Deciphering the Employee Value Proposition (EVP): A Conjoint Analysis Approach to Strategic EVP Development

Abstract

Attracting and retaining talent is an ever-present challenge for many companies, especially when they have an unclear employee value proposition (EVP). An EVP is the reciprocal relationship between an organization and its employees, encompassing both tangible and intangible benefits. The ability to communicate a clear and consistent EVP allows organizations to set themselves apart to attract and retain employees whose values match their own. Knowing this, a large, manufacturing company revamped their EVP survey last year to include questions on material offerings, growth and development, connection and community, and meaning and purpose, as well as utilize a traditional marketing methodology: conjoint analysis. This study (N = 4,315) asked global employees to select which job they would prefer, presented across a series of six items that varied on six factors: workload density, the compensation and benefits package, location/schedule flexibility, career growth, sense of belonging, and social and environmental sustainability. Conjoint analysis was employed to identify how employees in different regions weigh the factors and the trade-offs employees are willing to make among different job factors. Key findings revealed regional differences in job factor weightings, with compensation and benefits being the most important factor across all regions. However, factors such as flexibility, career growth, and social and environmental sustainability also played significant roles. Understanding these nuanced distinctions can inform how organizations attract and retain employees by tailoring job descriptions and recruitment efforts to emphasize the most valued factors.

Deciphering The Employee Value Proposition (EVP): A Conjoint Analysis Approach to Strategic EVP Development

An organization’s employee value proposition (EVP) can be described as the “symbiotic, reciprocal relationship between the organization and the employee…(and) the portfolio of tangible and intangible offerings an organization provides to employees in exchange for their job performance” (Shepherd, 2014, p.581). These offerings encompass foundational gains such as benefits and compensation, but also more intangible perks of working for the company like its mission, social purpose, career growth opportunities, and work–life balance. 

Employers have been facing a 53-year low in unemployment and historically one of the most challenging staffing environments (Neufeld, 2023). This means an organization must have a strong EVP to attract and retain talent. Now, individuals have more options than ever in selecting an employer and what was previously a sole focus on the economic and physical security a company can provide has shifted to an emphasis on quality of life and belongingness. The ability to communicate a clear and consistent EVP allows organizations to set themselves apart to attract and retain employees whose values match their own. However, an organization’s EVP may not be immediately apparent, especially within large companies that offer several unique benefits to thousands of global employees of all ages. 

Reassessing the EVP

The organization that was the focus of this study conducted an EVP survey in 2019 with most items focused on compensation and benefits. Employees were asked to categorize benefits by importance and to rate how well those benefits met their needs. Structuring the survey in this way allowed us to identify gaps and prioritize resource choices, which resulted in changes to US medical benefits and career development programming.  

In 2023, several enhancements were built into the survey design, methodology, and analyses. Survey design was updated utilizing research by Mortensen and Edmondson (2023) and included questions addressing four key pillars of employee experience: (a) material offerings, (b) growth and development, (c) connection and community, and (d) meaning and purpose. This made the survey more comprehensive in the information collected. The analytical enhancements included creating a section of the survey (limited to salaried staff) that applied a common marketing analytical approach, conjoint analysis.

Baker (2000) identified one of the major components of a marketing strategy is to create an effective marketing mix to attract and retain customers. If we think of employees and job candidates as customers, then we can apply this concept to human resources. Shepherd (2024) recommends EVP research to be informed and guided by the field of marketing, and by applying conjoint analysis, we can use the results of our EVP research to inform more than just current employee experience but also design an employee value proposition that will appeal to applicants seeking a job. 

Conjoint Analysis

Conjoint analysis is often used in market research to identify customer preferences and determine the tradeoffs they would make to purchase a product. The best way to explain conjoint analysis is through an example: Imagine you are buying a laptop and are considering the options presented in Figure 1 below. When evaluating which laptop to buy, you simultaneously have to balance varying information about the specifications of each. Do you care about the brand more than the monitor size? What about the RAM size over the cost? By presenting consumers with several items that slightly vary the options presented below, the conjoint analysis is able to detect patterns in their decision making to see if they more often sacrifice RAM for the brand or monitor size for cost, for example. 

