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Last week, we were delighted to speak at the Third Sector’s Breakfast Briefing that focused on the recruitment and retention difficulties facing the sector.

The briefing was an excellent opportunity to discuss what some might call the talent crisis within the sector and the tools available that can improve each charity’s access to talent and secure their long-term success.

Our contribution to the conversation centered on the importance of reward in the employee value proposition (EVP). We surveyed third sector employers, of which 72 per cent had experienced recruitment difficulties over the last 12 months, whilst 56 per cent have experienced retention issues in the last 12 months. Here we outline how the sector can utilize their EVP to help them find the people to match their charity’s goals and values and maintain the momentum behind engagement.

The Employee Value Proposition

The employee value proposition is one of the best tools available to companies to engage employees, as well as attract and retain top talent. It encompasses:

  • Career – the promise of job security and progression
  • Work environment – the promise of positive work conditions with a sense of personal achievement, recognition and a healthy work-life balance
  • Culture – an inclusive culture with a sense of social responsibility, team spirit and unity behind the company’s vision and values
  • Compensation and benefits – the importance of fair pay and bonus packages alongside the increasing importance of non-financial benefits

Getting the balance right

Our key message was the importance of getting this mix right. According to Charles Cotton, senior reward and performance adviser at the CIPD, "employers need to become more savvy with both financial and non-financial reward to attract, retain and motivate people.” This extends to not only analysing the suitability of rewards on offer, but also communication and delivery of the offer itself.

How to get your EVP right in 5 steps

Whilst evidence shows that the non-financial elements of the EVP (career, work environment, culture) have increased in importance, setting aside volunteers, most people won’t do a job without the reward element. Drawing on our own experience, we have highlighted five steps third sector employers should take to get this part of the EVP right.

1

Benchmark against the wider market to remain competitive

Looking to the external market is vital to informing your decision making, to ensure you are paying competitively. Consider what your external market looks like; who do you want to compare with? Data from the autumn 2018 edition of the Paydata UK Reward Management Survey, found the most common predicted pay budget for 2019 in the general market is up to three per cent, whilst for the third sector, the most common is up to two per cent. Whilst 68 per cent of pay increases are driven by external relativities, affordability and keeping within constrained budgets is a key theme within this sector.

2

Promote internal transparency and consistency to uphold fair pay

In contrast, 45 per cent of pay increases are driven by internal relativities (UK Reward Management Survey, autumn 2018). By ensuring that equal pay and transparent pay structures are in place, organisations can make consistent reward decisions. Parity of pay, where jobs are paid equivalently if they involve the same skills or effort but may have different job titles, ensures that everyone in the organisation feels that they are being appropriately rewarded for their work.

An objective framework avoids discretionary increases where some managers may be more generous than others or better at having performance management discussions that feed into the reward decisions being made. 56 per cent of third sector employers have had to offer new recruits salaries that conflict with those paid to existing employees. A framework with which to base these decisions ensures fairness and equal opportunities for all.

3

Review the total reward package holistically

There is a renewed impetus on reviewing the package on offer more frequently – 83 per cent of third sector employers expect to review their benefits offering this year. Benefits packages can be viewed much like buying a car – what was once considered an optional extra, such as electric windows and air conditioning, are now expected as standard. In much the same way, it is critical employers tune into and engage employees to ensure the package remains competitive and aligned to what staff value. Employers can offer choice, which allows employees to tailor their package, whilst meeting the needs of a multi-generational workforce.

4

Communicate the total reward package

Effective communication is essential to reinforce the value of the package and increase the take-up of benefits on offer. Total Reward Statements are a great, cost effective way to reinforce the EVP and maximise engagement. Meanwhile, benefits roadshows and drop-in sessions can all support employees in raising awareness and making the most of the rewards on offer. A targeted communication strategy should be developed both for existing employees, but also as part of the recruitment and selection process. In many organisations, close collaboration with marketing can advertise the reward package as part of your organisation’s EVP. Marketing yourself effectively as an employer is a key recruitment driver.

5

Keep innovating

It is only natural that employee reward schemes will get tired over time; keep innovating to keep it fresh. Through regular reviews and remaining responsive to what employee’s value, your EVP can remain competitive to attract and motivate. Gathering feedback directly from your people through focus groups and surveys can in itself make their contribution feel valued and directly shape an effective rewards package. This feedback can also relate to the wider EVP elements – ensuring that compensation and benefits works hand in hand with an organisation’s culture, career and work environment.

With the uncertainty of Brexit threatening to exacerbate the existing skills shortage across the UK, a strong employee value proposition is a critical tool that employers can use to both attract and retain a talent pipeline. This can ensure employers increase the longevity of key roles that can help charities achieve their long-term goals and vision.


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