“Happiness at work is greater and better than employee engagement.”

These were the opening words of Sarah Metcalfe, Chief Happiness Officer of Happy Coffee Consulting at RefineEX, our recent virtual HR summit.

From a cancer charity to a cat flap company, Sarah’s background in customer experience has taken her on an eleven-year journey into happiness at work. She is a firm advocate of redefining the meaning of the employee value proposition (EVP). Part of that has to do with the fact that employee engagement, a crucial part of EVP, isn’t turning out to be as rewarding as companies had hoped.

In this article, with excerpts from the discussion*, we will go through:

The current definition of EVP
Why upgrading it is the need of the hour
How to bring about those changes in your EVP program

Watch the entire session here:

Employee Value Proposition: Definition

The standard definition of an employee value proposition (EVP) is a unique set of benefits that a company offers to an employee in return for the skills, experience, and performance that they bring to the table.

An EVP is an essential part of employer branding. Employers use it to attract new candidates, retain their in-house talent, and stand out in a fiercely competitive market. A market where sometimes, the products might not be all that different, but the work culture makes all the difference.

According to AIHR, there are five elements of an employee value proposition:

Compensation
Work-life Balance
Stability
Location
Respect

All of these elements together lead to greater employee engagement…or do they?

Employee value proposition model: Bring together different viewpoints. Include your employees in the conversation./

Why It’s Time to Change the Employee Value Proposition Model

Employee engagement has been a buzzword for years. Companies have invested millions of dollars into their EVPs to capture that elusive seal of employee approval. But the past six years have revealed some surprising twists and turns.

According to the Gallup State of the Global Workplace Report, 2021:

Companies spent more than one billion dollars on employee engagement schemes.

But…

Only 20% of employees felt engaged in their work.
Companies lost over 8.1 trillion US dollars through low engagement.

“Traditional EVPs have a lot of these things. We’ve got fancy fruits, we’ve got gyms, we’ve got wellness programs, massages, counseling, health, insurance, breakfast, even smoothies. And yet, employee engagement is not moving.

So we can give people everything here and what have we found? It’s not doing it.”

–Sarah Metcalfe, CHO of Happy Coffee Consulting

So companies are trying to do the right thing with their employee value proposition. But these efforts are barely moving the needle. Why?

#1. Post-pandemic changes

As Sarah pointed out, the world of work is changing. This great quote by Tom Friedman sums it up: “Once a vast majority of us worked with our hands. Then came a time when we worked with our hands. In the age to come, we will work with our hearts.”

“When we think about the future and technology and machine learning and AI versus people…well people have the hearts.

How do we put them at the center of our workplaces, and how do we make sure that they are doing what they do best?”

#2. Unintended side effects

In an insightful article in Harvard Business Review, Lewis Garrad and Tomas Chamorro-Premuzic point out that excessively pushing engagement has some downsides. Two of which are burnout and over-optimism. Sarah summed it up perfectly:

“Your highest engaged people, if they’re not thriving, are also at the highest risk of burnout.

So your best employees, who are the most engaged, who are giving you the most, and giving you the most benefit, are the people at the highest risk, because we’re focusing on the wrong things.”

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#3. The current nature of engagement

During the discussion, Sarah touched on a fact that’s often overlooked: engagement currently is all about business. In other words, when you ask an employee, “Are you engaged at work?” what they hear is, “You’re not doing enough. I want you to do more.” Because that has been the unspoken expectation for a long time, which puts them on the defensive.

“Employee engagement is wonderful. We want engaged employees. But like many things, that’s not the thing we should be chasing, that is an outcome.”

#4. No pause for perks

There’s a frequent complaint among companies that their employees hardly use it despite investing a lot of money and effort in their EVP program. According to Sarah, the reason is simple: people can’t enjoy the perks if they don’t have time.

“People don’t have the time. They’re not given the time. You can be paying millions into your EVP pot every year, and people could say that’s what we want.

It’s quite likely that when you survey them later, it’s not gonna have moved that employee engagement score.”

#5. A narrow definition of EVP

In our conversation with Sarah, we discovered two types of happiness at work: Employee satisfaction, which is what we think, and employee wellbeing, which is what we feel.

Conventional employee value propositions only provide satisfaction, which attracts talent, but it doesn’t help them thrive. When was the last time a snack bar gave you a rush?

This takes us to the next part of our article: how do we change our EVPs to include wellbeing?

Employee Value Proposition: Prioritize employee happiness, not engagement.

