Editorial
According to a recent prediction by Forrester, an “EX Winter” is coming, effectively freezing employee experience investments in 2024. This “winter” is due in part to ever-present uncertainty in the world and financial markets, leading organizations to tighten their belts for economic headwinds that may lie ahead. While it is necessary for companies to balance shorter-term financial responsibility with longer-term health of the organization, responsibility also lies within the Employee Experience function, which must show the value of the programs they steward.
To that end, here are five ways that Employee Experience functions can show their value in order to successfully weather and even thrive despite upcoming conditions.
1. Begin With the End in Mind
The best time to build reliable and valid measures of value is during the design and creation phase of any EX program. Programs should be created for specific purposes and with specific objectives in mind. For example, an organization may stand up a rewards & recognition program tied to specific points of employee tenure, with the objectives of increasing employee perceptions of appreciation and commitment, which may then lower voluntary turnover.
It becomes much more difficult (but not impossible) to measure the value of EX programs where objectives have not been clearly articulated during the design and creation phase. Too often in these instances, a program may have been spun up in a reactionary manner or because a senior leader in the organization was enamored with a recent trend (see the gamification of learning craze of the mid 2000s). In these instances, you may have to either work backwards to determine what objectives should have been during the design phase and set measurements from there. You may also need to take a step back to determine if this program is still worth the investment.
2. Ask, Listen, Analyze, Repeat
At a macro level, a foundational step toward measuring any type of EX program requires a steady rhythm of employee sentiment data that compounds over time. This will likely vary widely between organizations based on their culture, industry, experience and sophistication with employee listening programs.
Organizations with mature employee listening programs seem to gravitate toward models that are more frequent and lighter touch. These models meet employees in the flow of work and build up robust sets of trending data much more quickly than traditional employee listening programs, where employees are asked once or twice a year to fill out large and cumbersome surveys that act more as points in time than a real-time source of employee sentiment.
Regardless of how you measure employee sentiment within your organization, it is important that you do so on a regular basis. This data is critical to measuring the value of individual EX programs, providing you with a snapshot of organizational health and helping you to pinpoint areas for improvement.
Related Article: Watch These HR Analytics to Improve Retention and Engagement
3. Connect the Dots
Once you’ve established a robust set of employee sentiment data, it’s time to begin making connections and forming correlations to other data sources within your organization. A great data source for this purpose is the people data that lives within your HCM platform.
Most HCM platforms house data such as employee tenure, learning transcripts, internal mobility, promotions, performance, talent planning and turnover. They’re all valuable sources of data, that when paired with employee sentiment data, can open up additional curiosities and create a more holistic perspective of the employee experience as well as the impact of specific EX initiatives, even down to an individual outcome basis.
For instance, if someone in an organization were to attend a high-potential leadership course, you could measure and track their individual level of engagement over time, as well as that of their direct reports, to determine if there were a trickle down effect to their team and pair that with the internal movement of the person and their team over time (did they stay in role, move upward, move laterally, move out of the organization, etc.) Whether measuring impacts and outcomes at the individual level or at a larger scale, we show the value of EX programs more accurately and holistically by combining powerful sources of employee data.
4. Speak the Language of Business
Consider your audience. Who are you showcasing “value” to and what is the “language” this group speaks? EX programs are fundamentally investments into an organization and individuals within that organization. Therefore, it can be helpful to frame the “value” of these programs in terms of their ROI — return on investment. This can make the difference between an EX program being viewed as a nice to have during good times versus a must have, even during economically turbulent times.
An example of how you do this is by calculating and establishing a “cost of turnover” metric.
According to Gallup, businesses in the US are losing one trillion dollars a year due to voluntary turnover, with the cost of replacing an individual employee ranging from one-half to two times the employee's annual salary. Direct costs of replacing an individual employee include recruitment costs, advertising for the new position, onboarding and training, severance costs, time spent toward interviewing and time spent toward recruiting. These are all factors that could be agreed upon and calculated internally.
Once established, you could look to a specific EX program and show a real cost ROI if that program has proved to be a successful intervention against voluntary turnover. Conversely, by using this metric to measure against your organization’s current voluntary turnover, you can illuminate the hidden costs associated with voluntary turnover and use that real cost to advocate for the creation of a new EX program to help reduce the costs associated with voluntary turnover.
Related Article: Did AI Take The Wind Out of Employee Experience's Sails?
5. It’s About Hearts and Minds
While we’ve spent the majority of this article covering the more objective and measurable components of measuring the value of EX programs, there is an intangible and not easily measured component that I would be remiss to forget — mindset.
As someone who works in employee experience I find myself frequently playing the role of “EX Evangelist” internally. It’s about influencing without authority, being a positive disruptor and challenging legacy mindsets around the value of operating in an employee-centric manner. For the EX pro, this can be challenging, yet rewarding work. Work that typically requires a strong backbone and a good amount of patience.
The good news, more organizations are seeing the value of EX, and more research is coming out showing the links between strong EX programs and organizational health. For instance, in a recent study around cultural fitness, i4cp found that the healthiest organizations are seven times more likely to be employee focused. In these organizations, people leaders were found to consistently live out organizational values and they were held accountable for employee outcomes such as retention, engagement and career development.
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While it may be reasonable to concede that a season of cooler weather is in store for EX programs, it’s important that organizations don’t allow a cool down to snowball into an ice age of sorts. Those organizations who believe in the tangible and intangible benefits of EX programs will likely use this “winter” as an opportunity to double down on investments in order to differentiate themselves in an increasingly competitive talent landscape.
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