What is employee experience?
Employee experience (EX) originally sprung into existence in response to emerging market trends. In order of significance, these were:
- The need to attract and retain talent in the face of a limited supply
- The need to engage that talent to maximize productivity and accelerate growth
- The need to be socially responsible and support wellbeing in the workforce
Employee experience builds upon an existing body of research surrounding customer experience (CX). Customer experience is the sum of all experiences a customer has with a company. It includes everything from the first time they saw the company advertised, to the recommendation they received from their friend, all the way through to the purchasing experience and beyond. Every interaction a customer has with a company makes up part of their overall experience.
Businesses care about customer experience because it’s a powerful indicator of future success, dictating how likely a customer is to repurchase or recommend its goods or services to a friend.
Employee experience follows the same principles. By taking a granular look at all of the interactions experienced by employees at every stage of the journey or lifecycle, we can more effectively engage the workforce. More than a matter of culture or satisfaction, employee experience is about all the many components that add up to form a person’s perception of the company they work for. But why does it matter?
Why does employee experience matter?
"People don't buy what you do, they buy why you do it."
Simon Sinek, Author and leadership speaker
As the above quote demonstrates, when we understand why we do something we do it better and with more passion.
When it comes to employee experience, we do it because we care about our employees and we want them to have the best experience of work. But as strategic business leaders, we're also focused on business outcomes. Delivering world-class employee experiences helps businesses to thrive as well as their employees.
The EX funnel: An employee journey
To understand how to make the changes that bring about great employee experience, we need look no further than the work of Jacob Morgan.
Jacob Morgan, author of ‘The Employee Experience Advantage’ and an expert in the field of EX, offers a model that effectively captures the various influences and products of positive employee experience. The model he calls “reasons for being” boils down the employee experience into a framework of three distinct stages: Employee experience, employee engagement, and business benefits.
This framework offers enterprises a new way of visualizing the employee journey as a kind of funnel, where the goal is to ensure the employee journey moves through each stage for enterprises to reap the advantages from the funnel’s end.
Stage 1: Employee experience
The top of the funnel is where enterprises looking to improve the employee experience should start. Improvements at this stage have the greatest potential for positive impact.
As a measure of the beneficial impact of every single interaction an employee has with an organization, the employee experience contains many moving parts. To better understand it, we can split it out into three core components:
The working space
While the physical environment itself – what you see, touch, taste, smell, and interact with in a workplace – is part of this, with the rise of remote work it’s important to realize that the physical space of work encompasses much more. It’s also the colleagues you work with, the makeup of teams and departments, even the diversity of people and perspectives.
Celebrated culture
An enterprise’s cultural environment is how the workplace feels. It’s the tone you set and the feeling employees get as they work within an organization. Culture is set by the purpose of an enterprise, and is influenced by leadership style, organizational structure, the values you encourage, the people you hire, the behavior you reward, and more.
Top technology
In recent years technology has taken on a greater role in the day-to-day functions of work. Giving employees the right tools to do their jobs, from laptops and phones to apps like Teams or Slack, is more important now than it ever has been. The wrong tools can damage employee productivity and engagement, leaving them frustrated with the simple act of completing tasks.
"Culture + Technology + Physical Space = Employee Experience."
Jacob Morgan, Author of The Employee Experience Equation
Stage 2: Employee engagement
Sat in the middle in the funnel, engagement is the result of stellar employee experience and the driver of its business benefits. It may seem like a midpoint through which all employees pass, but for those offering underwhelming experiences, it can represent the end of the employee journey.
Employee engagement is by no means a guarantee. For businesses to reap the rewards of employee experience they must ensure that what they’re offering genuinely engages their people. For this to work, employers must respect their people, listen to what they want, and enact meaningful change based on this feedback.
"Customers will never love a company until its employees love it first."
Simon Sinek, Author and leadership speaker
Enterprises must make use of pulse surveys, feedback forms, social channels, and engagement analytics to measure and track employee engagement. Engagement automation features and reward and recognition tools can then be used to target and reach employees and boost engagement where it’s lacking.
Stage 3: Business benefits
With the employee journey successfully moving through the funnel, providing a positive employee experience that in turn generates engaged people, enterprises can begin to reap the rewards of the EX funnel’s final stage.
This stage represents the bottom line of employee experience, with employees that move through to this point generating benefits that increase the health and success of global enterprises.
Here are some of the key ones:
1. Good employee experience reduces employee turnover
High employee turnover can cripple a company. In fact, Gallup estimates the global cost of disengaged employees to be $8.8tn.
The costs of hiring, on-boarding and further training are significant, and when that employee leaves after a short tenure, the effects can be devastating. It’s not just about the eye-watering monetary losses either – the impact on culture can be just as damning. Investing in employee experience is one way of keeping employees for longer and avoiding the impact of repetitive disruption.
2. Engaged employees are more productive and profitable
Fueling engagement means providing employees with a working environment that allows them to operate at their best. This means having the right environment, culture and technology.
An empowering employee experience – one that engages employees, optimizes the path to tools and gives people everything they need to excel – can save enterprises up to $41.6m annually in productivity gains and increase employee productivity by 21%, as per Gallup. Research by the same organization also suggests that engaged employees are 24% more profitable.
3. The better the employee experience, the better talent you attract
Attracting talent is top priority for most companies who face a dwindling pool of bright sparks. There's a global skills shortage affecting a cross-section of industries, and more than ever, companies are competing against each other to attract the best talent. One of the key areas of this battle is the employee experience.
Many HR and talent acquisition teams are laser-focused on developing a good employer brand – with things like Glassdoor reviews and existing employee testimonials top of the list. The better the experience is for those employees, the more likely they are to show you in a positive light to potential candidates.
A study by Gartner suggests that companies with engaged employee advocates are 58% more likely to attract, and 20% more likely to retain, top talent,
4. Good employee experience leads to a good customer experience
Richard Branson’s famous quote states that “Employees come first. If you take care of your employees, they will take care of the clients.”
When your employees are engaged in their work and happy with their jobs, customers notice. Instead of half-hearted responses and minimal-effort approaches, employees that take pride in their work are willing to go the extra mile for your customers.
Interestingly, Glassdoor research has shown that a 1-point increase in company rating correlates with a 1.3-point increase in customer satisfaction.
Unlock world-class employee experience
When we understand why experience matters, and couple that with how to create world-class employee experience, real transformation begins. If you want to understand how ace technology can transform employee experience at your enterprise speak to an expert today.
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