Implementing an Employee ValueProposition in the GCCA Case Study on TNT ExpressCase studyReference no 410-093-1

This case was written by Professor Abhilasha Singh, Institute of ManagementTechnology, Dubai and Jacqueline Mitchell, TNT Express. It is intended to beused as the basis for class discussion rather than to illustrate either effective orineffective handling of a management situation. The case was made possible bythe co-operation of TNT Express.

© 2010, Institute of Management Technology, Dubai and TNT Express.No part of this publication may be copied, stored, transmitted, reproducedor distributed in any form or medium whatsoever without the permissionof the copyright owner.

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Implementing an Employee Value Proposition in the GCC:

A Case Study on TNT Express

Prof. Abhilasha Singh, Institute of Management Technology, Academic City, Dubai, PO Box 345006 UAE E-mail – abhilasha@imtdubai.ac.ae Ms Jacqueline Mitchell TNT Express, PO Box 15321, Dubai UAE E-mail – jackie.mitchell@tnt.com

ABSTRACT

In a highly competitive labor market, employee value proposition is becoming a solution

to attract and retain talent. The present case helps the readers to identify the factors of

Employee Value Proposition to build a credible, strategic and competitive EVP at TNT

Express in Kuwait, Bahrain and Saudi Arabia.

The case also focuses on the differences in the choice of factors selected by the

employees of TNT Express in three different countries that will help the HR

professionals in identifying the employee preferences and perceptions in determining the

EVP attributes that matter most to attraction and retention.

INTRODUCTION: WHY EVP?

In today’s world, an array of organizations ranging in all sizes, industries, and

geographies are facing problems of employee retention and of talent shortage. The

consequence of this entire situation has lead to an increased demand in supply

constrained labor markets. This shortage is manifested through a diverse and wide-

ranging set of challenges: a shortage of highly qualified graduates, pending retirements,

an aging workforce, and a lack of experienced talent. These supply problems are coupled

with rising demand for labor, creating two additional issues with which organizations

must contend: high turnover and wage inflation. In combination, these problems threaten

to disrupt operations across the globe, and require organizations to seek new and more

refined methods to attract and retain the talent they need for success.

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In current economic conditions where cost optimization is very important, it is ideal to

execute a system as a means of optimizing the performance of each employee thereby

achieving an efficient organization. Companies have begun to recognize the importance

of EVP. McKinsey and Co. have shown this importance through the statement given by

them which says that “Companies must therefore make talent management a top priority

- create and continuously refine their employee value proposition, and source and

develop

talent systematically.”

The fact is that to combat the problem of talent management especially attraction and

retention, the Employee Value Proposition needs to be implemented in organizations for

excellence.

Employee Value Proposition (EVP) is a set of 38 important factors (Fig.1) that

employees and labor market perceive as the value gained through employment. It is the

measurement of the balance between what an employee receives from their employer in

return of their performance on the job; a balance between ‘get’ and ‘give’. It drives

attraction of potential candidates and retention of the existing employees and it is built

upon the market realities and leverages the organizational strengths therefore aligning

with strategic objectives of the organization (CLC Research, 2006).

Figure-1

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SOURCE: CORPORATE LEADERSHIP COUNCIL RESEARCH 2006

An Effective Employee Value Proposition provides organization with three quantifiable

benefits:

Enhanced attractiveness: Organizations with effective Employee Value Propositions are

able to source from a much deeper talent pool in the labor market. According to the

findings by Corporate Leadership Council, 2006, the top-performing organizations draw

candidates from about 60% of the labor market, including "passive" candidates who

would otherwise be content to stay with their current job. Lesser- performing

organizations are able to source only from the most active 40% of the workforce.

Greater Employee Commitment: Organizations with effective Employee Value

Propositions enjoy significantly higher level of commitment from their employees. A

research by Corporate Leadership Council suggests that the most efficient organizations

have 30-40% of their workforce displaying high levels of commitment, compared to less

than 10% in underperforming organization.

