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Why You Need a More Agile Employee Value Proposition

May 10, 2019 • By Ken Gibson

The employee value proposition you offer is your first (and likely only) chance to make a positive impression on the people you want to recruit to your business.  And the ability to make a compelling case for your company in today’s talent market is becoming increasingly difficult.  You cannot simply offer up the same pay package you did five years ago and see the same results.  That will make a bad first impression.  The marketplace is demanding something different.  Something better.

So, what caused this?  How did we get here and what does it suggest for your value proposition going forward?

The technological and economic transformation of recent years is the primary driver of what the talent market is now demanding of employers.  That prosperity has created both an opportunity and a challenge for modern businesses.  The opportunity is that enterprises able to get and remain “ahead of the curve” can capture a competitive advantage that is hard to overcome.  The challenge is that there is a scarcity of the kind of talent businesses need to get and remain “ahead of the curve.” 

The result of this new business environment is that to successfully lead a company, you must become an adaptation expert.  There is no facet of your business that does not require ongoing scrutiny to make sure it is keeping pace with an ever-shifting landscape.  And you must combine that scrutiny with a system for effectively addressing the changes that need to be made.  You must maintain what might be termed “structured flexibility.”    

In such an atmosphere, your employee value proposition will be vulnerable if it isn’t equally adaptable.  Why is that significant?  Because, if your value offer suffers, you lose the ability to attract and retain the best talent.  When that happens, everything else falls apart. 

Consequently, to succeed in the future, you will need an agile approach to your employee value proposition; one that can easily “flex” with the conditions driving your ability to compete and win.  In general terms, there are three reasons for this.

1. Change is Now Exponential, not Linear

Things happen so quickly in business these days that you need to have systems and processes in place that will allow your people to respond quickly to change.  And you need an operational framework within which that adaptation can occur.  Here’s why that is so critical.

Regardless of the hyper change that is ongoing, you need your people to maintain the business model that drives revenue each year while also keeping one eye focused on long-term growth.  They must be able to adapt to the changes happening in the market that come rapidly and unexpectedly; but they also need to be able to make decisions that protect shareholder interests and promote sustained success.

This necessitates a pay offer that properly balances rewards for short and long-term value creation.  And employees need to have a clear understanding of the outcomes for which they are responsible that drive their earnings potential.  They need to have resources available to them that will allow them to drive the results you’ve hired them to achieve.  They need to know their place in the “big picture”; why they are critical to the company’s growth and success.  They need to constantly be reminded of what the future company looks like and what it will mean to them—personally, professionally and financially—if that vision is realized. 

What is an Employee Value Proposition?

2. Performance Management has Undergone a Revolution

Because of the business evolution I’ve just described, companies have been abandoning traditional forms of employee performance management.  Why?  Because they are no longer relevant.  Archaic systems that look backwards in assessing employee performance do not align with the need businesses now have for ongoing mentoring and coaching that a high change environment demands.  Organizations are instituting flexible systems that are forward looking and keep leadership hands on with their employees to ensure priorities are assessed and adjusted in “real time.”  While there may be a long-term strategy at play, review meetings are held quarterly and even monthly to make sure employees know what their execution focus needs to be over the next 30 to 90 days, not the next 52 weeks.

This new way of managing employee performance requires a value proposition that can flex with the orientation the company is asking its employees to adopt.  For example, employees should not be made financially vulnerable because they are asked to support long-term revenue priorities that result in a short-term profit hit.  Companies need to set up short and long-term value-sharing plans in a way that aligns performance rewards with the environment of change employees are being asked to respond to.

3. The Workforce is Neither Monolithic nor Static

Today’s workforce is highly segmented.  For example, even though millennials have taken over majority status (generationally), they cannot be dealt with as a monolithic group that all have the same goals and ambitions in their career pursuits.  Some are just out of college, single and you may be their first employer.  Others have several years under their belt, are married and are trying to establish themselves with a company where they can stay and grow.  And within the millennial demographic, there are a group of elite employees who have the education, skills and experience to literally change the growth trajectory of your company.

So, here again, is a reason a highly agile value proposition is necessary.  This does not mean that you need a different value offer for each of these segments.  Rather, it means you need a comprehensive pay and total rewards strategy that allows you to emphasize different elements for each group.  Employees just out college will relate to short-term “spot” bonuses, for example, that put more money in their pocket right now.  People at the other end of the millennial spectrum— “catalyst” type employees—will want to see long-term upside earnings potential in their offer (stock or phantom stock participation, for example).

The “bottom line” is that businesses operating in today’s age of accelerated change need to surrender to the new reality this environment has created.  Adaptability is the primary skill you now need.  And if you want to be able to attract and retain the kind of talent that will help you thrive in such an environment, you will need an agile but enduring value proposition. 

To learn what an employee value offer should include, read VisionLink's newest report:  What is an Employee Value Proposition?

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Ken Gibson

Ken is Senior Vice-President of The VisionLink Advisory Group. He is a frequent speaker and author on rewards strategies and has advised companies for over 30 years regarding executive compensation and benefit issues.