Employment Relationships 2.0

Think your credit union doesn’t have an employee value proposition? Think again. “Every company has a value proposition,” says Thomas O. Davenport, senior consultant in the San Francisco office of Stamford, Conn.-based Towers Watson. The question, he says, is whether that EVP was deliberately formulated, or if the company simply allowed it to develop without conscious direction.

The employer-employee relationship is a partnership. There is an arrangement between workers and the organizations that employ them, and Mark Arnold, president of consulting firm On the Mark Strategies, Carrollton, Texas, says that an EVP expands on that. “It’s about why employees should invest in you as an employer,” he explains.

But it doesn’t stop there. “The second part is, ‘As an employee, what can I do for your CU to really match your brand?’” He likens it to the value proposition CUs have for their members, and says the two shouldn’t exist in separate worlds. “Those should be intertwined and interrelated together. Your employees can’t live the brand if they’re not really jazzed up about being an employee of your CU. That’s where the EVP comes in.”

Andy Janning, SPHR, president and founder of NO NET Solutions in Brownsburg, Ind., sums up the purpose of an EVP: “What is the employee going to get from the organization in return for that employee making a meaningful contribution to the company?” he asks.

An EVP gives the organization a way to go beyond the basics of that work-for-pay arrangement. “Credit unions can say, ‘We want to show you how you fit into our mission. We’re going to show you what difference you make in the lives of our members.’” CUs can use their EVP to demonstrate to employees how their opportunities will extend beyond simply being paid, into the realm where they can actually make a difference.

Elements of an EVP

Chicago-based Alliant Credit Union developed a formal EVP a decade ago, when the company diversified its field of membership and had an opportunity to re-examine its strategy. CUES member David Mooney, president/CEO of the $8.2 billion/280,000-member organization, says the team wanted to create a platform for its 360 employees that was similar to what a consumer value proposition does for consumers. “It’s answering the question, ‘Why should I work for Alliant?’” he explains.

The result was a set of elements that Mooney says characterizes the CU’s employment offering. “It’s the features of the organization that attract and retain and engage employees.” Five core principles make up the Alliance CU EVP, with each speaking to a different facet of the employment relationship. The principles are:

• the CU’s compelling mission;
• positive culture and values;
• growth and development opportunities;
• the CU’s strength and stability; andrewards.

Some of the elements, such as financial rewards and growth and development, focus on the employees’ perspective. Others—positive company values and culture, overall strategy, and financial strength and stability of the organization—shine a spotlight on how the CU conducts itself.

Most EVPs share some common elements. Financial incentives, from salaries to healthcare coverage, is one. Credit unions will often outline their desire to provide compensation that places them in line with area competitors, and may also sketch out what sort of benefits they want to provide for their employees.

Nonfinancial rewards is another recurring theme, which often includes learning and development opportunities. “Things like a chance to grow on the job and build my resume,” explains Davenport. Corporate goals may also be incorporated in one or more elements, giving existing and prospective employees a vision of what the CU wants to achieve and how it plans to go about tackling its mission.

How (and Why) to Develop a Good EVP

If every organization inherently has an EVP, whether formalized or not, what’s the benefit to creating one deliberately? Davenport says there’s a distinct advantage in taking control of the process. “If you don’t take that step of formalization, then you miss the opportunity to really get the most out of the value you’re delivering,” he explains. “It’s like having a great consumer product but you never really describe it. You don’t tell people how great it is.”

In addition, an EVP “makes it possible for an employee to say, ‘OK, this whole thing is clear to me. This is what I get for coming to work here. This is what I can expect from my investment,’” Davenport explains. By presenting existing and prospective employees with a defined EVP, the risk of incorrect assumptions is minimized, and your CU’s competitive advantage as an employer is evident and distinct.

A good EVP will also help to differentiate your CU. “It’s going to say why this employer is different than some of the other banks or other organizations out there that employees could work for,” Arnold explains. Money isn’t the only thing on an employee’s mind when weighing competing job offers, and an EVP can help turn the tide in your CU’s favor.

There’s also the increased opportunity to really drive your CU’s mission home with employees by crafting an EVP that resonates deeply with their own goals and objectives. Top-level strategies may not speak directly to employees as they go about their day-to-day tasks, but an EVP has the potential to do just that. “It’s got to connect on their level,” Arnold says.

The elements of a strong EVP aren’t handed down from on high, and its development must revolve around an authentic desire to create a platform that benefits the CU as well as its employees. “I think the organization has to really ask, ‘Why are we doing this?’” Janning says.