From Employee Value Proposition (EVP) to People Value Proposition (PVP)

“I think it’s very, very important for us to think about moving from talking about employees to talking about people.”

So how do we redefine the Employee Value Proposition for a post-pandemic world? Our discussion with Sarah revealed some interesting insights for action.

Step #1. Get the numbers – and the feelings that are driving them

For companies starting an EVP program, an initial survey on what people need serves as a good starting point. However, it’s essential to go beyond the overall percentages.

“My experience from surveys is, don’t just use numbers. Get text as well: ‘thinking’, ‘feeling’.”

With SurveySparrow, you can go a step further and analyze the responses to each question in the survey. For example, with question-level word clouds, you can discover your employees’ most commonly used words from the text questions.

Step #2. Build by trial and error

Regardless of your company size, it’s crucial not to impose change immediately based on the results. Some helpful pointers from Sarah:

Start with an EVP framework. You can map it to your company’s cultural codes for more impact.
Invite your people to be a part of the conversation.
Let them decide what changes they want.
Measure with an omnichannel survey tool. This will help you set benchmarks, and see what has changed for the better or worse.
Stay flexible. We are bad at predicting the future, so the employee value proposition should always be open to change.

Step #3. Make the language more personal

Let’s go back to point 3. As a person, you wouldn’t ask: “Are you engaged at work?” You would ask: “Are you happy at work?” or ‘Do you like your job?”. Businesses are made of people. So why, as businesses, do we talk about “employee engagement” in our EVPs?

“We don’t talk to each other in our personal lives about being ‘engaged’. People talk about love, happiness, feelings, emotions…this is how people talk about people and we need to bring that into work.”

Step #4. Follow up with action

How many times have you heard, “We only work from Mondays to Fridays”? And then find yourself getting work calls on weekends? Unfortunately, this is a familiar experience for many people at work.

“Do your actions match what you’re saying? Because the easiest way to kind of break trust and make people step out is to ask people what they want – then don’t give them any feedback. Or to say one thing and do another.

At home that’s not acceptable, but somehow at work we think it’s okay.”

Step #5. Embody your EVP

When the whole company is in a culture shift, there’s a lot of uncertainty. Here’s where leaders and senior management can guide the way by word and deed. Sarah brings up the concept of “freedom within clear guidelines.”

“Most people when they’re working, especially when they’re working in an environment with people who are more senior than them, and when there’s hierarchy, they need clear guidelines, that explicit permission.

As a leader I would always say if in doubt, tell them again.”

Step #6. Prioritize from a leadership perspective

Leaders tend to lean on people they know can do a good job. But if the reward for hard work is going to be more hard work, then those people will question why they need to sacrifice their time and health to work more.

Here’s where leaders can help their teams prioritize and spread out tasks. Then, their people can get the space and time to connect and find a mutual ground beyond work.

“When you have a really great employee you just go ‘oh I can just give this to them and I don’t have to think about it’. But then again they’re giving more, and they will give more, so that’s one thing.

The second is actually, interestingly, if you give them space to be engaged with their teammates.

One of the ways to build up resilience is social connection. So when you have social connection at work and when you have friendships, those relationships can protect you from burnout.”

Step #7. Make it better

As mentioned in the second step, constant measurement is vital for refining your employee value proposition. But like in the first step, you should also find out the feelings driving the numbers. Again, this is vital for benchmarking.

“So if what you hear in your EVP is ‘9 out of 10 people like this’, and the reason is because they didn’t have it at their old work, that tells you something different than nine out of ten people have it right.

That’s an excellent way to give you your data benchmarks. Then you know the questions to ask, and the direction.”

These steps are not a magic formula for the perfect employee value proposition. But taken together, they will help you put people at the center of your business.

That can only lead to a happier workforce. As Sarah rightly points out, companies focusing on happiness at work are more successful, resilient, and profitable. Check out these four employee value proposition examples to inspire your own change.

Wrapping Up

We’ll close here with a quote by Sarah:

“When you’re spending 60-70% of your day on a workplace, that has a direct correlation on your entire life. When you get home, when you see your husband, your wife, your kids, or even your parents, or your pets, that happiness that you get from your workplace is directly translated to your life.

I genuinely believe that this is a way we can change the world for the better. Because when people leave work having that positive energy, they can take that and give it to the community. So it doesn’t just stop at the workplace; it’s a ripple effect across the world.”

*Note: Quotes have been edited for clarity and length.

Employee Value Proposition: How to Redefine It for the Post-Pandemic Era