Compensation Saving: Organizations with effective Employee Value Propositions are

able to reduce the compensation premium that is required to attract the new candidates.

As highlighted by a study by Corporate Leadership Council, the leading organizations are

able to spend 10% less on base pay as compared to underperforming organizations.

TNT EXPRESS: BRIEF PROFILE

Established in 1946 TNT is now a global integrator and provides its services in more than

200 countries. TNT, through its two divisions, Express and Mail, is part of the global

transportation and distribution industry, and dedicated to providing delivery solutions to

its customers. The global transportation and distribution business is a vast industry which

is estimated to be worth over US$3,500 billion. TNT serves more than 200 countries, is

present in 64 countries and employs around 160,000 people. Its revenue in 2009 was over

10 billion Euros. TNT Express is in the business of transferring goods and documents

around the world tailored to its customers’ requirements. It is TNT’s business to deliver

the “business” of its customers at the right time and at the right place. With 30,000

vehicles and 48 aircraft, it is the largest Express operator in Europe. In 2009 TNT won a

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number of awards including the Clinton Global Initiative Corporate Citizenship Award

and was the top scoring company in the Dow Jones Sustainability Index.

In a competitive market, the right strategy is a key to survival and success. TNT is

reviewing its strategy in the world after the global recession. One strategic area is that of

the Emerging Markets which includes the Middle East.

The Human Resources function at the TNT Express Head Office develops policy and

tools to be used by Regional Centers and Country Operations. Understanding that ‘one

size’ does not fit all, the tools are flexible enough to be localized where required, so

enabling HR to integrate into local business needs.

One key factor behind their spectacular track record is the HR function and the

enthusiasm, dedication and professionalism of the people. TNT values its people,

motivates them, empowers them, recognizes their contribution and rewards them. It has a

"Sure We Can" culture, where employees are encouraged to be innovative and to show

commitment to their job. The key objective of Human Resource at TNT is to develop

people and their competency at all levels and in continuing efforts to aspire to be the best

employer TNT has moved beyond people management and had introduced EVP, to prove

their mission.

“Our ambition is for our people to be a competitive advantage for TNT Express and for

TNT Express to become recognized as a preferred employer in the Express industry.”

– HR Express Statement

WHY EVP AT TNT EXPRESS?

The Regional General Manager MEA called the HR Manager into his office. He asked,

‘Why is it taking so long to hire an Operations Manager in Bahrain and a Sales Manager

in Saudi Arabia”.

The HR Manager explained, ‘The talent we need is hard to find in the region. It is

difficult to find candidates who want to work in these countries’. The Regional General

Manager considered this for a moment, and said, ‘It is up to you to ensure that we can

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always attract candidates for our jobs. I want these immediate vacancies filled within 4

weeks and I want a permanent solution to this problem’.

The HR Manager returned to her office. She could meet the deadline for hiring but how

should she go about creating a long term strategy to ensure the creation of a larger pool

of candidates for TNT in the Middle East. There were other positions which were also

difficult to recruit in the region. The only way would be to raise the profile of TNT as an

attractive employer. She recalled a presentation about Employee Value Proposition at

Divisional HR Conference 2 years ago, and the work that had been done in this area

afterward. The benefits of EVP were candidate alignment to the organization, a greater

talent pool and better retention which would answer her immediate issues. After doing

some further reading, she decided that creating and implementing EVP in an arena of

increasing competition for talent would be a lasting and successful strategy for TNT.

TNT Express, known for its journey towards bringing excellence at work place, sensed

an urgency to introduce EVP and conducted a pilot study in three countries namely,

Kuwait, Bahrain and Saudi Arabia to create an Employee Value Proposition that

highlights the most competitive and strategically relevant aspects of TNT Express and

further to identify human resource investments that matter most in attracting and

retaining the talents.

The HR manager Ms. Jackie planned a structured study to be implemented in two phases.

The first phase of the study was to identify the factors important for attraction and

retention of talent and also to bring out the differences, if any, in the choice of factors

selected by the employees of TNT express in three major countries.

