Employee Value Proposition is key to stemming the tide of resignations, research says
Australia is on the precipice of The Great Resignation, Dr Ben Hamer, Future of Work Lead at PwC Australia has said, and for sectors such as early childhood education and care (ECEC), where workforce shortages are already being felt, the findings of a recent survey of more than 1,800 Australians will be of increased importance.
What Workers Want: How to win the war on talent is the first Australian study looking into The Great Resignation and what workers want of this scale, and found that 38 per cent of Australian workers are looking to leave their current employer during the next 12 months and 61 per cent who have left an organisation in the past year are looking to leave their current employer in the next 12 months.
Rounded out, this equates to six in ten people, which in a pressed sector such as ECEC could lead to increased pressure on already burnt out teams.
The survey asked employees to rank the aspects that made their job most appealing, with pay and wellbeing coming out on top. Despite the findings, almost half of the employers surveyed said they have no intention in updating their employee value proposition (EVP) to attract the right talent.
Alarmingly, 85 per cent of respondents said they had experienced mental health challenges during the pandemic, and for more than a third, work was the main source of mental health support, making a good workplace fit all the more important.
Why are the findings important?
The Great Resignation, Dr Hamer believes, is likely to be a huge concern for Australian businesses in light of a high number of unfilled vacancies, constraints to skilled migration, and nearly three quarters (73 per cent) of senior leaders expressing difficulties in attracting talent during the pandemic.
These challenges have been felt acutely in the ECEC sector, with a recent survey of members representing over 3,300 sites prepared by Community Early Learning Australia (CELA), Early Learning Association Australia (ELAA) and Community Child Care (CCC) showing that of the 4,500 vacancies advertised in the first six months of 2021 nearly half remain unfilled.
In positive findings, authors learnt that more than half of the respondents planned to stay with their current employer for at least five more years, and that over 70 per cent describe themselves as engaged in their role.
Balance of power shifts to employees
The Great Resignation, experts speculate, will be in full swing by March 2022, driven by market stability, increased consumer confidence, the likely softening of interstate borders, and the usual post-summer holiday recruitment activity.
“The balance of power has shifted from the employer to the employee. Competition for talent will intensify and those that fail to adapt will take a big hit,” Dr Hamer said.
“To protect themselves from the full force of The Great Resignation, and attract the right skills, organisations must identify what their workers really want and reimagine their employee value proposition to deliver on these expectations.”
What workers want…and what leaders think they want
PwC developed an employee preference index with seven employee value proposition (EVP) levers to help leaders organise their thinking and drive effective change:
- Remuneration and rewards
- Workplaces and spaces
- Ways of working
- Career development
Survey participants were asked to rank their preferences based on what they value most from an employer. Remuneration and rewards was ranked the highest at 25 per cent with wellbeing then experience rounding out the top three (22 per cent and 16 per cent respectively).
Continuing down in order of preference were ways of working, career development and workspaces and places, with brand ranked last on the list. However, there is a sizable gap between what workers want and what senior leaders think their people want.
Disconnect between decision makers and employee expectations
“Top executives look at initiatives like on-the-job learning, access to coaching and mentoring, and their commitment to the environment as key attraction levers, when they are actually baseline expectations rather than differentiators,” Dr Hamer explained.
“This disconnect between leaders’ perceptions and workers preferences can have a significant financial impact for employers.”
Misdirection of resources and funding towards benefits that won’t deliver a return on investment is one thing. But worse is the impact on the organisation’s ability to retain and attract top talent in a competitive labour market, as this will get in the way of the post-pandemic recovery and growth agenda that many organisations are driving” he added.
More than a buzzword – employees want benefits
An EVP is more than just a buzzword – it is the balance of tangible and intangible benefits, representing why someone would choose to work at one organisation over another. In tight markets, such as ECEC, this is even more important.
EVPs also change over an employee’s tenure at an organisation – a quarter of workers said the reasons they join an organisation and the reasons they stay are not always the same. This may include someone joining for the pay but staying because of the culture, or joining because of a promotion but staying because of their networks and relationships.
Three clear priorities to determine an attractive EVP
When it comes to what an attractive EVP looks like, the research showed commonalities across cohorts. Digging deeper into the data and looking beyond the seven top-level levers, there were three clear priorities that workers want across all cohorts, ranked in order:
- Working alongside good co-workers
- Work-life balance
The nuances then differ, based on the dominant demographic segments within the workforce. For workforces that are predominantly female, such as ECEC, there is consistent demand for the right culture, wellbeing support and flexible ways of working.
Gen Z ranked work-life balance as the top priority, while Gen X wanted to work alongside good co-workers, and Baby Boomers value superannuation and the location of the office.
The right EVP mix, Dr Hamer said, is not the same for everyone.
“Workers value different things,” he explained. This may be influenced by their culture and upbringing, their stage of life, caring commitments, financial liabilities, socioeconomic status, and a whole range of other factors. Because of this, the EVP for a given employee does not stay the same over the course of their employment either.
Striking the right balance
When it comes to the EVP, remuneration and reward, which includes fixed pay along with other financial incentives such as bonuses and lifestyle benefits, came in at number one. However, more surprising was the rise of wellbeing.
For organisations, the findings indicated the importance of providing employees with choice and control. This also means stewarding a culture and driving behaviours and ways of working that allow remuneration and wellbeing to coexist in a way that works for the employee.
“We know that money talks,” Dr Hamer continued. “It’s time to remind ourselves though of the importance of remuneration and the way in which it is, and always will be, a strong and tangible marker of perceived value and worth.”
“Employees are now expecting more from their employer. They’re expecting financial incentives, ways-of-working, and leaders that prioritise wellbeing.”
This is a unique point in time for employers and employees alike, Dr Hamer said. It represents a massive opportunity for those that redesign their EVP to position themselves as an employer of choice and attract top talent. Organisations failing to do so will compromise their ability to drive post-pandemic recovery and growth.
“Change is happening at the fastest rate in human history. It is also the slowest that we will experience for the rest of our lives. And nothing is changing more than work. The disruption we are seeing in the workplace is not simply a ‘COVID-19 thing’. We are not going back to the way things were. Because the pandemic was not the cause for this disruption. Rather, it just brought to the fore the changes that were already happening and accelerated them,” Dr Hamer concluded.
To view the What Workers Want: How to win the war on talent report, click here.
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