response and temporary stability to one of redefining their medium to longer term organisational purpose. HR directors are helping businesses to develop new people strategies and redefine the portfolio of ‘people services’ against a backcloth of new emergent national, regional and local political-economic-social – technological- environmental and legal (PESTLE) factors that have arisen as a result of the pandemic. There is a realisation that moving forward, the HR agenda will be significantly influenced by these wider considerations and yet HR directors don’t necessarily want to lose vital lessons learned from the knowledge, skills and experience acquired in maintaining a fully motivated, engaged and informed workforce during these past 5-6 months.
HR as voice of reason and voice of challenge
For HR directors, there is going to be a tough agenda ahead. They will need to be seen not only as the voice of reason but also the voice of challenge. In fact, informed decision-making and recommendations based on key HR and financial data sets, actively engaging, influencing and negotiating with key stakeholders from the chief financial officer to the chair of the board will be the key skill sets for HR directors, if not already acquired, to be applied with a new sense of gravitas.
The language used by HR directors for effective engagement at this level will need to be inclusive of hard workforce data, facts, statistical evidence and detailed financial costings. This is because the HR agenda will need to be closely aligned with the organisation’s finance agenda for the foreseeable future. Therefore, as well as culture, health and wellbeing, organisational development interventions and the advocacy of a new work life balance – all the tremendous work HR has being doing to support line managers and their staff to keep operations going – the HR agenda will be significantly influenced by finance, investment, lean working, structural reform, scaling down and potential job losses. HR directors will simultaneously need to focus on retaining in-house talent, revisiting the workforce profile, identifying who needs to be upskilled and which staff are receptive to flexible/remote working, while calculating the impact of any redundancies, making sure that the organisation can still attract external talent.
The new norm for HR will therefore require HR directors to sensitively manage these new dynamics, focusing on balancing inevitable structural reforms with loss-avoidance – in terms of not losing the energy, loyalty, good will, team spirit and passion for the organisation shown by its employees – some of which would have started to become great brand and cultural ambassadors for the business. A number of HR directors believe that all that has been gained over these past 5-6 months in terms of informing, consulting and engaging positively with the organisation’s workforce doesn’t have to be lost if they get on and tell the truth now about what lies ahead. This has been shown to be a good strategy in the past where surveys have proved that employees respect senior management more for being transparent when communicating difficult decisions to be made that will ultimately affect the business and job security. Employees do not respect managers who are unable to be candid and honest with them as they only create a false sense of security. Given the reality that many organisations, if not all, will be unable to rebuild and return to their pre-pandemic operating structures, the imperative will be to ‘push on’ and begin to transform their operating processes making them more and leaner while maintaining quality, underpinned by business continuity measures. In conjunction with this, they will need to employ a workforce whose profile is also going to be different from before.
Resetting the dial by re-examining your EVP
Authentic, compassionate and credible HR leadership is required now in order to start laying the foundations of change, and HR directors can effectively demonstrate this by re-examining their organisation’s EVP (employee value proposition). This will not only enable organisations to attract the ‘best of the new talent’ and retain the ‘best of what we grow internally’, it will enable them to reset the dial when it comes to actively engaging and listening to what employees have to say about what will matter most to them as organisations make the transition from pre- to post-pandemic operating systems.
Some visionary HR directors already have this EVP mindset. They have taken advantage of the impact of the pandemic on the complete package of benefits to existing and new employees to future proof and de-risk the process of the consequential and inevitable realignment of an individual’s and the organisation’s purpose in the new evolving working environment that lies ahead. The ‘WIIFM’ (What’s In It For Me) factor for new and existing staff will be critical to the introduction of structural reform, as it will signify the level of confidence and affiliation new employees (wanting to join the organisation) and existing employees will have in the organisation despite the challenges and uncertainty ahead.
So, this is not a prophetic ‘doom and gloom’ article. Far from it. Let me explain. For those who are not aware, EVP takes its name from the marketing concept known as the Unique Value Proposition (UVP). UVP is the value that a company provides to its customers that differentiates it from ‘market competitors’. Therefore, the EVP can be seen as the unique value the organisation brings to its employees which differentiates it from its competitors. Indeed, to some commentators, HR directors believe that the employee value proposition is the very essence of the organisation, in that it is a set of value-based benefits that the employee receives in return for the capability, experience, knowledge and skillset they bring to and use at work, enabling the organisation to achieve its goals and purpose.
Generally speaking, an organisation’s EVP comprises of five principal elements:
- Pay – eg base salary rates, pay incentives, transparent pay processes
- Affiliation – eg alignment and identification with an organisation’s mission and values, reputation, business ranking, quality of work environment and culture
- Work Content – eg work structure, variety, autonomy, feedback
- Career – eg progression, status, growth and development, coaching, training
- Benefits – eg work-life balance, working from home, flexible working, time off, holidays, job security.
Taken holistically, the above removes the arduous task of HR using a narrow lens in the piecemeal review of individual (and sometimes, outdated) HR policies covering staff engagement, coaching and mentoring, training, flexible and remote working, cultural development, staff pay and benefits, etc. The advantage of reviewing the overarching EVP as a whole provides HR directors with an early opportunity in measuring how successful the full range of value-based benefits will be in attracting new and retaining existing employees. It will also test the effectiveness of the employee’s ability to align their own belief and value systems with those of the organisation, despite the prospect of structural reforms that lie ahead. The EVP underpins a new psychological contract between employer and employee that will be needed to secure recovery.
Review and listen
When reviewing the employee value proposition, the HR director’s team should actively and intensely engage with (and listen to) existing employees and new potential employees by organising focus groups to: identify which parts of the organisation employees would value the most; find out what attracts people to the organisation; ask why do people stay and why do people leave. HR directors can use the data collected from these planned activities and make early gains in winning what undoubtedly would be costly (money and time) new talent and employee retention wars and swiftly improve alignment between the individual’s purpose and that of the organisation, thus keeping it ahead of the competition.
By not undertaking an early diagnostic review of the organisation’s EVP, the organisation will incur higher costs (money, time reputation, marketing, public relations etc.) later on as the following begin to take root – a negative workplace culture, decreased levels of trust, high disengagement, poor morale and increase absenteeism.
The aim of developing, maintaining and regularly reviewing the EVP is to ensure that (1) as an ‘employer of choice’ the organisation can always differentiate itself from its competitors (2) HR continues to play a pivotal role in maintaining high levels of employee engagement though evidence of active listening when reviewing the benefits that matter most to employees and (3) HR can measure how strong (or otherwise) individual purpose, values and beliefs are aligned with corporate organisational purpose, values, etc. – especially during times of change. Being seen as an employer of choice, even in hard times, is the real prize. Like Apple, organisations ideally want the best external talent to seek them out first and in doing so, avoid time consuming, high cost recruitment and selection processes.
As a final comment, HR commentators are already identifying what an effective EVP should be informed by, listing things that employees have begun to value most from their employers during the pandemic. The list includes (but is by no means exhaustive): flexible working opportunities, upskilling opportunities, digital learning, working from home, access to better IT, improved health and wellbeing, a culture of trust and support, feeling safe, workforce diversity, acceptable behaviours and an agreed set of values that applies to everybody in the organisation. An organisation’s success is achieved through the people it employs and this success will only be assured through an effective employee value proposition that is based on the hard lessons learned over the past 5-6 months.
In the minds of many HR commentators, structural reform will be inevitable for some organisations, and this will require HR directors to be politically astute, commercially savvy and a trapeze artist in balancing the current organisational ‘can do’ team spirit with the prospect of organisations having to scale down