Figure 1: Conjoint Analysis Example (Adrian, 2019)

Although the use of conjoint analysis is common in market research, it can also be applied in employee experience research. Now imagine you have received two job offers and are trying to decide which to take. Job A offers more money, but the medical benefits are worse, and you are required to go into the office full time. Job B offers slightly less money, but the benefits are decent, and you’re only required to go into the office 3 days a week. Which job do you choose? Well, it depends on what you value. If compensation is more important than anything else, you would likely choose Job A. If instead you value flexibility and are willing to accept lower compensation, then Job B is probably your choice. This is what we could test by using conjoint analysis. 

In this study, we utilized the conjoint approach to answer two key questions: (a) Are there differences between the global regions (Asia Pacific, Europe, North America, and Latin America) in the job factor weightings?; (b) Are there instances where employees would trade more appealing levels of the most important factors for higher levels of less important factors (e.g., preferring a job with less pay if it comes with more flexibility)?

Methods

Participants and Process

The EVP survey was conducted for a 3-week period in 2023 at a global manufacturing company. In total, 4,315 staff employees (70% overall response rate) completed the EVP survey (60% North America, 68% Europe, 91% Asia Pacific, and 78% Latin America). 

Qualtrics was used to send an email inviting staff members to complete the EVP survey with a unique link. This unique link allowed all demographic data (e.g., age, tenure, business, etc.) to be linked to the employee’s response, eliminating the need to ask demographic questions within the survey. 

Measures

The EVP survey was divided into four sections representing the four sections of the framework (i.e., material offerings, growth and development, connection and community, meaning and purpose). Within the sections, participants were asked to select the relevant offerings they find most important and then rate how well those items meet their needs. There were also several open-ended items that allowed participants to write-in responses to questions like, “What are other benefits you would find valuable that we do not offer today?” The inclusion of these items meant we were not limited to refreshing our EVP only against what we currently offer; instead, we could gain insight into the things our employees value that other companies may be offering. 

At the end of the EVP survey, employees were taken to a section on job preferences (e.g., the conjoint analysis). Figure 2 shows the instructions provided to employees at the start of the conjoint section of the EVP survey:

Figure 2: Conjoint Instructions

Workplace Priorities

You are almost done! This is the last section. Thank you for sticking with the survey. Your feedback is extremely valuable.

Items in this section of the survey are designed to gather how employees prioritize aspects of their job.

You will be presented with 6 items that ask you to think about your ideal job and select the option you would prefer. The options will differ on a variety of factors:

• Workload: The amount of work you do on an average day/week
• Compensation and Benefits Package: The total compensation (base pay, pay increases, incentives) and benefits (e.g., paid time off, retirement benefits, health benefits, etc.) you receive at the company
• Location / Schedule Flexibility: How much flexibility you have in where and when you work
• Career Growth: The speed at which you are able to grow in your career
• Sense of Belonging: How much you feel welcomed and valued by the company
• Social and Environmental Sustainability: How focused the company is on making a positive social and environmental impact

Think about your preferred job when you select the option you prefer. Please take a moment to review the definitions listed above before starting this section.
______________________________

In this section, they were presented with a series of six items and were asked to choose which job they would prefer (an example is presented in Figure 3). 

Figure 3: Conjoint Analysis – Sample Item

(1/6) Think about your preferred job. Choose one of the two options below:

	Job 1	Job 2
Workload	Light	Heavy
Compensation and benefits package	Average	Below average
Location/schedule flexibility	High	High
Career growth	Rapid	Slow
Sense of belonging	Strong	Strong
Social and environmental sustainability	Somewhat focused	Somewhat focused
____________________________

Based on the internal EVP framework, as well as findings from the 2022 Qualtrics Destination Workplace report, six factors were tested: workload density, the compensation and benefits package, location/schedule flexibility, career growth, sense of belonging, and social and environmental sustainability. Each of these factors had 2–3 levels to be tested, and the exercise seen in Figure 3 repeated with different combinations of the levels seen in Table 1. From this, the critical factors could be derived regarding the employee experience in deciding between roles and how many different levels within these factors make a position more or less desirable. 