After thoughtful consideration of all relevant factors, the second phase of the study was

aimed to identify the competitive aspects of the value proposition that best aligns with

TNT’s strategy, culture, HR investments and competitive differentiation with the

employment value proposition, to achieve the desired results.

She planned a systematic study to collect the data through survey on employees’

preferences and perceptions to determine the Employee Value Propositions’ factors of

attraction and retention. This survey also took into consideration the differences in the

choice of factors selected by the employees.

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In the second phase of the study, she took maximum involvement of management teams

to define the Employee Value Propositions which is aligned with TNT’s strategy and

culture and was supported by HR investments by assessing the costs and differentiation

that comes with the factors suggested by the Employees.

The data was collected for phase one, on employee preferences and perceptions to

determine the EVP attributes that matter most to attraction and retention by conducting

employee surveys which were a prime source of the data. This survey was conducted for

Stream 1 employees who are not involved in people management and Stream 2/3

employees who manage people and teams. The survey involved the set of 38 factors in 3

different sheets seeking different kinds of information.

To arrive at attraction factors, employees were asked to rate the factors taking into

consideration their importance when they are applying for any job but to discover what

employees perceive about all 38 factors, employees were asked to grade TNT’s

performance on the factors listed selecting the category which best fits.

Also, to arrive at retention factors, employees were asked to choose top 10 most

important factors that matter the most for their choice of employer.

The second phase of the study was focused on management teams to define an EVP that

is relevant to strategic priorities and the organization’s culture, supported by HR

investments, and differentiated from competitors.

PILOT STUDY AT TNT EXPRESS:

Jackie was not sure about the implementation of EVP and after giving a serious thought

to it; she planned to go for a pilot study.

Keeping in mind the stated objectives, the data was collected and results were analyzed.

Attraction data was analyzed by collecting the data from employees who had served TNT

for a period of six months or less. Analysis for stream1 and stream 2/3 were made

separately since the research showed that level segmentations could show differentiated

factors. The analysis was done using MS – Excel by assigning weights for each category

(e.g. Very Good = 5, Good = 4 and so on). The employee perceptions were analyzed to

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identify the strengths and the weakness of TNT in the three countries- Kuwait, Bahrain

and Saudi Arabia.

Table: 1 Factor Selected by Employees at Kuwait

Top EVP Factors Resulting from Analysis

Stream 1 Stream 2/3

Attraction Retention Attraction Retention

Health Benefits Vacation Future Career Opportunities

Manager Quality

Communication with Co –workers

Health Benefits Recognition Future Career Opportunities

Development Opportunities

Compensation Respect Compensation

Future Career Opportunities

Retirement Benefits Communication With Co –Workers

Social Responsibility

The Table: 1 shows clearly the top factors selected by the stream 1 employees at Kuwait

for attraction are health benefits, communication with co-workers, development

opportunities and future career opportunities. The attraction factors for stream 2/3

employees were future career opportunities, recognition, respect and communication with

co-workers. The retention factors for both streams had the compensation factor in

common but stream 1 employees chose vacation, health benefits and retirement benefits

whereas stream 2/3 employees chose quality, future career opportunities and social

responsibility as other top factors for retention.

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Table: 2 Employee Preferences & Perceptions at TNT Kuwait for Stream 1 & Stream 2/3

Employee Preferences & Perceptions at TNT Kuwait for Stream 1 & Stream 2/3

Table 2 clearly shows the employees preferences and perceptions with regards to EVP

factors of attraction and retention for Stream 1 and Stream 2/3. The factor which is

common in attraction and retention for stream 1 is Health Benefits as per the employees’

preferences and perceptions. Future Career Opportunities is the common factor for

attraction and retention for Steam 2 and Stream 3 in Kuwait. Also results indicate that

candidates give high importance to Respect and Communication with Co-Workers as the

factors for attraction to TNT, while the existing employees consider Manager Quality and

Social Responsibility as the most important for retention.

