Rethinking the Employee Value Proposition

By Rose O. Sherman, EdD, RN, NEA-BC, FAAN

 

Health Systems are struggling to retain staff. Almost weekly, we learn about new salary packages negotiated across the country as systems struggle with finances and worry about how to pay for the increases. But are increased wages alone ever enough to retain staff? In the January-February issue of the Harvard Business Review, researchers Mark Mortenson and Amy Edmondson contend that focusing on material needs alone is a trap and unlikely to be successful in the long run. They argue for a more holistic way to look at your employee value proposition. They recommend organizations not only look at their material offerings to staff, such as salary and benefits but also less tangible things that can bring even more value, such as opportunities for growth and development, the establishment of connection and community, and a reconnection to meaning and purpose. These four interrelated factors are needed for retention success.

The authors break down each of the categories:

Material Offerings – are salary, benefits, schedule flexibility, and other tangible perks that come with the job.

Opportunities to Learn and Grow – are all the ways staff can upskill themselves and the career coaching they receive.

Connection and Community – are the benefits that staff receive from being part of a team, such as a sense of inclusion, recognition for strengths, mutual accountability, and social relationships.

Meaning and Purpose – is congruence with the organization’s values and mission and a sense of mission larger than oneself.

The authors explain that some factors, such as material offerings, are more short-term in value versus the opportunities to learn and grow, which are seen as more long-term benefits.  The authors observe that the bonds between staff and employers are now very fragile. Focusing exclusively on salary as an example, rarely works as a long-term strategy.

The researchers warn that some organizations might think their meaning and purpose are clear to staff, but the absence of trust or the existence of a toxic culture can easily shatter even the strongest mission. Many leaders may think their organization promotes learning and career advancement, but staff may not see it that way. I was struck by Deloitte Healthcare Recruitment and Retention Research, where 33% of those surveyed believe that advancement is not possible in their organization, and 42% indicated that career advancement was very hard and not encouraged.

Based on the more than 150 recruitment and retention workshops I have done over the past two years, the model proposed by Mortenson and Edmondson makes sense. Long-term retention is more nuanced than the hourly wage, despite what some leaders may believe. All four dimensions of the employee value proposition must be considered to develop a comprehensive plan.

Read to Lead

Mortenson, M. & Edmondson, A.C.  (January-February 2023) Rethink your employee value proposition: Offer your people more than flexibility. The Harvard Business Review.