Table 1: Conjoint Analysis – Factor Levels

Factor	Level 1	Level 2	Level 3
Workload	Light	Average	Heavy
Compensation and benefits package	Below average	Average	Above average
Location/schedule flexibility	None	Some	High
Career growth	Slow	Average	Rapid
Sense of belonging	–	Average	Strong
Social and environmental sustainability	Not focused	Somewhat focused	Very focused

The number of responses that should be collected and the relevance to the individuals taking the survey is critical to the success and accuracy of the conjoint results. Here’s an equation Sawtooth Software uses to determine the number of responses (Qualtrics, n.d.):

Number of respondents = (multiplier*c)/(t*a)

multiplier = 750-1000

c = largest number of levels across all features

t = number of tasks or questions

a = number of alternatives or choices per question

The recommended multiplier is 750 for larger projects and 1000 for smaller projects. Given the size of the EVP study, 750 was used as the multiplier. Applying this formula resulted in a sample size of approximately 250 to have confidence in the findings.

With the derived utility coefficients as the basis of the analysis, outputs and deliverables can be prepared to showcase the findings of the study. The core summary metrics in a conjoint analysis include:

• Feature importance: The amount of influence and impact that a feature has in decision making among the options presented. The greater the feature importance, the more weight and control it has in what makes a favorable option, in this case the job chosen. Feature importance is calculated by taking the distance between the best and worst level within that feature. The bigger the distance, the more important the feature. A simple way to think about feature importance is that the levels of that feature have a big impact on whether or not a job option is selected or not in a choice-based conjoint model.
• Preference share: The measurement of the probability that a level would be chosen over another with all other feature components held constant. It is a product of the utilities being calculated using a Multinomial Logistic Regression model and is derived by exponentiating the level utility and dividing that by the sum of all of the exponentiated levels within the feature.

Key Findings

Research Question 1: Differences by Region

Figure 4 displays the findings for each region. The larger the percentage, the more weight that factor carries in the decision of selecting between two jobs. Per region, weights sum to 100%. As an example to facilitate interpretation, the compensation and benefits package carries 37.9% of the weight in deciding between two jobs for North American employees, meaning it is over twice as important as career growth, which only carried 13.7% of the weight.

Figure 4: Job Preference Factor Ratings

As illustrated in Figure 4, notable differences were evident across various regions, yet compensation and benefits remained the top priority for employees everywhere. This is logical because employees fundamentally work to earn an income. Therefore, in our analysis of regional themes, we emphasized factors beyond compensation and benefits. In North America, after basic needs are satisfied, employees prioritize autonomy-related factors such as flexibility, career growth, and workload, which together account for 51% of the job choice decision. Interestingly, location/schedule flexibility constituted nearly a quarter of the decision (24.3%) and was more significant to women (27%) than men (22.7%), whereas social & environmental sustainability was considered 2 to 2.5 times less important compared to other regions.

Employees in Europe and Latin America showed similar concerns for autonomy. However, career growth held more significance for those in Latin America, whereas flexibility was more important for those in Europe. Both regions placed a similar emphasis on social and environmental sustainability, which, along with factors like flexibility and career growth, constitute over 50% of job decision criteria. This indicates that employees in these regions value having control over their futures within sustainable companies.

In contrast, employees in the Asia Pacific region distinguished themselves by prioritizing workload and social and environmental sustainability over location or schedule flexibility. Results specifically indicated that workload mattered more to lower level staff compared to those in senior roles. Typically, managers face more challenges with work–life balance and burnout, but in this case, they reported that workload is less critical when comparing job options. According to Qualtrics (2022), one explanation could be that managers might undervalue managing their workload and overestimate their ability to handle it.

Interestingly, across all regions, a sense of belonging was identified as the least important factor. Despite being ranked last, sense of belonging is frequently cited in academic research as a key driver of employee engagement. It’s often considered essential for retaining employees rather than attracting them, likely because it’s challenging to predict how one will feel about belonging in a company before actually starting the job.

Research Question 2: Tradeoffs

After evaluating regional and demographic differences, we ran simulations to see how these insights might impact employees’ decisions. The simulator allowed us to set conditions for two positions and predict the percentage of employees that would choose one over the other.