• Health Benefits • Recognition (Attraction)

 

• Communication with Co‐Workers (Attraction) 

• Manager Quality(Retention) • Social Responsibility(Retention) • Respect(Attraction) 

• Compensation (Retention) • Future Career Opportunities 

(Attraction) • Retirement Benefits (Retention) • Compensation(Retention) 

• Development Opportunities (Attraction)• Vacation (Retention) • Future Career Opportunities • Communication with Co‐

Workers(Attraction) 

TNT Employee Perception 

Low 

High 

HighFactors Attraction/Retention ‐ Perceptions

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Table: 3 Employee Preferences & Perception at TNT Bahrain for Stream1 and Stream

2/3

Employee Preferences & Perceptions at TNT Bahrain for Stream 1 and Stream 2/3

Interpretation of Table 3 makes it evident that there are no factors that are common

between the Stream 1 employees for attraction and retention. However between Steam 2

and Stream 3, Health Benefits are the most important for attraction and retention. Finally

candidates in Bahrain feel that Communication with Co-Workers is what attracts them

most to TNT while Health Benefits, Retirement Benefits and Senior Leadership

Reputation are the factors that play an important role in retaining the existing employees.

• Health Benefits • Health Benefits(Retention) • Retirement Benefits (Retention) • Senior Leadership Reputation

(Attraction) • Communication with Co-

Workers(Attraction) • Future Career

Opportunities(Retention) • Future Career

Opportunities(Attraction • Retirement

Benefits(Retention)

• Meritocracy(Attraction) • Recognition(Attraction) • Manager Quality(Attraction) • Compensation(Retention) • Vacation(Retention) • Development

Opportunities(Attraction)

High 

Factors Attraction/Retention ‐ Perceptions

TNT Employee Perception 

Low 

High

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Table: 4

Employee Preferences & Perceptions at TNT Saudi Arabia for Stream1&Stream 2/3

• Manager Quality(Retention) • Development

Opportunities(Retention)

• Vacation • Development

Opportunities(Retention) • Organization Stability(Attraction) • Manager Quality(Attraction) • Health Benefits(Retention)

• Health Benefits • Compensation(Attraction) • Work Life

Balance(Retention) • Recognition(Attraction) • Organization

Stability(Attraction)

• Compensation • Future Career Opportunities

(Attraction)

Legend:

Text in Black – Stream 1

Text in Bold – Common factor of attraction and retention

Text in Red – Stream 2/3

Text in Bold – Common factor of attraction and retention

Employee Preferences & Perceptions at TNT Saudi Arabia for Stream1&Stream

2/3

Table 4 shows that according to the employees of Stream 1 in Saudi Arabia, Health

Benefits and Vacation are the common factors for attraction and retention in TNT,

whereas employees of Stream 2 and Stream 3 have rated Compensation as the common

factor for attraction and retention. Organization Stability is a factor of high importance

for attraction of employees of Stream 1 while Development Opportunities is of high

importance for retention of existing employees. Vacation is the common factor as well as

of high priority for both attraction and retention for Stream 1 employee. For Stream 2/3

employees, Manager Quality is a very important factor for attraction while Health

Benefits is the important factor for retention.

