EVPs define the deal at work

• Employee Value Propositions (EVPs)

have become a common part of
organizations’ talent acquisition and
retention strategies.

Purpose
• EVPs define what an organization
offers to employees (e.g., pay,
benefits) in exchange for what
employees are expected to offers to
Careers Well-being
the organization (e.g., effort, skills).

• For EVPs to be compelling, they must

be aligned with employees’
Compensation Flexibility Benefits expectations.
Culture

3
A mismatch in expectations perhaps?

4
Engagement isn’t the problem right now
Client case study
percent agreeing over time

88
Mercer global norms
Percent favorable levels with
comparison to pre-pandemic results
82 86
Pride 82
Motivation 82 81
78 Percent Change
Favorable Over Time
76
Pride 84% 0
Advocacy
74
Motivation 83% 0

70 Advocacy 78% +1
Commitment 67
67
Overall
77% +1
Satisfaction

Commitment 71% +1
2019 2020 2021

5
 Employees are coping with a host of new stressors
Considering the circumstances, I feel reasonably balanced
• Working parents are losing 2 days of
productivity a week due to child care and and healthy right now.
stress

3.81
• Loneliness is on the rise, particularly for 3.78
isolated individuals quarantining alone 3.75
3.74 3.71 Male Employees
3.69
3.67 3.66 Male Managers
• Generation Z employees are worried about 3.63 3.63 Female Employees
the future of their jobs and their careers 3.6

• Baby Boomers are concerned about their

physical health and financial wellbeing
3.42 Female Managers

• Many female managers are experiencing a

double-double shift, resulting in higher
levels of cumulative stress
Five point scale ranging from Strongly Agree (5) to Strongly Disagree (1)

June July August

See https://www.mercer.com/our-thinking/career/preparing-for-a-more-flexible-future.html 6
And are seeking a new work experience

Loyalty contract ENGAGEMENT LIFESTYLE contract

(20th century) contract (pre-pandemic) (The new chapter)

Basic needs Psychological needs Well-being needs

• Pay, benefits, security • Achievement, • Physical, mental,
camaraderie, equity emotional, financial
• Retention
• Contribution • Sustainability
• Pay and benefits in
exchange for • Intrinsic rewards in • Healthy experiences in
commitment exchange for effort exchange for sustainable
performance

7
Leading organizations come off mute

They stand up for what they value

and deliver on Good Work standards

believe investing in good work standards are making good work

will deliver the greatest ROI standards a priority

Which Good Work standards are you acting on?

1. Fair pay & 2. Flexibility & 3. Health & 4. Diversity, equity 5. Employability &
social integrity protection well-being and inclusion learning culture
• Fair pay is the top • Flex is the most • 97% of HR leaders • 1 in 3 executives • HR leaders who
HR initiative to critical sustainable plan to promote has DEI tied to their expect their
protect financial workforce practice long-term employee own performance employees to be
welfare of for large companies well-being ratings this year highly energized
employees this year spent
• But only 26% are • But only 36% are • Just 28% of
62% more on
• But only 28% are looking at job introducing a companies have a
reskilling last year
looking at internal- security for gig mental or emotional DEI strategy
external equity this workers well-being • Older workers are
year strategy most concerned about
employability

© 2022 Mercer LLC, All Rights Reserved. The future of work is here | Mercer 8
Executives are concerned about continued remote working, but
employees see things differently
Executives are concerned
Believe they have an apprenticeship culture where
people learn working side-by-side, not remotely
Employees see things differently
Believe their organization will be more successful
with remote/hybrid working

Concerned about the ability of employees to build solid Believe their team collaborates well while some
interpersonal relationships with colleagues/leadership people are on-site and others are remote

Concerned with the potential deterioration of Feel more connected to their coworkers when
culture working remotely

What’s worked well so far:

Offering flexible Offering tools / Creating a safe

work / collaboration platforms to support environment to
training emotional and share concerns
mental well-being

© 2022 Mercer LLC, All Rights Reserved. 9

10
Reframing work-life integration in the new world of work
Energized employees are significantly more likely to say they can integrate their work and personal lives
Less energized employees are less satisfied and less motivated but more likely to stay

Energy amplifier Energy diminisher

Individual • Feeling you can always bring their authentic self • Feeling replaceable by AI (10%* vs. 46%)
to work (83%* vs. 49%) • Not offering remote/hybrid working
• Feeling financially secure today (83%* vs. 68%) especially for Gen Z (54%* vs. 66%)

Business • When pay/promotion decisions are made fairly, • Lack of diversity (9%* vs. 20%)
area/team equitably, and without bias (82%* vs. 55%) • Lack of clarity on career opportunities
• Managers who understand individuals’ skills (17%* vs. 47%)
and interests (85%* vs. 64%)

Strategy/ • Top leadership team where women and • Slow moving culture (24%* vs. 29%)
governance minority groups are well-represented • Not being rewarded for acquiring
(83%* vs. 66%) new skills (21%* vs. 25%)
• Executive team that prioritizes
sustainability strategies and goals
(86%* vs. 59%)

© 2022 Mercer LLC, All Rights Reserved. *For energized employees 11

Is the rewards experience is ready for reinvention too?

