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an employee the same way a consumer

brand builds loyalty to a product.

(Towers Watson 2007/2008

Communication ROI Study Report)

2011 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.

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While the recession is over in many countries, its impact

Following the global financial crisisand recession that occurred in manycountr es, we may e at a po nt o

inflection China, India and Brazil are

experiencing strong economic growth

Spain and Ireland continue to sufferthrough economic contraction anddouble digit unemployment

U.S., most of Europe, Canada andJapan are somewhere in between

Most regions took cost-cutting andcost management actions as areaction to the recession

Real wages have been flat ordeclining


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Recession forced companies out of business as usual

Companies:

Reduced labor costs throu h hirin and

Employees are

Thankful to have a ob in li htsalary freezes, reduced bonuses and

layoffs

Over 44% of companies globally took four ormore cost cutting actions

of past layoffs

Recovering from no pay increase,no/smaller bonus, reduced benefits and

Resulted in reduced rate of increase in thereal value of total rewards

Re-evaluating business strategies to

Less likely to have promotionopportunities

Survivors who have made it through in

gainsone piecebarely

Theme of Renewal Theme of Security

Looking forward, organizations mustrethink the way they design and manage

their reward and talent programs

Employees are looking for job security,stability and opportunities to earn higher

levels of pay (which may be unavailable incurrent organization)


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Companies recognize the impact of cost cutting

Employers recognize some of theadverse impacts cost cutting has had

Impact of Cost-cutting Actions Taken

on employee well-being andengagement

The more cost-cutting actions,

they are to recognize the impact

TW research has shown thatdeclines in em lo ee en a ementoften have an adverse businessimpact

Employers are less likely to identify

mpac on qua y, cus omer serv ce oremployee productivity


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Create a sustainable Employee Value Proposition to

,

What is sustainability?

scalable in a downturnFlexible in terms of company investment in rewards and talent management

programs

Addresses the broad range of elements of the deal that are important toemployees

Allows for flexibility to target key employee groups such as high performers,critical-skill employees and high potentials

The need to refocus ives ou a chance to renew and communicate

your EVP to both current and prospective employees


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What is an Employee Value Proposition (EVP)?

An employee value proposition is the experience offered by an employern exc ange or e pro uc v y an per ormance o an emp oyee.

Employee Perspective Employer Perspective

Em lo ees connection with the EVP A strate icall desi ned EVP attractsdetermines their level of discretionary effortin bringing the company mission, vision and

values to life.

retains, engages and motivatesemployees to drive business success.

Ultimately it comes down to the give and the get


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Defining key terms

An employee value proposition (EVP) is what is offered by an employer in exchange for the productivity andperformance of an employee. It includes the entire employee experience from their rewards and benefits, to the

EVP

opportunity for career development and also the more intrinsic elements of management style, work environment and

culture. Branding the EVP means how you interpret all these elements into an identity that links your employment brandto the corporate brand.

This is how you present yourself to prospective employees. In order to keep the people you recruit, it must be alignedwith the EVP (or employment brand) as well as your corporate brand. While its OK for brands to be aspirational, they

must be grounded in authenticity, and your communication strategy should clarify how you intend to move from aspirationto reality.

This is who you are to your customers. Like any brand, it needs to be rooted in reality yet it can have someas irational attributes. It has both ractical and emotional elements: If a cor orate brand and EVP are misali ned the

Corporate Brand

result can be employee cynicism which directly impacts productivity.

Total Rewards


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.and benefits.

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Opportunity exists to formalize the EVP

While all organizations have an informal value proposition, only one-

The other two-thirds indicate their EVP is implicit and has evolved over time There is significant regional variation regarding formalization of EVP

,formalize and communicate to employees (and prospective employees)

High-performing organizations are more likely to have a formal EVP


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Employees want to see the total deal as they seek to find

,

How (and why) does the business deliver value?

What do the mission, visions and values represent, and am Icommitted to them?

and Values

What behaviors are rewarded and recognized, and do theyadvance the promise to the market?

Do I know how my job and actions contribute to success?Rewards

recognition

How does the organization support me and my family throughbenefits and programs?

and opportuni ty

a are e cu ure an env ronmen e

Will the management structure and philosophy support myability to do good work?

