These days we don’t just think in terms of a job and a paycheck. We look at the whole employee experience: the journey an employee takes with your organization throughout the employee lifecycle (ELC), from recruitment to exit. All along the way, understanding and engaging better with your employees benefits both your company’s culture and its bottom line. Read all about creating value throughout the employee lifecycle.
The employee value proposition: more than just a paycheck
We see it all too often: an employee leaves, and their manager didn’t know they were unhappy until it was already too late. It’s a lose-lose situation! Recruiting and training a new employee costs companies big time: up to 200% of the employee’s salary, according to Josh Bersin of Deloitte. In addition to the cost of salary, companies have to calculate the opportunity cost of what the employee leaving did not achieve. On top of this, morale suffers when employees who stay behind have to pick up extra work to fill the gaps – which can lead to more loss. That’s why it’s essential for companies to truly understand why employees leave, and what really gets them to stay.
Employee value proposition (EVP)
One of the keys to understanding this is the employee value proposition (EVP). The EVP is the balance of rewards and benefits the employee receives in exchange for the skills, capabilities and experience they bring to the company. Beside salary, a good EVP includes benefits and perks, the potential for development, career perspective and a good atmosphere.
But it goes even further than that. Defining your EVP is about communicating what makes your company unique and what it stands for. This includes your values, your culture: all the things that make people proud and motivated to work for your company. Knowing what value you’re offering and how it comes across to job candidates is essential to building a strong employer brand. Integrating a strong EVP into every aspect of your business helps attract the best talent and retain top performers.
The employee lifetime value: ensuring value in each stage of the cycle
To better understand the value each employee brings to your organization, it’s important to understand the employee lifecycle (ELC) and the employee lifetime value (ELTV). The ELC consists of 6 stages: attraction, recruitment, onboarding, development, retention and separation. The ELTVvalue is the total net value each employee brings to the organization throughout the employee lifetime value.
Companies need to invest in the best employees starting in the recruitment and onboarding stages. According to CareerBuilder, 78 percent of job candidates say the overall candidate experience indicates how a company values its people. So it’s important to understand what experience you should provide to attract the best candidates for your company.
It’s also important to place a strong emphasis on how well the candidate’s values fit into the company culture. Culture fit is a highly accurate predictor of an employee’s long term success and ELTV. Once you’ve got your new hires on board, a good fit with management and employee engagement is what makes them stay. Managers, teams, and company culture influence retention rates and the value employees create for the company. According to the Corporate Leadership Council, companies that shift from a culture of disengagement to high employee engagement reduce the likelihood of departure by 87%.
Putting it into practice: the logistics sector
To see how a focus on the employee experience works in practice, let’s look at the logistics sector, which has a notoriously high turnover. Just as in other sectors, in a strong economy it can be difficult to find qualified candidates. So how can the logistics industry consistently attract and retain great employees? It all starts with assessing the values employees are seeking beyond their paycheck, and understanding what drives them. Twegos has developed value assessment technology with a utility for transportation and logistics companies. This technology can be used to transform the hiring and matching process for any type of employee or team, from back office to C-suite.
Our scientifically founded Value Fit tool measures the job candidate’s values and compares them with the values of the hiring manager, the team and the company.
The Biggest Belgian logistics company, responsible for mail delivery, clearly improved their return on investment with the help of our value fit test to determine job candidate fit. With our help, they assessed and clarified their EVP and determined who would be the best fit for their company, so they could raise their ELTV and maximize their investment all along the ELC.
The retention rate of people with a good company fit is 13% higher than people with a low fit with the company values. Together with operations we looked for the ideal cut-off level to insure sufficient inflow, while still optimizing on value fit. Without any impact on their operations we are able to instantly reduce their recruitment-, training- & onboarding cost by 3%. Representing a cost reduction of several millions.
Having a deep understanding of who is the best fit for your company and whether your values align helps you manage and engage the employees that will drive your growth. It’s not a matter of gut feeling or guesswork: employee fit and values can be measured and monitored using concrete metrics.
Our Value Fit tool measures what drives an individual. We analyze the fit between the job candidate and your company to make a significant impact on the company’s turnover and performance. Check out our offer and impact here.