employee experience: why it matters and how you can improve yours

We live in the experience economy. And in the war for talent, things are no different. Current and future employees are considering the experience they have with you as an employer as an important factor in deciding whether to commit.

As if HR didn't have enough to deal with already! Now it's critical to be paying attention to creating a positive employee experience (EX) to attract and retain the talent you need. If you don't, your competitors are almost certainly doing so: the 2021 Employee Experience Survey from WTW revealed that 92 percent of organisations plan to enhance their employee experience over the next three years.

Here's our in-depth guide as to why employee experience is important, how you can get buy in from the necessary stakeholders to support you, and what you can do to give your organisation the edge over the others you're competing with to attract and hang on to the talent you need.

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These links will take you to any of the sections in this article:

employee experience employee engagement

defining employee experience

Let's start with what employee experience is, and what it's not. We define it as: "The perception people have of you as an employer from everything they see, hear, feel and participate in from the first day they start with your organisation until the day they leave."

It spans the entire employee lifecycle. Some might include pre-employment onboarding activities, but we think of this as part of the candidate experience, managed during recruitment and selection.

Employee experience is also closely related to, but different from, employee engagement. We think of employee experience as the input and engagement as the intended output. Employee engagement has been a topic HR practitioners have worked with for the last couple of decades, whereas the focus on employee experience is a more recent phenomenon.

Managing the employee experience requires HR to have a far broader reach across the organisation than just implementing the initiatives typically associated with employee engagement. Aspects of employee engagement activity, such as regular employee surveys, are still useful. They provide insights into how employees are feeling about their employment experience, but an employee experience strategy needs to cover everything from whether IT gets fixed quickly to what an employee's departure is like.

building a business case for focusing on employee experience

Aside from the cost of an unfilled vacancy or the cost of employee turnover, there is now increasing evidence that organisations that are actively managing their employee experience are realising performance gains that provide competitive advantage.

MIT’s Centre for Information Systems Research shows that companies scoring in the top quartile for employee experience outperformed those in the bottom quartile on three important measures:

They benefitted from twice the innovation
They saw more than double the customer satisfaction
They enjoyed 25 percent greater profitability

If we follow the logic that creating a positive employee experience leads to greater employee engagement, there is well-documented evidence of the impact highly engaged employees have on business performance:

2.5x greater revenue growth
40% lower employee turnover and 50% fewer absence days
62% fewer accidents
18% higher productivity

Looking at the data, it’s clear that there is a significant return to organisations that focus on employee experience over the long term, not just engagement in the here and now.

Research by Jacob Morgan published in HBR also found a strong correlation between investment in employee experience and greater profitability and productivity. The same research also showed how these organisations had larger talent pipelines. One factor in generating this may have been that these organisations were 11.5 times more likely to appear in Glassdoor's Best Places to Work and other rankings. We know many candidates assess future employers thoroughly and value what they find on company review sites about employee satisfaction and company culture. Appearing in the Best Places to Work ranking could sway some candidates in choosing you over your competitors.

Morgan concluded, 'Looking at the data, it’s clear that there is a significant return to organisations that focus on employee experience over the long term, not just engagement in the here and now.'

research that supports investment in employee experience

One area of research that can help us develop a more positive employee experience is that of 'Job Embeddedness'. This was a term coined in 2001 about why people stay in their jobs, but has been built on extensively since. In the original model, the research shows three factors influencing employees' intent to leave. If we build employee experiences that strengthen these factors, we're likely to see a reduction in voluntary turnover. The critical factors in how embedded someone feels in their job are:

The extent to which they have links to other people and activities
The level of compatibility or comfort the employee perceives with the organisation's values, goals and plans for the future
The ease with which the links can be broken and the perceived material and psychological cost of leaving the job

The shorthand used for these three factors was 'links', 'fit' and 'sacrifice', and they are worth bearing in mind when considering how you can build stronger bonds with your employees to reduce turnover.

In embarking on any employee experience management, keeping this shorthand in mind can be a valuable guide as to whether the action will support the goal.

job embeddedness employee experience

how to get buy-in across the organisation

It can seem overwhelming to attempt to manage every aspect and touchpoint of an employee journey through the organisation. This is why it's important to engage allies across the business who can influence aspects of employee experience beyond HR's direct control. Key functions to involve will be IT, Facilities and Internal Communications.

Something similar may already exist if your organisation is paying attention to customer experience. Everything from workflows to cross-functional collaboration and escalation procedures will have been looked at to streamline and improve the customer experience. You can follow the same model - and possibly tap into some of the same resources - to improve employee experience.

A good starting point is to look at the typical employee journey for key job roles and identify the process owners. This is likely to include onboarding, engaging with the employee's immediate team, performance management, development in role and, ultimately, exit.

You can further prioritise which areas of the business you need to gain support from by analysing any existing employee engagement data and exit interviews. Any themes that emerge will reveal which areas of the business can do more in creating more positive experiences.

