How can you make your top talent poach-proof? By redesigning your EVP. But new research shows an alarming percentage of employers have no plans to do this.
We can talk about the Great Resignation until we’re blue in the face, but what are we actually going to do about it?
According to new research from PwC, nearly 50 per cent of executives aren’t planning to do much at all.
In its recent report, What workers want: winning the war for talent, PwC interviewed 1800 Australian workers, the majority of whom were non-managers or middle managers, with 15 per cent holding senior executive roles.
Through this research, it was able to localise Microsoft’s global 40 per cent turnover statistic that we’ve equated with the Great Resignation for months now, finding that 38 per cent of Aussie workers are looking to jump ship in the next 12 months. This figure includes those who’ve only just changed jobs in the last few months.
This statistic alone should ring alarm bells, but it becomes even more worrying when you pair it with another fact, which is that 48 per cent of employers have no intention of updating their employee value proposition (EVP) in response to this predicted mass exodus.
Are these employers shooting themselves in the foot? Some would say so.
“Organisations that aren’t looking at this [will be] incredibly vulnerable,” says Caitlin Guilfoyle, Future of Work, Growth Play Leader at PwC. “It’s going to be a threat to organisations as they look to drive post-pandemic growth and recovery in what will be an increasingly challenging market, particularly when competitors are looking at [changing their EVPs].”
What employees actually want
PwC identified seven levers to help HR and employers consider what to include in a refreshed EVP, based on its research into what employees value most. They are, in order of preference:
- Remuneration and reward – salaries, bonus, profit-sharing schemes, access to company car/phone, as well as other financial incentives.
- Wellbeing – a focus on work/life balance, mental health support (i.e. EAPs), lifestyle benefits (such as money to spend on wellness initiatives) as well as other wellness benefits, like a gym membership subsidy.
- Experience – a company’s efforts around diversity and inclusion, its culture, the people employees get to work with and the support/networks available to them.
- Ways of working – levels of autonomy, flexibility, ability to collaborate, technical enablement and any travel associated with the role.
- Career development – upskilling opportunities, leadership quality, access to mentoring or coaching, on-the-job learning as well as career progression opportunities or secondments.
- Brand – a company’s values around things like environmental, social and corporate responsibility, volunteering abilities, and an alignment on values.
- Workspaces and places – the physical office design, location, work-from-home office set up support, good technologies and workplace perks (free coffee or food).
Interestingly, previous reports have shown that Aussie workers prefer work-life balance over increased pay, so it’s somewhat surprising to see remuneration at the top of the list. But when you layer COVID-19 on top, Guilfoyle says it makes sense.
“Job and financial security have been front of mind for many of us during the pandemic. Also, some of the other benefits that people see in their organisations haven’t been there for the last 18 months,” says Guilfoyle.
The report also notes that, historically, when job quality and satisfaction rates take a hit, expectations around salaries increase.
However, it’s important that employers remember that pay is considered a hygiene factor, she adds. Simply giving people a raise or bonus isn’t enough for long-term engagement. This needs to be paired with a combination of the other factors that make people want to turn up to work every day.
Employers and employees are misaligned
When breaking the seven levers down into specific offerings, PwC’s report shows that employers totally missed the mark.
Here’s what leaders think their people want, in order of preference, compared to reality.
- #1 Values alignment between worker and organisation (employees rated this 16th)
- #2 On-the-job learning (employees rated this 13th)
- #8 Pay, including incentives, bonuses and share schemes (employees rated this 3rd)
- #12 Access to coaching and mentoring (employees rated this 26th)
- #13 Working with good people (this was employees’ number 1 value)
- #14 Autonomy (employees rated this 8th)
- #15 Environmental, social and governance (ESG) (employees rated this 25th).
- #17 Working from home (employee rated this 9th)
The reason for this discrepancy, says Guilfoyle, could be due to employers viewing things such as on-the-job learning and ESG commitments as high attraction levers, when many employees now consider them part and parcel of normal business.
“Even things like training and development, which have traditionally been seen as incentives, didn’t rank as highly in this report. We think that’s also because it’s seen as a baseline expectation.”
Designing an EVP for the post-pandemic employee
When reading articles and research on how to cater to the post-pandemic employee, employers can be forgiven for feeling confused about what to focus their EVPs on, says Guilfoyle.
“One week it’s about hybrid working. The next week it’s about learning and development. So it can be really hard for employers to cut through this.
“But one EVP for an entire organisation no longer cuts the mustard because [employees] all want and need different things.”