In North America, Latin America, and Europe, location/schedule flexibility proved crucial. Employees in these regions would trade higher pay and benefits for more flexibility, especially in North America. Conversely, Latin American employees prioritized career growth over flexibility, opting for jobs with no flexibility but at least average growth opportunities.

In Europe and Latin America, sustainability is so important that workers are willing to sacrifice rapid career advancement to work for environmentally conscious companies. In Asia Pacific, a strong focus on sustainability overshadowed even an attractive compensation package.

One stark difference was observed between Asia Pacific and North America regarding career growth and workload. Asia Pacific employees prefer manageable workloads even if it means slower career growth, whereas North American employees accept heavier workloads for faster career progress.

In all regions, we assessed how many employees would prefer a company offering average pay and benefits but excelling in other aspects, compared to a company providing superior pay and benefits with only average performance in other areas. Essentially, we examined whether a combination of the other job factors could outweigh the importance of compensation and benefits when choosing between two jobs. This proved true in all regions except North America. For those in North America, the company with better pay and benefits would need to offer low (not average) levels in other factors for employees to consider the lower paying option.

Summary and Conclusion

The decision one makes when deciding between two jobs is never just about money. By utilizing conjoint analysis, we were able to demonstrate exactly how the company’s global staff weigh job factors. Although each region considered compensation and benefits to be the most important factor, it only carried a little over one-third of the weight in any given region. The other two-thirds of the decision are driven by factors like career growth, flexibility, sustainability, workload, and sense of belonging, though the weighting of these factors differed regionally and demographically.

Although conjoint analysis is not frequently used in examining employee choice behavior, we advocate its use as just one tool in your analytic toolbelt. Uncovering nuanced distinctions between staff in different regions, and between demographic groups within the same region, can inform how your organization attracts and retains employees. By knowing which factors employees consider most important, you know what you can leverage when certain factors are fixed. For instance, if the salary offered has a lower cap than employees prefer, you could turn to the job preference results to see which other factors to emphasize. For the company in question, this may mean emphasizing flexibility for those in Europe, Latin America, and North America, but highlighting a manageable workload for those in Asia Pacific. These results can also inform what your organization should emphasize regionally on a job description or your careers page as part of your larger EVP. 

After all, defining your organization’s EVP means determining who finds what important about their job and conjoint analysis is one way to discover how employees (a) weigh job factors and (b) what tradeoffs they would be willing to make. With this information, your organization could better tailor job descriptions and recruitment/retention efforts as you know which factors can be adjusted when certain factors are constrained.

References

Adrian, L. (2019, September 19). Conjoint analysis: What, why, and how. Cleverism. https://cleverism.com/conjoint-analysis-what-why-how/ 

Baker, M. (2000). Marketing Management and Strategy (3rd ed.). Macmillan Business.

Mortensen, M., & Edmondson, A. C. (2023, January-February). Rethink your employee value proposition. Harvard Business Review. https://hbr.org/2023/01/rethink-your-employee-value-proposition

Neufeld, D. (2023, March 9). Here’s what the US labour market looks like right now. World Economic Forum. https://www.weforum.org/agenda/2023/03/heres-what-the-us-labor-market-looks-like-right-now/

Qualtrics. (2022). 2022 destination workplace report: How people value 7 key attributes of the employee experience. https://success.qualtrics.com/rs/542-FMF-412/images/2022-destination-workplace-report.pdf?utm_medium=paid+social&utm_source=linkedin&utm_campaign=na+ex+tof+lgf&utm_content=dest-workplace+2+vert 

Qualtrics. (n.d.). Conjoint Analysis white paper. https://www.qualtrics.com/support/conjoint-project/getting-started-conjoints/getting-started-choice-based/conjoint-analysis-white-paper/#SurveyandSampleSize

Shepherd, W. (2014). The heterogeneity of well-being: Implications for HR management practices. Industrial and Organizational Psychology, 7(4), 579-583.

Shepherd, W. J. (2024). The employment value proposition: Differentiating yourself among a sea of employers. In M. Morris (Ed.), Becoming a talent magnet: Lessons from the field on attracting and recruiting great people (pp. 32–61). Oxford University Press.