Why EX Matters: The Importance of Employee Experience

In recent years, we have seen many companies invest heavily in one of their most vital assets—their employees. From free lunches to Fun Fridays, relaxed workspaces, standing desks, or yoga/meditation rooms, there’s been a slew of initiatives aimed at enthusing employees and accelerating productivity.

According to a survey by the National Business Group, Health (NBGH), and Fidelity Investments, employers across the country spent an average of $3.6 Million on employee wellness programs.

But here’s the catch: most of these companies focus on perks and benefits. Only a handful of organizations prioritize the employee experience to create a stronger and more meaningful relationship with their workforce. This is not for the lack of trying, though.

The 2020 HR Sentiment Survey proves that Employee Experience is currently ranking as one of the top initiatives for business leaders (50% responders). The problem lies in comprehending the significance of the Employee Experience and accurately mapping it to positive business outcomes. In most cases, employers are employees who are misaligned on what drives good experiences.

Employee Experience is a Business Imperative

The Employee Experience reflects your company’s purpose, workplace culture, and employer branding. (Source: Gallup)

The shift in power from organizations to individuals has led to more and more businesses focusing on improving the journey their employees take with them – a journey called the Employee Experience.

As the new KPI for measuring retention, productivity, and overall performance, the employee experience drives business growth and new customer acquisition. You cannot underestimate its worth!

Let’s make it a little more relatable by using the analogy of buying car insurance.

The Employee Experience Shouldn’t be like Buying Car Insurance

Let’s ask you a simple question—what is the similarity between employee experience and buying car insurance?

Buying a new car comes with the added responsibility of purchasing good car insurance. However, the process of buying one can leave you stressed and overwhelmed.

Somewhere between resisting overenthusiastic sales pitches, comparing hundreds of policies, finding the one with the right price (which doesn’t burn a hole in your pocket), reading the fine print (don’t skip it!), and completing endless paperwork, the buyer is left drained from the insurance buying experience and has little enthusiasm left to enjoy his/her newly insured car.

Similarly, an unsupportive work environment, challenging technologies, mounting work pressure, and strained relationships at the office can leave your employees feeling drained and disinterested in their work.

To counter this, you must provide your employees with the experience that makes them emotionally committed to their work and feel valued. Treat them with empathy, and they will be your company’s strongest brand advocates.

Forbes recommends a combination of physical (workplace), social (relationships), and technological (tools and processes) elements to create a positive employee experience. It involves multiple stakeholders aligned toward creating a holistic workplace centred around the employees as a business initiative.

Why Focus on Employee Experience and How to Prioritize it

96% of HR Leaders say employee experience is becoming more critical. (Source: LinkedIn, Global Talent Trends 2020)

Simply put, employee experience is all about putting people first. Employees are the backbone of a business, and their actions can dictate the rise or fall of an organization.

The kind of relationship they have with employers, the amount of effort they will dedicate to growing the business, and the service they will provide to the customers are dictated by how the company prioritizes employee needs (if at all).

While the most common benefits of investing in the employee experience include customer satisfaction and productivity, there are several other reasons why it is essential and how to prioritize it.

Why it Matters	How to do it Right
Talent Attraction and Retention	Establish trust right from the interview stage and continue building upon it as you map your employees’ journey with your company.
Revenue Growth and Shareholder returns	Treat your employees with empathy, share ownership of the company’s vision and build your credibility to measure the effectiveness of your experience program.
Cohesion and Collaboration	A supportive, cohesive environment helps turn individuals into collaborators who work towards the greater purpose of growing the company.
Enablement and Empowerment	Enable your employees to be their best selves at work with a suitable workspace, social environment, and technology. Empower them to turn this positivity into performance.
Engagement and Work Commitment	Listen to your employees, understand their sentiments, and act upon their feedback to engage them and secure their commitment.
Creativity and Innovation	Improve your technology and processes to help your employees grow, learn, develop, innovate, and upskill through extensive training and career advancement opportunities.
Brand Advocacy	Cultivate a positive culture and inclusive work environment that will evoke a sense of loyalty and turn your employees into your strongest brand ambassadors.

Here's a simple thumb rule to go by—if your employees show up to work and leave in a good mood, if they are dedicated to their work and customers if there's minimal friction within and across teams—then you're on the right path to a transformative employee experience strategy.

Outcomes of Positive Employee Experience

91% said they don’t mind putting in the extra hours if it will help the team/company. Satisfied employees are diligent, loyal company advocates. (Source: Forrester)

A recent LinkedIn report showed the business impact of good employee experience strategies:

Source: LinkedIn, Global Talent Trends 2020

“We believe that if our priority is taking care of our team, they’ll take care of our customers, and the rest will work itself out.” — Amy Rossi, VP of Employee Experience, Expel

Multiple studies conducted by Forbes, Gartner, and Gallup show that while some organizations are still catching up to the trend of appreciating and motivating their employees, others, realizing the value of high-ROI employee experience, are steadily making it to the top of the Best Employer lists, reaping rich rewards.

Outcome	Real-time Examples
Higher Revenue Growth: Increase in revenue is driven by a sense of purpose which translates to improved employee productivity and performance	Following their increased focus on worker safety, aluminum producer Alcoa has seen a meteoric rise in annual revenue to 500% in only a decade.
Improved Employee Engagement: Higher employee engagement translates into employee satisfaction, talent attraction, and brand loyalty	Tech company NVIDIA features high on the Best Employer index with a 75% employee engagement score.
Improved Retention: Improved retention results in companies often being ranked as the best place to work	When Arby’s revamped its employee experience program, its retention rates crossed the 90% mark.
Customer Growth: Better customer EX translates into customer satisfaction and loyalty	Gravity Payments led the employee experience revolution by increasing the employees' minimum wage, resulting in a 300% increase in company revenues.

Towards an Employee-centric Future

To operate in the modern, competitive business environment based on brand equity, sustainable growth, talent retention, and productivity, companies must cultivate a deeper understanding of their employees while continually enhancing their experience based on regular feedback.

The path forward lies in building an integrated experience framework where employees are treated with empathy, valued, nurtured, and instilled with a sense of purpose while working in an inclusive and sustainable environment.

“EX isn’t just fun events. It’s making people feel safe and happy so they can perform their best.” — Wassim Eid, CHRO, Chalhoub