Do I have access to people, processes, tools and technology

The work, the

people and the

environment


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Attraction drivers are shifting due to the current

Employers recognize the importance of base pay, challenging work and careeradvancement opportunities in attracting employees to their firm

Employers have not made the connection between employee well-being (e.g.,flexible scheduling, time off) and an employees decision to join an organization


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Objectives for formalizing the EVP vary by region

The majority of organizations indicate they have formalized their EVP toimprove alignment of HR process with business objectives, brand and eachother

Better alignment of EVP and the brand can lead to improved line of sight,encouraging employees to adapt behaviors that will deliver the brand promise

or examp e, super or customer serv ceObjectives for Formalizing the EVP


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Brand alignment: Why its important (and why it s often

Peo le Re utation

Marketing doesnt control:

Em lo ees understandin of the brand

(employee experience)

Human Resources doesnt control:

Com an re utation

(customer experience)

Employees living of the brand

Employees delivering on the brand promise

External perceptions and image

Value of the external brand

Yet

Brand and com an re utation are People are the key factor in delivering the

key factors in attracting and retaining talent brands promise to customers

Effective brand alignment requires Human Resources and Marketing to work together to develop

a fully integrated and aligned employee and customer experience


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Companies with formal EVPs are more likely to say their

The EVP is a powerful management tool when it is communicated effectively

,stable, unifying experience

This sets a foundation for modifying the EVP by location and/or employee segment


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Alignment of Internal and External Experience

Good

Customer Experience

PerformerTypical12%39%

Brand promise delivered

Consistent communication

Excellent customer experience

aggar yop c

31%18%

Employee Experience

GoodPoor


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stands forTowers Watson Brand Alignment Study, 2008.

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Talent and Rewards: Complete solutions through a


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Getting started Project roadmap

Plan

EVP Gap

Build

Implement

EVP and

Improve

Definition Analysis Management

Key

Workforce strategy

Research

Gaps andrecommendations

Final framework

Im lementation

EVP and brandmanagement

Areas Competitor scan

Segmentation

Framework andstraw model

Priorities

plan

Creative

articulation anda roach Brand

Ongoing roles

Metrics

oc a za on anapprovals


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Nestl

Real

Possibilities.Real

People.


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A case study in the retail industry

The Company

This organization is its countrys top retailer, with nearly 50,000 employees in more than 1,000 stores

,from a specific segment for which aggressive organic growth is planned

Additional growth is planned through a new line, as well

Each store is owned by an individual

The Business Challenge

The organization developed an EVP to communicate the deal in a compelling way so that new and

prospective professional employees could quickly see and understand the value of working in its

Rapid growth and expansion of stores create a challenge because legally, a store cannot openwithout a licensed professional on staff

Store/Associate owners must be licensed professionals intensifying the challenges associated with,

A global shortage of this type of professional has increased the competitiveness of the market, so theorganization needed to differentiate itself by developing a compelling attraction and retention strategy

The organization engaged Towers Watson to create differentiated employee value propositions forcritical staff ositions


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Attracting and retaining top talent was critical to deliver business results

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A case study in the retail industry

The Solution

A five-step methodology was followed to synthesize company and industry research to developse mented value ro ositions

1. A series of interviews and focus groups with internal and external licensed professionals provided

key insights into what employees need and want from an employer in exchange for their skills andtime

.to ensure that the EVP resonated with employees in the stakeholder groups

3. Once the value propositions were validated, focus turned to preparing and delivering acommunication plan and implementation road map

. , ,quick wins identified for action

5. Branded leadership tools and manager toolkits were used to cascade the message

Measuring Resul ts in Year One:

Customer satisfaction

Vacancy rates

Professional turnover rates


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Online applications for employment

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Summing up Best practices for best results

What is needed to be successful

, ,

Ensure quantitative and qualitative data is collected and shared Spend time with stakeholders up front to build awareness of employment

brandin and EVPs

A multi-skilled, multi-generational project team: HR, finance, IT,communication, business unit, students, new hires, tenured employee

Earl ado tion b leadershi to chan e behaviors and model EVPexpectations

Targeted leadership training recommended

A rigorous change management approach

Actively involve and engage stakeholders throughout the process Measure and test throughout the process demonstrate ROI

Maintain momentum once stakeholders are engaged. Avoid lengthy delays


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between milestones

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Questions?

[email protected]

. .


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Society for Human Resource Management webcast

April 26, 2011

Why an Employee Value Proposition Matters:

Creating Alignment, Engagement and Stronger Business ResultsKathryn Yates

Global Practice Leader

Laura Sejen

Global Practice Director

2011 Towers Watson. All rights reserved.

Communication and Change Management Rewards

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