Unhappy employees Lack of outcomes Global disruption

Only 55% believe they are fairly Time intensive merit processes have Economic impact of COVID will
compensated and 50% believe not effectively paid for performance tighten budgets, amidst heightened
better performance drives better nor made progress on awareness on systemic pay
pay* competitiveness or equity inequities

12
*Source: Mercer Employee Research Normative Database
 The Annual Pay Raise experience – the Highs and Lows of the Employee

Coworker resigned Under resourced– Performance

EVENT

Record financial Merit Award –

– and got an offer pulling late nights review – I’ve had a
performance! 4%
with a 20% trying to keep up! great year!
increase!
FEELINGS
& NEEDS

Excited Disappointed Stressed Accomplished Disappointed

Anticipation Curious Frustrated Hopeful Confused
#@$!#!!!

13
 And the Highs and Lows of the Manager

My team is poached Allocating awards - Employee

Record financial Compensation budget
EVENT

performance! Good - for 20% more pay - same as last year?!

So much time and conversations –
energy... disappointment, blame
news for budgets!
the budget! OR HR!
FEELINGS
& NEEDS

Excited Disappointed Surprised Exhausted Relieved

Anticipation Stressed Confused Dread Anxious

14
Are we trying to address too many things with our merit increase?

MA RKET
C O MPETITIVENESS

PAY E Q U IT Y
6%
PAY F O R
PER F O RMANCE

15
How can you improve the experience given the current environment?

Proactively
Strategically
manage Rethink pay for Increase Pay
budget salary
competitiveness performance Transparency
increases
and equity

16
Strategically Budget Salary Increases

W H AT ’ S Setting budgets based

HAPPENING solely on what others are
T O D AY doing

W H AT Strategic planning process for long-

SHOULD BE term multi-million dollar investment
HAPPENING based on your talent strategy

17
Proactively manage pay equity and competitiveness

MANAGER
DISCRETION
PAY EQUITY STUDY

MARKET

(FUTURE)
BUSINESS X%
PERFORMANCE BUDGET

EQ UIT Y

COMPETITIVE
ANALYSIS

PERFO RMAN C E

18
Rethink pay for performance

AN N U AL P AY P AY F O R
I N C R E AS E P E R F O R M AN C E

M AR K E T
COMPETITIVENESS C AR E E R G R O W T H

P AY E Q U I T Y I N C E N T I V E P AY

EMPLOYEE SKILLS RECOGNITION

19
Work on Pay Transparency

M O S T P E O P L E D O N O T K N O W H O W T H E Y A R E PA I D

69% 5x People who are

actually paid
above market
believe they’re paid:
35%

Below market
45%

At Market
21%

Above Market

People who are

69% OF EMPLOYEE’S actually paid 64% 30% 6%
at market believe
E M P L O Y E E S S AY PERCEPTION OF they’re paid:
PAY PAY I S 5 X M O R E Below market At Market Above
Market
T R A N S PA R E N C Y I M PA C T F U L O N
I S I M P O R TA N T ENGAGEMENT People who are
TO THEM THAN HOW THEY actually paid
83% 14%
below market 3%
A R E A C T U A L LY believe they’re paid:
PA I D R E L AT I V E T O Below market At Above
MARKET Market Market

Source: Mercer Global Talent Trends Source: PayScale Research

20
What else makes people stay?
GENDER GENERATION LEVEL

Individual All managerial

Male Female Gen Y Gen X Baby Boomer
contributor levels

Job Job Job

security security security
Interesting/ Interesting/ Interesting/
varied work Health benefits varied work Health benefits varied work Health benefits

Meaningful Flexible Meaningful Flexible Meaningful Flexible

work hours work hours work hours

Competitive Convenient Competitive Convenient Competitive Convenient

pay location pay location pay location

Fun work Fun work Fun work

environment Time off environment Time off environment Time off

Advancement Professional Advancement Professional Advancement Professional

opportunities development opportunities development opportunities development

21
Eight emerging EVP trends
making it PERSONAL
Use of choice in rewards
Tech media company providing more
choice in compensation – allowing
employees the option to choose the
amount of salary they want to receive
in equity
culture of CARE
Health Centric Culture
Auto company Recruited a Chief
Medical Officer to create a sustainable
culture of health. Various health tools
are offered, including biometrics,
personal health reviews and family
health centers.
focus on FUTURE
Digital career exploration
Software company providing
employees with a digital platform for
exploring career paths and identifying
jobs that match their skills and
interests
ENGAGING experiences
Experiences for Recognition
Tech company utilizes Blueboard to
recognize employees with curated
experiences such as sky diving,
cooking classes or weekend getaways
INCLUSIVE benefits
Enhanced reproductive benefits
Financial services company providing
fertility and surrogacy benefits to
enhance access of reproductive
benefits to same sex couples
making it EASY
Finances at your fingertips
Retailer employees can get access to
an app (called Even) which allows
them to cash out early on a paycheck
and access financial budgeting tools
more TRANSPARENCY
Radical transparency
Social media company publishes a
salary calculator on its website for
employees and candidates to access
focus on FAMILY
Parental leave for all
Online retailer provides employees not
only with a generous time off, but a
ramp back program as well as a leave
share program to pay for a spouse
without paid leave
22
Remember…..best fit not best practice!

23
What are the SALARY INCREASES
in 2022 & 2023?
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• •
• •
TW
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