Career development, meaningful work are key drivers of employee value proposition
- A Mercer study found that career development and meaningful work were key drivers in creating greater employee value proposition (EVP). These findings come from an analysis of data from more than 5 million employees in more than 140 organizations across the globe in Mercer Sirota’s normative database on how to foster employee commitment, attraction and retention, especially in a tight labor market with record-low unemployment. According to Mercer’s Global Talent Trends report, half of the HR leaders polled said talent scarcity was a concern, and nine in 10 C-Suite executives said they expect talent competition to increase even more in the upcoming few years. According to Mercer, turnover costs range from an estimated 90% to 200% of a departing employee's salary.
- The analysis focused on employees' satisfaction with seven crucial EVP factors: reward for performance, compensation, benefits, career development, support for wellness, sense of belonging, and meaningful work. The analysis factored in how employee satisfaction correlated with five outcome measures: overall satisfaction, levels of motivation, advocacy for an organization, commitment, and retention. Study results found that the seven EVP factors and five outcome measures were significantly connected. Generally, career development had the strongest correlation with outcome measures and employees were more motivated to perform their best when they feel their work is personally meaningful.
- Mercer concluded that although there was no direct causal relation between EVP factors and outcome measures, the report raises important considerations for organizations, such as is whether their total rewards strategy is broad enough, career paths are clear, employees think their work is meaningful, and their organization has a strong sense of community.
The connection between EVP factors and outcome measures is no surprise; various studies showed that the biggest drivers of EVP are compensation, career development as a top total rewards factor, work flexibility and healthcare and voluntary benefits. More recently, meaningful work and a sense of belonging have emerged as contributors to employee satisfaction.
Branding also is an important part of EVP and employers' efforts to break through the talent scarcity. For instance, recruiters are marketing their organizations and their value to candidates, whose experience is enhanced by personalizing the process. But more generally, branding and EVP has made employers more seriously consider how they are perceived both internally and externally, and has brought some to consider making certain forms of relevant activism tied to their brand. Employees increasingly want their companies to take a stand on issues, too.
The Mercer report gives employers important considerations for building stronger EVP. Achieving this goal won't be without challenges in a labor market that favors workers. But by staying focused on the human factor, which includes what workers want most — respect, along with recognition, work-life balance, employer accountability and honesty — employers can stay competitive.
Correction: A previous version of this story omitted one of the sources of the Mercer analysis. In came, in part, from Mercer Sirota’s normative database.