For example, PwC found men preferred more traditional benefits, such as lifestyle subsidies, company cars and travel opportunities. Gen Z were most interested in work-life balance and one-the-job learning. And Gen X and Baby Boomers were most likely to want to work alongside good people.
Those in non-management roles were more likely to place autonomy and the location of the office as a preference, whereas middle managers centralised pay and incentives as their top picks.
“We saw this when there was an evolution of customer experience. Organisations that were customer-facing tailored journeys towards their customer personas. Now we need to flip that back into the organisation and say, ‘What are our employee personas and how can we look to meet their needs?’
“You don’t want to be making enormous wholesale changes to the EVP too frequently, because you don’t want it to become overly complicated, but leaders play a critical role in being able to flex a little bit in terms of what their teams need.”
Beyond bells and whistles
In the past, EVPs haven’t been designed with intentionality, says Guilfoyle. Employers need to acknowledge that people’s needs will shift over time and they can’t just focus on bells and whistles.
For instance, a candidate might be lured towards a job with the promises of access to a company car, but during their employment they might have a family, so flexible hours might come out on top.
Employers also need to be aware that employees can see through the mere illusion of great benefits.
For example, when telling prospective candidates that you’ve got an onsite chef to provide free breakfast, lunch and dinner for them, what they might actually hear is, ‘You’re going to be working so hard that you won’t even have time to leave for a lunch break,’ or, ‘You can forget about being home in time for dinner. You’ll be dining Al Desko from now on.’
Bells and whistles benefits do still have a role to play though, says Guilfoyle.
“Employers need to earn the cost of the commute – people choosing to go into the office because they see the purpose around that.”
And some of those shinier benefits are a great way to do that. You just need to be able to back up your perks with solid, consistent cultural factors that cater to employees’ experience of work holistically – such as their wellbeing, development and financial security – because a quarter of respondents said the thing that caused them to join the organisation isn’t what has kept them there.
“One EVP for an entire organisation no longer cuts the mustard.” – Caitlin Guilfoyle, Future of Work, Growth Play Leader, PwC
Considering ‘working with good people’ was the number one benefit for employees, Guilfoyle suggests figuring out how you can promote employees in campaigns about why it’s great to work for your company. You could also bring them into the recruitment process, so candidates have an opportunity to get to know their potential colleagues from the get-go.
PwC also found high levels of confidence amongst executives who were asked about their people’s engagement levels. None of them reported thinking their people were even somewhat disengaged. But as the report’s authors state, “In the current climate we can’t equate employee engagement with an intent to stay”.
Due to drastic value shifts during lockdowns, many people could be easily lured towards greener pastures, even if they are relatively happy. Also, due to skills shortages in Australia, we can expect talent poaching to rise. Data shows that 38 per cent of UK workers have been approached for a new job five times in 2021 alone, and five per cent reported being approached ten times.
“People might feel engaged and not actively looking [for a new job], but then you can also see all the interesting things other organisations are offering in the media. This may prompt people to consider leaving.”
So, even if things seem rosy and employees don’t show signs of becoming a flight risk, that doesn’t mean you can sit back and relax. Consider what you can be doing now to make your talent poach-proof. Be proactive and offer bonuses/incentives to your high performers, rather than reactively responding with a counter offer once they’ve met with a recruiter.
Final food for thought
Peppered throughout PwC’s report are questions for employers to keep in mind when thinking about rebuilding their EVP, or checking that the current one is up-to-scratch.
Here are some that stood out:
- Is your remuneration market competitive for the type of employee you have or want to attract?
- Do you have the right mechanisms in place to review remuneration and rewards frequently?
- How are you benchmarking your approach to wellbeing support as a core pillar of your EVP?
- Are you clear on your own employees’ preferences?
- How does your organisation provide flexibility within your EVP so it can be adapted to individual needs and preferences?
- How do you sell the people and culture of your organisation in talent attraction and selection processes so candidates get to see the people they’ll be working with?
“Don’t just pay lip service to this stuff,” says Guilfoyle. “[Answering these questions] requires some considerate thought and attention. Open up a two-way dialogue by bringing employees into the conversation.”
Finally, Guilfoyle says to take people on the journey with you.
“A lot of organisations only want to talk about things after they’re done… but we’re seeing the need for more transparency, so making people aware of your commitment tells them you’re willing to invest in them.”
Need to upskill before you can address some of your people’s pressing EVP needs? AHRI’s suite of short courses cover all manner of topics, from mental health at work, creating high-performance teams and building ethical workplaces. Learn more here.