If you’re still keeping your EVP completely separate from your remuneration levels, you may end up paying the price. A sizeable degree of focus within the talent acquisition and employer branding community is directed towards understanding, very simply, what people want.
What drives people towards certain organisations, certain employers, certain roles, certain sectors? And what does the opposite? What makes certain organisations toxic? How people respond to the why or, indeed, the why not, varies hugely.
Whilst some organisations demonstrate dexterity, nuance and understanding, others appear fat-fingered and tin-eared. Our two main political parties have been, of late, much to the fore in this respect.
First, the Labour party tried to emulate Jeremy Corbyn’s Glastonbury success by organising Labour Live – or JezFest – in their leader’s north London stomping ground. Attendances, however, were some way below that of Glastonbury, despite Unite giving away free tickets and others being offered at 70% discounts. The festival was quietly forgotten. Not to be outdone in a ‘hold my beer’ moment, however, were the Conservatives.
Last week saw them attempt to release Love Island water bottles to coincide with the, er, climax of the show. Not only were they accused of blatant plagiarism but more fundamentally, the attempt was seen as another example of simply not understanding an audience and their motivations.
And the why is very much the essence of an Employee Value Proposition. It’s the source material around which organisations go about promoting their career messages.
Clearly, each EVP should, by definition, be unique. After all, they should sum up the essence of one particular organisation in a particular market at a particular point in time. And if there’s little in terms of rules, there are some clear conventions:
- A balance of flexibility and consistency.
- Authentic yet aspirational.
- Something that stands apart from salary and benefits.
Hard to disagree, I hope, with any of those. Or is it? Are we seeing mounting evidence that money is playing a larger and larger role in candidates’ career making decisions? Is remuneration becoming an increasing factor in the why?
Up until very recently, it’s felt like heresy to have much, if any, relationship between an EVP and remuneration. But today?
For some time, the UK labour market has appeared contradictory. With unemployment down to 40-year lows, the Phillips Curve – a supposed inverse relationship between the level of unemployment and the rate of wage inflation – suggests that salaries should be going up. Only they haven’t really. Inflation and wage growth both appear stubbornly subdued at around 2.5%.
But is this beginning to change? Let’s look at some current evidence. It was reported in late July that 1m public sector workers are set to receive their largest pay hike since 2013, of between 1.5% and 3.5%. According to REC, the last quarter saw starting salaries rising at their fastest rate in three years.
XpertHR in July suggested that the median pay increase between March and May was 2.5%, not huge certainly, but a quarter of all settlements were 3.1%, the highest figure since 2009.
For me, there are two key factors driving this shift. The first is simply necessity. According to the ONS, of the 27m households across the country, between 1987 and 2016, we were net lenders, saving more than we spent. Since 2016, however, economic pressures have meant we have become a nation of net borrowers, spending more than we are earning.
And for those who are saving money, less and less is being banked. Today’s savings ratio – the proportion of disposable income we save – is 4.1%. In the 90s, the comparable figure was 14.7%.
So, we are feeling the pinch, at the same time as we’re increasingly aware that we have employment choices. According to the Bank of England, more than 900,000 people actively changed jobs in the quarter October-December 2017 – the most recent recorded – the highest figure on record since 2004.
For CV Library, the number of job vacancies in the economy increased by 11.6% in Q2 of this year. So, if you thought it was a competitive market before then, it suddenly got nearly 12% tougher.
Research from recruitment consultancy Morgan McKinley suggests that the month on month number of financial services professionals actively job hunting spiked 29% in July. This was the first increase in such activity – outside of a January – for 2.5 years.
And for the fourth month in a row, London saw the net departure of workers to overseas markets and employers. The research, from LinkedIn, suggests we are fast on our way to becoming a net exporter of jobs and talent.
Two further points tend to bear out the increasingly unavoidable conclusion that money and the prospect of an increased salary should not necessarily be divorced from the why of an EVP.
Hugely telling research from this week, published by the Resolution Foundation, highlights the difference in pay awards for those people who change employers over those who stay put. The average salary hike enjoyed by people changing jobs over the past 12 months is now a significant 11% - the highest level since the early 2000s. Comfortably more than the 2.5% that might be expected by those who stay loyal to their employer.
(This is backed up by Morgan McKinley who suggest that, within City-based finance professionals, someone moving jobs in June would have been looking forward to a 16% increase in pay). As the saying goes, you do the math.
There is clearly doubt and job insecurity floating still around the economy – largely in the form of our old friend, Brexit. However, more people are moving jobs and more money is now expected to facilitate such moves.
A point backed up by some interesting research from Harris Poll in conjunction with Glassdoor. Using a sizeable sample, the research asked candidates about the factors that might entice them to apply to a job ad on Glassdoor. Perhaps surprisingly, only 32% would be inspired by a favourable employer review. However, the most inspiring factor, with 67%, likely to see someone applying was a published salary appearing on the advertisement.
As we craft EVPs, some rich and fascinating themes have become central – candidates want to hear increasingly about organisational purpose, they want to understand how they will grow and develop, they want to understand about values and culture. They want important questions answered about diversity, about ambition, about growth, about ethics, about communication, about transparency. And rightly so.
But whether we like it or not, whether we choose to recognise it or not, whether we respond to it or not, candidates expect to receive a significant hike in remuneration when they do move.
If they do not feel that’s likely to happen when they come across your employer brand or EVP, they have an increasing number of alternatives to choose from.
Whether we like it or not, it’s going to be tough to avoid the new Abba/Mama Mia movie this summer. Money money money will be all around us. If you feel that money isn’t something you want to associate with your Employee Value Proposition, you might not be the winner who takes it all in the war for talent.
If this blog has struck a chord, this link will take you onto my site where you’ll be able to access previous blogs plus a number of research pieces touching on the employer brand.