Feature
It wasn’t so long ago that employee experience was at the center of HR technology vendor messaging. In 2019, SAP SuccessFactors’ then-CEO Greg Tomb said his company would begin treating “human capital management” as “human experience management.” The focus on experience was the biggest trend SAP saw in HR, he explained at the time.
Times have changed.
Today, artificial intelligence dominates HR conversations, with 92% of HR execs planning to increase their use of AI, most of them in the next 12 to 18 months.
That begs the question: What happens to priorities like employee experience when they aren’t so prioritized anymore?
Confronted with waves of AI-related challenges and precarious economic conditions, businesses are quietly backing off their commitment to the idea that strong experience is the foundation of an engaged and committed workforce.
Industry analysts believe such thinking will continue in 2024. Forrester VP and principal analyst J.P. Gownder, for example, predicted the emphasis on employee experience will soften even though the use of AI could improve experience and drive business growth at the same time.
Indeed, while most employers plan to invest in EX/HCM software this year, they’re doing so to improve efficiency, not to strengthen their experience efforts and outcomes. “This will create an opportunity for companies that consciously choose to zig toward EX while so many others are zagging away from it,” stated Forrester.
Onset of Winter
With that in mind, Gownder noted three areas whose dynamics will be worth watching this year:
- Employee Engagement: Efforts to improve engagement and strengthen culture will be deemphasized as budgets become more competitive and leaders turn their attention elsewhere. The result: an “EX winter.” Between 2022 and 2023, engagement fell from 41% to 37% while “culture energy” dropped from 63% to 59%. Forrester believes that downward movement will continue in 2024, with engagement ending up at 34% and culture energy at 55%.
- DEI: The number of companies with a DEI function and an organizational strategy declined from 33% in 2022 to 27% in 2023. During 2024, Forrester expects that to drop even further, to 20%. A number of businesses will pursue their DEI efforts through “check the box” efforts more than anything else, the firm believes.
- AI and Recruiting: While AI’s impact will be felt across HR, its effects will be particularly acute in recruiting. Already candidates are using AI to spam employers while recruiters use it to screen a large and often-unruly pool of applicants. “Misconnections, mischief and mayhem” are sure to follow, Gownder said. “At least one well-known company will hire a candidate who doesn’t actually exist, and at least one well-known company will hire a candidate for a job that doesn’t actually exist.”
None of this means employers are turning their backs on experience. Rising healthcare costs and general stress are forcing them to prioritize at least some softer workforce issues. For instance, 51% of employers still regard employee satisfaction as their most important goal, according to the Integrated Benefits Institute. That’s followed by cost mitigation/revenue generation, at 41% — a 10-point difference.
And employers still pay close attention to how their workers respond to health-related benefits, IBI said. Some 72% collect data on satisfaction and 57% on retention. Fifty-two percent link health and wellness to productivity.
Related Article: Forrester Predicts an EX Winter Is Coming. How to Prepare
Demographics Change Perceptions
The labor market’s changing dynamics are also driving the fluctuations in employer priorities, Gownder told HR Dive. Employers tend to put money into experience-related projects “when there’s a lot of attrition or things are going poorly on the employee front and they can’t keep talent,” he said. Today, employers “aren’t so desperate to keep people.”
At the same time, what’s valued by workers is changing along with demographics, IBI noted. Employees between 30 and 45 years old were most interested in work-life balance (28%), financial well-being assistance (19%) and health education (18%). Those over age 46 were most interested in preventative screenings and financial assistance. Workers under 30 were focused on balance and flexibility, along with fitness and wellness programs.
To address such changes, IBI suggested employers reevaluate policies and programs to ensure they align with objectives around productivity, growth and efficiency, as well as offer training and support for managers. It also recommended streamlining point solutions, plan offerings and policies to reduce confusion.
Experience continues to matter on the micro-level, as well. A significant portion of job seekers abandon the hiring process because of a poor experience, according to a recent Greenhouse survey. The company’s 2023 Candidate Interview Experience Report found that poor communication, negative interviews, vague job descriptions and ignored questions about pay all push candidates to seek their opportunities elsewhere.
Over one-third of job seekers admitted they'd ghosted employers during the hiring process, largely due to the company being different than expected and poor interview experiences.
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The bottom line: Experience may not be as hot a topic to employers as it was a few short years ago. But workers and candidates still care about how they’re treated — and they make their career decisions accordingly.