As with all organisational change efforts, leadership is key. An executive-level sponsor can be instrumental in helping other business leaders beyond the HR function see the importance of being more purposeful regarding employee experience.

If investing in improving your employee experience impacts any of the metrics above, then it will have been worthwhile. So let's look at what are considered to be the key factors in creating a positive employee experience.

what makes for a good employee experience?

Employee experience is generally made up three things: your culture, technology and the workplace itself. The MIT research referenced earlier summarised employee experience as being how hard it is to get work done in your organisation and the behavioural norms around collaboration, creativity and empowerment.

So you need to start with the basics and give people the tools they need to do their job. This starts from day one and we'll cover the importance of onboarding later on. The pandemic has also made it harder to create a vibrant workplace with a tangible culture - and we'll look at how to tackle that in the next section. So in looking at what makes for a great employee experience, let's start with company culture.

The culture element of employee experience is well articulated by MIT: the behavioural norms around collaboration, creativity and empowerment. If your organisation's management practices don't facilitate these things, you are already making it difficult for people to have a great employee experience. If you want to foster more of these elements, measure them in your performance management framework. The degree to which business and HR leaders reward these behavioural norms will drive better employee experiences for everyone.

Next, we come to technology. This is fundamental to how hard it is to get work done in your organisation. If people don't have the right tools and systems to operate effectively and efficiently, this becomes a huge drag on how employees perceive your organisation.

Research from Gartner identified that employees who are satisfied with their workplace applications are twice as likely to stay with their organisation - but 46 percent of respondents reported that they were not satisfied with their current applications.

When organisations measure employee engagement, IT issues are often a source of frustration in day to day work and a common gripe in employee feedback.

As Gartner has shown, technology plays an important role in the moments that matter and how employees perceive their experience with their employer.

As regards the workplace itself, almost everyone has had less time in their regular place of work as a result of lockdowns and the pandemic. However, as a return to the physical workspace becomes more of a reality, employees will, no doubt, be paying attention to how their employers are adjusting the work environment to help them feel safe and comfortable.

And the physical workspace is more important than you might think. Jacob Morgan estimates that it accounts for 30 percent of the employee experience. There is a social identity that employees have with their communal workplace, and the working environment can affect the psychological comfort of those that work there. The challenge now is that previous investment in social spaces, breakout areas and open plan offices to create enjoyable employee experiences need to be adapted for social distancing and safety.

How to create a positive employee experience for remote employees in the digital world

Creating strong bonds with employees and maintaining a vibrant company culture got a lot harder during the pandemic. With the majority of employees now favouring a hybrid approach to work, employers need to find new ways of creating that positive experience when people have less opportunity to enjoy the perks of whatever the physical work environment has to offer.

Some of the biggest challenges for human resources teams over the last couple of years have been supporting employees who may feel isolated by having to work remotely, and helping them cope with the stress from the pandemic and changes at work and avoiding burnout.

These challenges can be addressed by focusing on the top three findings in research by Bersin into what makes for EX excellence now:

A focus on trust, transparency, inclusion and care
A supportive culture
Equitable rewards and building communities at work

In a remote or hybrid world, inclusive and transparent communications will build trust with employees and demonstrate care. Using technology, such as a talent marketplace to democratise career development and allay remote employees' fears about proximity bias (favouring employees who are more visible to senior leaders in the office) is one way of creating equitable experiences for remote and office-based employees.

Providing a supportive culture in a remote environment also needs to be more intentional. In previous settings, where a manager may have been in the same location as their direct reports, a quick 'thank you' for a piece of work, an informal check-in or a catch up over a coffee was a straightforward thing to do. Now, line managers need to make sure they are allocating time for this.

Recognition in particular is vital to creating a positive employee experience. The Employee Experience Index from IBM identified that when employees receive recognition for good work, 83 percent of them report a more positive employee experience.

Unfortunately, a recent UK survey revealed that nearly one in four employees are rarely praised by their manager - and 15 percent say they receive no recognition at all.

As the research on Job Embeddedness shows, creating links to others and making it harder for employees to sacrifice these is an important component of making the employee experience pay off for employers by improving employee engagement and reducing turnover. This is where equity and building communities play a role.

During the pandemic, most teams will have had some sort of virtual social gathering - and these are still important to keep people feeling connected. But there are other ways to improve equity and sense of community too.

remote engaged employees

We've talked about the importance of technology in employee experience, and the need to overcome proximity bias. Hybrid meetings are likely to be here to stay, and now is the time to raise your technology game to blend remote participants into in-person meetings. The days of the 'squawk box' on the conference room table and people saying 'Can you move the microphone closer to the person speaking' are gone. This article from HBR provides a great summary of how a hybrid meeting can operate - and new options such as Zoom's Smart Gallery or Spatial Chat can help.

