Far from being the latest buzzword, employee experience is turning into the key element of the future-proof workplace. It’s time to change the outdated 20th century mindset that dismisses employees as dispensable and infinitely replaceable and instead recognize that business is all about people.
The employer-employee relationship has changed. While the employer had the power in the last century, that balance is shifting in this century, and potential employees are being choosier about which opportunities they accept.
Just as user experience is driving the digital interface, and as customer satisfaction programs morph into the customer experience, we need to refocus our people strategies to improve the entire employee experience. Forward-thinking organizations are broadening their focus from engagement and culture to a holistic perspective that considers an individual’s experience before, during and after a career within the company.
It’s not an isolated phenomenon: Deloitte reports that the attention on employee experience is gaining momentum. While organizational culture, engagement and employee brand proposition remain top priorities, employee experience ranks as a major trend:
- 80% of executives rated employee experience very important (42%) or important (38%), but only 22% reported that their companies excelled at building a differentiated employee experience.
- 59% of survey respondents reported they were not ready or only somewhat ready to address the employee experience challenge.
What Is the Employee Experience?
It starts before you even join an organization and continues long after. It’s inclusive rather than exclusive, and answers three critical questions for each person:
- Future employee: Why would I come and work for your company?
- Current employee: Why do I choose to stay at this company?
- Former employee: What do I tell others about my time at your company?
The employee experience is the sum of all employee interactions with his or her employer, in and outside of work, and is influenced by many things, including:
- Relationships: Quality of the connections and interactions with coworkers, bosses and customers.
- Workspace: The physical environment in which an employee works.
- Culture: How an employer demonstrates its commitment to the physical, emotional and professional success, as well as the health and financial wellbeing, of its employees.
- Technology: The tools and technologies an employer provides to help employees get their work done.
Is Experience the Same as Engagement?
Well, not really. It reminds me of the statement, “All Hoovers are vacuum cleaners, but not all vacuum cleaners are Hoovers.” In a similar vein, “All employee experience programs consider engagement, but not all engagement programs consider the employee experience.” Clear?
Despite all the care, attention and resources lavished on employee engagement programs since it first came to prominence nearly 30 years ago, the needle has barely moved. Engagement numbers remain abysmally low. Gallup reports that 87% of employees worldwide are actively disengaged and that employee disengagement costs in the United States alone run in the range of $450 billion to $550 billion annually.
The challenge is that engagement scores are a snapshot in time, often completed annually (or less frequently), and many factors influence the results. For example: “Did I get my bonus last week?” “Do I like my boss?” “Are we doing yet another reorganization?” Engagement scores are a lagging indicator of your employee experience efforts. If you aren’t investing in the holistic experience, then you’ll forever be playing catch-up.
It’s time for a new approach — one that builds on the foundation of culture and engagement to focus on a more comprehensive employee experience, considering all the contributors to worker satisfaction, engagement and wellness. This can help create a place where people want (not just need) to go to work each day.
The employee experience is not what you hope employees think about your company — it’s what they actually say to their family, friends and, perhaps more importantly, the world.
In researching our book, The Future-Proof Workplace, Dr. Linda Sharkey and I had the opportunity to interview leaders around the world about their experience of organizational cultures, both good and bad. We heard tales of inspiring workplaces that enabled employees to thrive and of the toxic environments that crushed motivation and left careers in tatters. In our work with business leaders and teams around the world, we find too many companies are missing out — still operating according to 20th-century mindsets, practices and technologies.
Heather Scallan, senior vice president of Global Human Resources at NTT Security, said, “It’s putting the employee in the driving seat. Successful businesses think deeply about their customer/client experience, and we need to think about our employees in a similar way. The competitive talent marketplace demands that organizations do everything they can to make the employee experience as positive as possible. It’s no longer just a differentiator; it is fast becoming a requirement.”
Understanding and improving the employee experience is critical for companies operating in a highly competitive global economy. The skills shortage across industries remains an ever-present challenge. As Dan Pink observed, “Talented people need organizations less than organizations need talented people.” Providing an engaging employee experience helps companies succeed in attracting and retaining skilled employees, and research shows a strong employee experience also drives a strong customer experience.
Sir Richard Branson has a reputation for building companies around happy and engaged workforces, and as Chris Boyce, former CEO of Virgin Pulse, wrote, “Your employees are your company’s real competitive advantage. They’re the ones making the magic happen — so long as their needs are being met.” It’s common sense, but with an uncommon discipline.
The employee experience is the sum of all employee interactions with his or her employer, in and outside of work, and is influenced by many things, including relationships, workspace, culture and technology.
Do You Have the Culture You Want or Deserve?
A strong employee experience influences more than just your engagement numbers or Glassdoor reviews. These are the lagging indicators of employee experience. Jacob Morgan, author of The Employee Experience Advantage, shares that organizations that invest in their employee experience were:
- Included 28 times more often among Fast Company’s Most Innovative Companies;
- Listed 11.5 times as often in Glassdoor’s Best Places to Work;
- Listed 2.1 times as often on the Forbes list of the World’s Most Innovative Companies;
- Appeared 4.4 times as often in LinkedIn’s list of North America’s Most In-Demand Employers; and
- Twice as often found in the American Customer Satisfaction Index.
