EX 101: What is employee experience and why is it important?
Feeling valued, having a sense of belonging, a clearly defined career path, flexible working hours, beers in the office fridge.
Feeling valued, having a sense of belonging, a clearly defined career path, flexible working hours, beers in the office fridge. As an employee, what makes you excited to go to work in the morning?
What is Employee Experience?
Employee experience (EX) is how an employee perceives, thinks and feels throughout their entire journey with an organisation - including every interaction from researching a company, being attracted to and applying for a job through to onboarding, performing a role, developing and leaving the organisation.
Although directly related, EX is not to be confused with Employee Engagement (EE) - which is how committed and emotionally attached employees are to their work, and the organisation’s purpose and values. Employee engagement is an output of companies being able to deliver a good EX.
Employee Experience is made up of 3 pillars:
Technology: This means the tools provided to employees- including laptops, internal communication channels and platforms to connect with customers.
Physical: This is what you can see, touch, smell and taste in your workplace - including the temperature, the beer fridge, and views out the window.
Culture. This is how the organisation feels - including how empowered employees are, how much they feel valued, and if there’s hierarchy or a flat structure.
In order to create a great employee experience, companies must understand how to accommodate for their employees’ needs and passions. Through listening to what is important to their people. For example, Patagonia offers on-site child care and encourages employees to surf when the waves are good, regardless if in working hours.
Most companies are struggling to understand how they deliver an exceptional experience for their employees - A leading car hire firm has a reputation for giving a generous benefit and holiday package but according to Glassdoor, their poor culture and company values have left employees unsatisfied, and turnover high.
Most organisations face similar challenges, according to Gartner, only 13% of employees are largely satisfied with their experience1. It is important for organisations to understand what makes sense for their employees in the context of the company, as novel ideas are not always necessary to delivering a good experience - after all the thought of surfing for people outside of Patagonia may induce fear and panic and ultimately a poor experience.
It is often assumed that it is HR’s responsibility to change EX as traditionally the focus has been on improving EE, however in order to start seeing the shift in EX, there must be commitment across the entire organisation to making the change. Companies should consider who is responsible for EX, with Air BnB demonstrating the importance of this by appointing a Chief Employee Experience Officer in 2015.
Organisations often focus on understanding employee satisfaction at specific fixed points in time, however, EX is about the entire journey the employee goes through with an organisation - focusing on how the sum of all interactions results in how somebody feels is critical for companies to start making EX improvements.
Employee experience should be driven by the employees, not the company - listening to what your people are saying, thinking and feeling should be how an organisation identifies what isn’t working and what needs to change. EX is a constant and therefore feedback from employees need to be gathered continuously and used as the foundation drumbeat of the organisation - an annual employee survey often doesn’t make a difference to an employee’s experience as there is no iterative ‘you said - we heard - we did - you said…’ feedback loop, leaving people less willing to contribute in the future when little acknowledgement and action has been taken on previous feedback.
Why are companies investing in EX?
A study completed by University of Warwick showed companies with happy employees outperform the competition by 20%, with companies who invest in their employees seeing their revenue double2.
Simply put, people are at the heart of every organisation, meaning the success and effectiveness of a business, is dependent on the happiness of its employees.
Therefore, designing and delivering an outstanding EX is fundamental to the business; to attract and retain talent, increase productivity, strengthen relationships with your customers, enable innovative business growth and impact the bottom line.
EX has proven benefits on a company’s performance with those who rank in the top 25% of EX, reporting nearly three times the return on assets, and doubled their return on sales3. There are also other financial impacts of EX to consider, including the cost to recruit and sick days - with happiest employees taking 66% fewer sick days than those who are least happy4.
Crucially, customers have a better experience as a result of having satisfied employees - meaning it is imperative to build strong employee experience foundations.