A CU must be up to the task of ensuring the EVP will remain relevant, that it won’t become buried “when the business plan starts to rear its ugly head,” as Janning puts it, and that it will be supported by all levels of leadership. “If it’s not something that will be reported on, discussed, dissected, and celebrated at the highest levels, then no planning in the world is going to overcome that,” he says.

When developing an EVP, Mooney says it’s important to remember that it isn’t a copywriting exercise. “To some extent, you are what you are,” he explains. Your CU’s culture, for example, is not easily changed, and it will simply be what it is. “Part of developing the EVP is just assessing why you’re here,” Mooney says.

His team partnered with Gallup and started the process by working to understand what elements of a potential EVP existing employees saw within the CU and how they felt about them. “We interviewed a lot of employees at all levels, including long-time employees and new employees, to try to understand what their perceptions were and what their experience was,” Mooney explains.

They asked employees what attracted them to Alliant CU, what they liked about working for the CU, and how they felt their daily work experience supported the organization’s mission and values. That information was then boiled down into a core group of common themes. “There was a pretty broad consensus,” Mooney says. “We selected common elements we thought were the most compelling and distinctive, and that were genuine and consistent with our culture.”

Davenport encourages CUs to follow the lead of consumer products companies, and start by considering internal customers. “First of all, understand what talent you need. What kind of people have to be in your organization for you to be successful?” From there, CUs should research what their employee population is looking for out of the work experience. That data will tell you if your existing reward portfolio—not just pay but other tangible and intangible perks employees get as part of the job—is the best structure or if it should be modified.

“At that point, you can have confidence that your value proposition will actually make sense and be appealing to the employee marketplace you want to hire and retain,” Davenport says.

Benefits and Risks of an EVP

Thoughtfully crafted EVPs bring a number of benefits. From the outset, they provide everyone in the organization with a set of standards for short- and long-term endeavors. “For leadership throughout the organization, it gives a definition of the kind of environment we want to create,” Mooney says of Alliant CU’s EVP. Strategic activities, such as financial and employment planning, are able to leverage the same foundation and strive for the same objectives. If an element of the EVP says the CU pays in the top third of comparable financial service companies, for example, that helps to chart the course. “It creates clarity for leaders and managers around what we need to do to fulfill that proposition,” Mooney explains.

Before your CU gets too wrapped up in looking for success derived from its EVP, Janning says it’s not a platform that lends itself to benchmarking. Instead, an EVP that is an authentic part of the organization’s culture is part of a larger initiative that signals the CU has invested in its employees. The positive effects will appear in other forms, from increased employee engagement to being named one of the best places to work.

“Can I say those are directly from the EVP? No,” Janning explains. But he says organizations with those types of environments—where employees feel their work matters, where people want to come in every Monday morning—usually have an EVP or something similar in place.

Unfortunately, pitfalls abound if the EVP isn’t developed or implemented well. “The biggest downside is going to be cynicism,” Arnold says. “You put it out there, and then if you don’t live it, guess what? All your employees are going to become cynical.” Another related concern is where that cynicism will lead, such as when key employees look for opportunities elsewhere when they realize it was all just talk. At the very least, failing to meet the expectations set in the EVP will almost certainly result in a lack of connection with employees.

Mooney stresses the EVP must be genuine and authentic, and it can’t be treated like a tagline. “It actually has to represent the employee experience,” he says. “You can spend time crafting something that sounds wonderful for the annual report or for posting on your website, but at the end of the day, if you aren’t supporting it—if it isn’t real—it’s going to fail.” Mooney believes employees’ frustration and disappointment could very well lead to high turnover and even a bad reputation in the employment market. “You have to be prepared to deliver on what you determine you want to be,” he says.

In the end, much of an EVP’s success comes down to not just what’s on paper, but how it’s lived every day. “The worst thing you want to do is overpromise and under deliver,” Davenport says. His team urges organizations to design their EVP carefully and to do the research that’s necessary, because workers will know the difference. Simply trying to convince people your CU is great won’t go very far. “With all the information available through the Internet and other sources, we know what competitors are doing,” Davenport says. “We know what’s out there in the marketplace.” Only by delivering on what your EVP promises will you convince your audience that your CU is where they want to work.

Julie Knudson is a freelance writer and owner of Olympic Bay Media, Inc., Arlington, Wash.