The pandemic has also led many organisations to look at the benefits and perks they offer. Measures offered in the early days of the pandemic, such as providing ergonomic office furniture, office equipment and additional time off for caregiving are now likely to become more permanent. Other enhancements, such as reviewing sick pay, offering more flexibility in how and when people work and introducing other wellness programmes all help to make remote working more equitable and build better employee experiences.

Finally, communities can be built remotely using some of these tools and technologies. Many existing Employee Resource Groups (ERGs) have already adapted to virtual environments. Organisations can also foster greater compatibility between employees' and the organisation's goals and values by building communities around wider social, environmental and charitable aims. For example, instead of a collective volunteering day, remote employees can volunteer, fundraise or support causes important to them on an individual basis, while connecting with like-minded colleagues online.

the disproportionate importance of onboarding and induction

Employee experience spans the whole employee lifecycle from first day to last; and nowhere is it more important than on day one.

In the ongoing war for talent, you've had to fight hard to find the right person and nurture that candidate to accept an offer. They've probably had other options and have chosen you because of a promise you've made about the employee experience. Now you have to deliver.

For a new employee starting remotely, there's even more pressure on the organisation to provide a positive experience when the new joiner might not even be leaving their home to attend their first day.

And the stakes are high. Workday found 30 percent of people have left a job within the first 90 days. But creating a strong onboarding experience has been shown to set new employees up for success. Research from the US found that when employees have a structured onboarding programme as they join, they are 58 percent more likely to still be there three years later. And participants in structured onboarding experience 50 percent greater new-hire productivity.

Employee experience leaders should focus on fine tuning all the processes involved. Whether remote or workplace-based, access, logins, providing equipment, PPE, manager and team introductions should all happen without any hitches. Nothing about the onboarding experience should make the employee feel like the organisation was surprised they were starting.

The caring and supportive culture should be apparent from day one and continue throughout. Most induction programmes last less than a month, but research from Booz Allen Hamilton shows that longer induction programmes can increase new hire retention by 25 percent.

A successful onboarding experience should cover the following elements as early as possible in the process, and then build the links and sense of fit that we know are so important in generating engagement:

Can the employee access and competently use all the tools and applications they need to do their job?
Does the employee know where to go to get support or additional resources if required?
Has the employee been made to feel part of the team - whether remote or workplace based?
Does the employee feel supported by their manager and have clarity on what their key performance indicators will be for ongoing performance conversations?

a word about exits

Even with the very best induction, every employee will transition out of the organisation at some point. How this final stage of the employee lifecycle is handled is another of those key moments that shapes the employee's perception of their overall experience.

With the exception of dismissals for misconduct, every departure should be handled with care. Your alumni become powerful ambassadors for your employer brand and can help help or hinder your talent attraction efforts based on how they talk about their experience with friends and family, or on company review websites.

Where the separation is involuntary, providing high quality outplacement support can be particularly beneficial in mitigating the risks of reputational damage and making the final employee experience a good one.

employee experience resources

finding the resources you need to provide a stellar employee experience

While responsibility for employee experience and creating an engaged workforce is likely to sit with HR leaders, the additional resources you need to craft an outstanding employee experience framework are probably already sitting in your organisation.

There will already be some analytics capability the HR team can access to gather insights from employee feedback and exit surveys, but there are two other sources of expertise beyond HR that you can probably tap into.

Any work your organisation has done on the customer experience will have addressed some of the same issues. After all, your employees are internal customers for several other business functions, including HR, IT and Internal Communications. That customer experience expertise is likely to sit in Marketing or Operations and these teams can be useful allies in creating process maps and designing the employee experience framework - basing it on similar work they will have done for external customers.

The second area of expertise you can draw on is likely to sit in Product Development, R&D or an Innovation team. This is design thinking.

Design thinking is a process of 'learning by making' - prototyping and testing ideas to learn what works before implementing a solution. This is an approach that HR rarely uses - in Deloitte's 2017 Human Capital Trends Report, only 10 percent of organisations said they understand or use design thinking as part of the employee experience, and 48 percent of respondents described their understanding of the concept as 'weak'.

Yet it is a relatively easy concept to make use of. In a seminal TED talk, design thinking pioneer Tim Brown describes a healthcare company using design thinking to improve patient experience. The brainstorming and rapid prototyping process they went through would be easy for a project team to transfer to improving employee experience.

conclusion

Employee experience is a wide ranging topic that spans not only the entire employee lifecycle, but also many business functions and stakeholders. It is an area that is becoming increasingly important in the war for talent and in engaging and retaining employees.

Because employee experience touches every stage of the employee lifecycle - from first day to last - employers need to take a holistic approach to managing it. While there is no magic bullet or single tool that can address every aspect of employee experience, integrated solutions, such as the talent mobility services we offer, can support organisations that are striving to create a differentiated employee experience for their people.

If your organisation is looking to implement or improve onboarding coaching, career development, a talent marketplace platform, or redeployment, outplacement and career transition services, contact us to discuss how we could use our experience and expertise to help.