High 

Low 

TNT Employee Perception 

Factors Attraction/Retention ‐ Perceptions High

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Table: 5

Differences in Employee Preferences & Perceptions at TNT

in

Kuwait, Bahrain & Saudi Arabia

COUNTRY STREAM 1 STREAM 2/3

KUWAIT

1. Health Benefits 2. Communication with Co-Workers

3. Development Opportunities 4. Future Career Opportunities 5. Vacation 6. Compensation

7. Retirement Benefits

1. Future Career Opportunities

2. Recognition

3. Respect

4. Communication with Co-Workers

5. Manager Quality

6. Compensation

7. Social Responsibility

BAHRAIN

1. Manager Quality 2. Senior Leadership Reputation

3. Meritocracy

4. Recognition

5. Future Career Opportunities

6. Compensation

7. Health Benefits

8. Retirement Benefits

1. Health Benefits 2. Communication with Co – Workers

3. Development Opportunities 4. Future Career Opportunities

5. Vacation 6. Compensation 7. Retirement Benefits

SAUDI ARABIA

1. Compensation 2. Vacation

3. Health Benefits 4. Organization Stability

5. Manager Quality

6. Vacation

Development Opportunities

1. Future Career Opportunities

2. Compensation

3. Manager Quality

4. Organization Quality

5. Development Opportunities

6. Health Benefits

7. Work Life Balance

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Differences in EVP Factors at TNT in Kuwait, Bahrain & Saudi Arabia

Table 5 shows the differences in the choice of EVP factors at TNT in three countries

Kuwait, Bahrain & Saudi Arabia, chosen for the pilot study. The priority factors out of

38 EVP factors differs in each country, which will serve as basis for the management to

device an Employee Value Proposition, relevant to the strategic priorities and

organization’s culture of TNT express.

The results of the first phase were presented to the management teams at TNT Express

Kuwait and Bahrain separately for Stream 1 & Stream 2/3 and the top 4 factors for

retention and attraction were taken.

Also, the employee perception of the selected factors was shown to the management and

a discussion to device an Employee Value Proposition that was relevant to the strategic

priorities and organization’s culture, was initiated. The Employee Value Proposition had

to be supported by HR investments, and differentiated from competitors by assessing the

implementation costs, and competitive differentiation afforded by proposed EVP factors.

With the above mentioned employees’ response and thorough implementation of both the

phases of study, the HR manager was very clear about the importance of EVP and the

impact of internal and external factors like culture on employees’ perceptions.

Jackie said, “It was clear that the TNT country operations involved in the study were

quite different in what they wanted their EVP to communicate, due to their different size,

maturities and cultures. The ability to differentiate from the main competitors also

differed between locations”.

IS EVP THE ONLY ANSWER FOR TNT EXPRESS?

The present knowledge age is demanding a must change in the way of thinking to

bring a conceptual revolution. A revolution, to destroy the obsolete and to give birth to

the energetic and the living. Acquisition, reorganization, downsizing and job cuts are

becoming the hallmark of the upheavals of the knowledge age. These are the inevitable

birth pangs of a vibrant tomorrow. The HR department at TNT knew that the time has

come when we need to introduce EVP to achieve competitive edge. Today the

conventional premise that capital is rare and expensive and the people are abundant and

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cheap is no longer valid. Today, the capital is mobile and cheap (as compared to people);

because it is global. People, especially competent people, are becoming rare because of

the same reason. Globalization has opened new vistas for them. There was a time when

people were regarded as an item that increased costs. Today, every additional person,

with effective skills and competencies, means additional profit. In the Industrial era the

companies hired "hands". Obviously hands have limited productive potential. Today a

company recruits people, it employs additional minds, and a creative mind has unlimited

profit potential. Thus there is a qualitative difference in the field of Human Resource

Management between the industrial age and knowledge age. In industrial age HR was

one of the numerous functions amongst manifold operations. In knowledge age, HR is at

the heart of business. Every successful business leader in the knowledge age is a

successful human resources manager. These imperatives point out that the organizations

can no longer be complacent with their human resources or else they will perish in this

competitive age.

Thus, the importance of an effectual employment value proposition (EVP) cannot be

undervalued as it helps to attract, motivate and retain the most priceless assets of a

company, its employees. In a highly competitive labor market where top talent becomes

increasingly scarce, it makes sense for a company to invest in a strong employment value

proposition (EVP) in order to get the best results from their recruitment efforts.

Although, the notion of the EVP is not new and has been around for decades, still many

organizations have yet to realize the significance of having a strong EVP.

Jackie’s initiative of implementing EVP at TNT Express in three countries made it very

clear that ignoring the implementation of EVP can be a costly mistake, especially with

the continuing strong demand for talent across many industries and professions.

