Why the Employee Experience Is Worth the Investment
Companies typically invest in those things that can clearly affect their bottom lines in positive ways. Sales initiatives bring in money (or not), for example. Marketing and advertising efforts can be measured. New equipment can increase productivity, which is then directly connected to profits.
Unfortunately, when we get into the realm of people, companies become more hesitant about their investments. But if a new computer can increase an employee’s productivity, shouldn’t the employee operating that computer also be worth some investment? Happy workers are productive workers, after all.
Providing a positive employee experience isn’t about placating millennials or being trendy. Like a great sales or marketing initiative, it’s about creating a positive and measurable impact on your bottom line.
“Employee experience is a comprehensive organizational environment that is purposefully designed to enable employees to thrive,” explains Rachel Ernst, head of human resources at Reflektive, a developer of performance management solutions. “It represents the ideal intersection between the employees’ and the organization’s expectations, wants, and needs.”
Taking cues from employee experience expert Jacob Morgan, Ernst calls the employee experience “a people-centric way of doing business that encompasses the cultural, technological, and physical environment coming together to create a holistic ecosystem that is beneficial for both the business and employees.”
Don’t Undervalue Your Workers and They Won’t Undervalue You
Many factors play into employee experience. Pay and benefits are the obvious ones, but recognition and rewards can also be key to employee happiness. Workers want to know how their work impacts the company and its mission, and if you don’t tell them, they’ll feel underappreciated. Employees also need to know that your business is invested in their career growth, lest they stagnate and begin to underperform out of boredom.
In addition, employees who don’t feel respected or engaged will be bad for your brand. We live in the age of social media, and everyone has a voice. If your employees use their voices to talk about how badly you treat your workforce, that’s on you. This will certainly impact recruiting initiatives, and may even impact revenue streams.
“In today’s extremely competitive talent market, offering an outstanding employee experience is crucial to attracting and retaining talent,” Ernst says. “Lacking a fulfilling experience in your organization is an invitation for your employees to go looking elsewhere. That loss can jeopardize your brand and, in turn, your company’s success.”
Improving the Employee Experience Costs Less Than Ignoring It
Ernst recommends that, rather than focusing on what improving the employee experience will cost, company leaders ask themselves, “What is the cost of not changing? What is the company currently losing by not making changes?”
“I assure you that the answer to this question is far more money than it costs to invest in a change,” Ernst says.
To get started, companies can survey employees about what they like and what they want to see changed in their organizations.
“Follow up this survey with a set of focus groups to understand more information about the data you’ve collected,” Ernst says. “These focus groups can be run by leaders or strong managers if there are not enough HR employees to help. The pure act of asking for feedback is a signal of investment in your people.”
Following the surveys and focus groups, company leaders should settle on 1-3 main actions they will take based on the information they’ve gathered. These actions will depend on what employees want from the organization, but examples may include:
- Improving the environment through office design and decor
- Implementing new technologies that foster collaboration and innovation
- Setting new policies and procedures that inspire and invigorate employees
Ernst also recommends that organizations educate managers on coaching and developing employees.
“Helping managers understand the value of having high-quality feedback and inspiring conversations is truly key to a great employee experience,” she says.
One common complaint about employee experience initiatives is that the ROI is hard to measure. However, this simply isn’t true.
“Employee experience can have a direct positive impact on revenue, earnings, productivity, retention, customer experience, and absenteeism — key hallmarks of business success,” says Ernst. “The proof can be found in the list of companies that are doing it right.”
This list includes heavy hitters live Amazon, Comcast, Salesforce, Google, and more. According to Ernst, companies that focus on the employee experience have 40 percent lower turnover, are 25 percent smaller in size, and generate about three times more revenue per employee.
“In short, they’re doing more with less, working with smaller but measurably more nimble and effective teams,” Ernst says.