His research goes on to report that those companies investing in their employee experience “had more than four times the average profit and more than two times the average revenue.” It makes a compelling case for action. If you aren’t actively focused on creating and nurturing your employee experience, you will end up with the organizational performance and reputation you deserve, not the one you want. In the age of smartphones, we are all aspiring paparazzi — just one click away from having your dirty laundry making headline news. Forget the six degrees of separation: In the 21st century, it’s closer to two degrees of connection. If good news travels fast, bad news travels even faster.
Who knew the best companies are people-focused and invest in creating an environment where it’s possible (and even expected) that employees love their jobs? Are your employees in love with coming to work? Do you know what people are saying about your organization?
It’s Not About the Ping-Pong Table
It’s going to take more than bright colors, a ping pong table, or the latest in standing desks to tackle the employee experience challenge.
Silicon Valley firms have long been held up as the poster children for the new-age office, offering a myriad of perks and environments for their employees. Whether it’s gyms, professional kitchens with all-you-can-eat food, gaming facilities, music equipment and sound stages, bean bag chairs and slides, fancy coffee (with baristas), food trucks or concierge services, no wonder people work long hours. Why would they want, or need, to be anywhere else?
It’s certainly helped to attract the talent those Silicon Valley firms need. However, there is hope for the small and medium-sized enterprise. It turns out that these perks may be distractions from what is really creating the high-powered workplace of the 21st century.
The employee experience seeks to create the right environment around the needs of the workforce, rather than trying to fit the workforce around the needs of the work or the building.
Don’t Focus on Exit Interviews
In the past, employee engagement or culture initiatives have been the purview of human resources. It’s a “people problem,” so let the people team handle it. And they did, to the best of their ability, while also juggling learning and development, benefits programs, career mapping and performance management — often as separate projects, each with their own measures of success.
While short-term gains were made, long-term impact was not achieved. As a result, every few years, each initiative was dusted off, rebranded and relaunched. Unfortunately, credibility was eroded each time, with employees rolling their eyes at yet another “unifying” drive.
The key to creating a powerful employee experience is to involve employees in the process and move beyond the campfire songs and (de)motivational posters. Instead, engage the very people at the heart of your business, seek out and listen to the feedback from your employees.
At SendGrid Inc., the key was to identify the opportunities to improve experiences people were having as they tried to do their daily job. According to Pattie Money, chief people officer, “We identified the bottlenecks and barriers, where were systems breaking down and making the job harder than it needed to be, where were managers not building strong relationships or providing the right level of support. We then developed the training and tools to include in their management toolkit that enabled managers to better understand the experience of their direct reports and make the changes necessary to affect the experience in positive ways.”
The key to creating a powerful employee experience is to involve employees in the process and move beyond the campfire songs and (de)motivational posters.
Don’t just focus on exit interviews and why people are leaving. Also analyze the new-hire experience. Why did they choose to join your organization? Who turned down offers and what influenced their decision? What is your onboarding experience like — was a computer and desk ready for your new hire on their first day? Did their colleagues welcome them into the team and help them to integrate into the organization or did they eat that first lunch alone?
We have one client who ensures that a “welcome box” of donuts is on each new recruit’s desk on their first day, which helps to ensure that team members from far and wide stop by to say hello and start bringing the new hire into the fold. How willing are your employees to refer others to join your organization? Think of it as your internal net promoter score.
LinkedIn Corp. and Accenture plc both host HR hackathons, where employees help break down and rebuild the people and HR functions to reflect the work that they really do (and need to do). An effective employee experience isn’t a one-size-fits-all solution. Even though the trend is global, and the focus is organizationwide, successful approaches may vary by geography and region.
We Had It Backward
Twentieth-century HR was largely reactive, but 21st-century HR must become more intentional and proactive. The 20th-century approach to business was to prioritize stakeholders as shareholders first, customers second and employees third. We now realize we had it backward. If we put employees first, they in turn take care of our customers, and they in turn take care of our shareholders. It’s like the safety briefing on an airplane. You must put your oxygen mask on first before you can take care of others.
Today’s organizations need leaders who apply as much effort to the people portfolio as they do the rest of the levers that drive organizational performance. An integrated employee experience is as valuable and can have as much (or more) of an impact as other elements of your corporate strategy.
Understanding the workforce in a more detailed way means we can understand individual aspirations and skill preferences and how these intersect with company values. As a result, we can truly align personal goals with company goals in a very clear way.
The employee experience is far more than an HR initiative: It is a business imperative, one that is influenced and needs to be driven from the top of the organization. Every leader needs to consider themself a chief people officer. I believe that the employee experience is the next big area of investment for every organization. We may be experiencing a digital revolution, but it’s those who embrace the people revolution who will thrive.
I dare you to act. If you can create a future-proof workplace that considers the employee experience, there will be no stopping you.
Morag Barrett is the CEO and founder of SkyeTeam, an international leadership and executive development firm that specializes in working with IT, technology and engineering teams to build and implement their people strategy.