The New Employee-Consumer: Reinventing the Concept of the Employer Value Proposition as the Employee Consumer Proposition

As we navigate 2024, the traditional employer-employee relationship has shifted to one we have not seen before, with staff becoming employee-consumers. The personal values and priorities of the traditional employee have impacted their workplace expectations and the value their job can provide for them in return.

Many leading global recruiters I’ve spoken to since the pandemic have reported the emergence of a new type of candidate who is motivated by completely different priorities. Money and status are no longer the driving force behind their search, as lifestyle and life experiences have become the key considerations. Business leaders should understand that the employee has quietly become the new consumer, and that your Employer Value Proposition (EVP) is their new iPhone.

Evidence to support this tendency towards consumerist behaviour in employees can be seen by the labour-market volatility in London immediately following the end of the pandemic. Pressured by surging interest rates, inflation and a cost-of-living crisis, many employees turned to short-termism. The talent shortage, caused in part by Brexit, meant City companies took an opportunistic view to secure disengaged talent at any cost. Only now that the economic pressures are easing, City companies are realising they’ve probably overpaid, but for the employee-consumers, they’ve simply got a great deal. This is making the recruitment market a particularly challenging and expensive one. However, as with the dot-com bubble – this too will burst at some point. So, what can businesses do today to defend and sustain their personnel assets?

Using the same commercial, defensive strategies a business would deploy with its purchasing customers may be a good start. The premise of a model I have used, and which remains relevant with today’s labour-market challenge, is founded in longstanding product marketing strategies. It binds together transformational drivers with core transactional requirements to provide an experience for the consumer that builds loyalty through positive user experience, storytelling to build belief and purpose and exemplary customer service (leadership). I call it The HR Proteus Test^(©). The traditional EVP now becomes your Employee Consumer Proposition (ECP).

The HR Proteus Test ^(©)

There are four key consumer influencers that matter in today’s labour market: Morality, Mental Health, Mobility and Money.

Morality

The pandemic keenly tested all businesses to ‘do the right thing.’ This notion is felt acutely in the experiential transaction element of the Proteus model. For example, we observed many businesses furloughing staff rather than reducing their workforce. Employees today are keenly aware of social and climate-related issues and the emergence of board-level ESG focus is something the new employee-consumer expects. It alleviates social guilt and responds to the human need to believe in something bigger than ourselves. Just like consumer markets, with their ability to give anonymous feedback, the employee-consumer also has the ability to be globally vocal through social media networks and similar employee platforms. For example, Glassdoor’s growing popularity - according to Gitnux it has 64 million unique monthly users - can either enhance your product attractiveness or damage it. Additionally, the morality of leadership behaviour speaks to the transformational element of the Proteus test: the purpose and values that drive your business. Any deviation from values that should guide leadership behaviour will lower your product’s value.

Mental Health 

After 25 years of working in HR, it’s interesting, and welcome, to see that the pandemic helped shine a spotlight on employee mental health. But today’s focus on mental health began before the pandemic and has deep roots. The enduring primary relationship for today’s generation of talent has been online and virtual. The reality of office challenge, criticism, in-person debate and feedback engages under-used behaviours and heightens stress levels. The employee-consumer cannot be anonymous and will have to confront the stress. If you’ve bought a product that doesn’t fit the description, you can complain to the store and normally get a refund. This consumerist mindset has shifted to the workplace. Leaders should ask themselves what is their equivalent of the consumer refund? By harnessing transformational elements from the Proteus Test, open and transparent communication and consistent corporate values-based leadership behaviour could heal that disconnect. People are not more mentally ill today than they were 50 years ago, it’s just that the subject has now been thankfully normalised – and yet businesses still struggle to cope with it.

Mobility 

Climbing the career ladder has almost become a Jurassic notion. Building your career is something subtly different and enjoyment is a key component. Satisfying the consumer’s need for freedom to enjoy how and where they spend their time will more often than not surpass financial considerations. Freedom of mobility goes beyond mere hybrid working. The freedom to choose working hours and location today is a major game-changer. Prompted by the pandemic, during which many workers based themselves in second residences in different countries, the EU started working on a “Framework Agreement for Social Security,” delivering its decision in July 2023, following a two-year consultation period. Effective 1 July 2023, the Framework Agreement establishes that an employee who resides in a different country from where his or her employer is located can work up to 49.9% (up from 25%) in their country of residence and maintain coverage under the social security scheme in the country of the employer. This simplifies the rules enormously for teleworkers, who were often denied more work from home by their employers because that would complicate social security payments and rules. Financially and administratively, this was amazing news for businesses that were running expensive shadow payrolls. It also paves the way for employees to be able to “work from anywhere,” a concept that is slowly creeping into the ECPs of forward-thinking businesses.

Money 

Consumerist behaviour tends to involve instant gratification, impatience and fickle decision-making, which err on the side of short-termism. The pre-pandemic decade of record-low interest rates created a distorted illusion of the cost of borrowing for talent. The world today is facing a deeply worrying wave of geopolitical crises impacting markets across the world, which will reverberate for years to come. The employee-consumer short-termism I see in the labour market today is here to stay. What that means is that your competitors can pinch your talent easily by simply paying more money. If your business can’t keep key talent longer than 18 months it’s probably because your product (ECP) isn’t positioned appropriately with the new employee-consumer drivers. Employees have been able to double their salaries in some cases in the three years since the pandemic started. Only now will employers be able to assess if they’ve overpaid for that investment.

In conclusion, it’s important for boards and business leaders to reinvent the concept of their EVP to that of an ECP and to benchmark it against a model similar to The HR Proteus Test (©) for sustainability - and then pivot if necessary.