It is important here to mention that the management’s decision on the EVP focus area

was based on the few important parameters like current strength or weakness of TNT,

aligning TNT’s strategy with chosen factors of EVP, and financial implications of

implementing the EVP factors.

Based on these parameters, the management decided to focus on three of the Employee

Value Proposition aspects, that best aligned with strategic goals and offered the best

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opportunities for labor market differentiation at the same time representing current

strengths of the organization.

Management teams in Saudi Arabia, Kuwait and Bahrain were asked to pay special

attention to the identification of EVP aspects that are best aligned with the company’s

strategic objectives and provide the highest opportunities for competitive differentiation.

To assess the strategic relevance of each of the seven identified EVP factors, they

considered its alignment with the business objectives, company’s culture and

organization’s values. To identify the best opportunities for competitive differentiation

among the EVP factors, the management team assessed areas of current strength, areas of

current focus by closest competitors, and areas currently not well delivered by

competitors.

Finally, Jackie prioritized those HR programs and policies that have the highest impact

on reinforcing the EVP, where there is room for improvement, and where return on

investment is highest.

The identified EVP factors were taken into account and the HR activities that contributed

to the EVP factors at TNT were assessed for their impact and then further assessed for

improvements where it was believed that there could be a greater impact on talent

attraction and retention.

Lastly, based on the discussions with the employees, about the best way to communicate

a message internally, communication strategies were suggested. She prepared a

document for the HR department on ways to spread the message across the organization

about Employee Value Proposition at TNT Express. Communication strategies were

suggested for both internal and external communication. After identification of the EVP

factors, now she is happy with an EVP Express statement that was written separately for

Saudi Arabia, Kuwait and Bahrain based on the factors.

The pilot study has concluded that developing an EVP has become the key to success in

acquiring and retaining talent and is no longer an option. The development of employee

value proposition at TNT is not only to make itself appealing to external job candidates,

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but also for learning culture, high performance work practices, better management style

and growth opportunities, which is reflected in the perception of people having perceived

organizational support, high motivation, pride in identifying with organization and happy

to work there and thus are willing to ‘go the extra mile’ for the company they are

working.

Needless to mention that EVP captures the essence of what a company wants to stand for

in candidates and employees mind relative to competitive employers. The management

teams of TNT Kuwait, Bahrain and Saudi Arabia were involved to define the Employee

Value Propositions which is aligned with TNT’s strategy and culture and was supported

by HR investments by assessing the costs and differentiation that came with the EVP

factors suggested by the Employees.

Excited with the results Jackie strongly feels that even though the study was very

encouraging, it has raised many issues at the macro and micro level. She was left

unanswered on many questions:

The HR Manager Ms. Jackie Mitchell sitting in her office is thoughtfully considering how

she should now progress the results of the studies. It was clear that the employees in the

countries had very definite views on what they looked for in an employer. The EVP areas

which the management teams wished to focus on and where the employees had rated

them as weak in TNT were areas which were acknowledged to be requiring solutions. In

order to leverage these results to raise TNT’s profile in the countries involved in the

study, and to meet the objective of attracting talent, funding and in some cases policy

changes would have to be made. How could she get support at the Regional level for

financial investment while the country was in a cost optimization phase?

At what level of the organization should the implementations be initiated?

At the MEA Regional level, the Regional General Manager had a broader knowledge

and regional level view of the people management activities, and demanded some

consistency across the region, at the same time considering the differences caused by

government driven regulation. Many business decisions were driven by this approach.

Also, TNT branding in terms of consistent communications and approach to employees

and customers was considered to be critical and very regulated within TNT.

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Further what would be the real return on investment and how could this be measured

was the most important question which she knew would be raised by the management

and thus she had to answer?

She also considered the raised expectation of the employees in carrying out the survey.

How should she go about communicating the results and actions back to employees?

What result would establish that TNT met their requirements?

REFERENCE:

Attracting and Retaining Critical Talent Segments, Building a Competitive Employment

Value Proposition, Corporate Leadership Council, Corporate Executive Board, 2006.

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