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Modern organizations understand that employee experience is everything — or at least they seemed to understand this when the job market was competitive. But now, as job growth slows and retention is somewhat less of a concern, that commitment to EX appears to be wavering.
In a recent report, Forrester offered a prediction that an EX winter is coming, freezing EX investments in 2024. If true, this will be a fiscally dangerous path for organizations to set out on.
Simpplr's Carolyn Clark explained: “With the uncertainty in the world and the market putting pressure on budgets, many organizations are considering deprioritizing EX programs, investments and technology. And while it's critical to be fiscally prudent, organizations who deprioritize their EX are short-sighted.”
Here are three considerations to keep in mind if you're tempted to rein in your EX efforts.
1. Improving Productivity
Gallup estimates employee disengagement to be costing 8.8 trillion dollars of lost productivity in the workplace globally, shared André Martin, culture strategist in residence at EX agency Joyful and the founder of Shift Space. That’s not something to take lightly — particularly in the current economic environment.
“As leaders continue to search for operational effectiveness and a healthier P&L, they will realize that investment in employees versus cuts will be the path to sustainable growth, especially for their best and brightest talent who will not sit idle as the job market is still strong for them,” Martin said.
J.P. Gownder, VP and principal analyst at Forrester Research, and one of the authors of the report, advises leaning into EX as well. “While we are predicting an EX-recession in 2024, we highly recommend that leaders buck that trend and invest in employee experience. The employee experience thesis shows that high EX — building a workplace with highly engaged employees — drives numerous values for a business.”
We’ve heard many times now that building a workplace of highly engaged employees will ultimately prove valuable — but how? And how can organizations measure this ROI?
Investments made in EX are likely to show up at companies as increased employee retention, high employee satisfaction, lower recruitment costs and home-grown leadership functioning at 110%, said Dean Carter, chief people and purpose officer at Guild.
Gownder elaborates on the benefits of EX by offering four key metrics:
- Higher productivity. More engaged employees bring intrinsic motivation to their work and perform at a higher level than lower EX employees, he said. They also experience more psychological flow states, making deep progress toward their work goals.
- Higher creativity. Similarly, high EX correlates with creativity.
- Lower attrition. Highly engaged employees are far more likely to stay with an organization than lower EX employees. Onboarding new employees is a costly process, and attrition also means that valuable employees leave with their skills and knowledge.
- Better customer experience. Happy employees lead to happy customers.
What’s more, Clark said studies from Harvard and Gallup have shown that strong cultures in companies matter. They bring in more money — four times more — and not by chance. “A good culture in a company means people work better and stay longer. It's simple. The better the culture, the better the work, the more the revenue,” she said.
Related Article: Improving the Frontline Employee Experience Can Unleash Productivity
2. Supporting Employee Wellbeing
Despite having had significantly more leverage in recent years, today’s workers still feel squeezed and unheard. Hope is in short supply, and that is something that Dave Ulrich, a Rensis Likert Professor, speaker and author on the issue of human capital, is working to change.
In an upcoming think tank, Ulrich’s team will explore setting expectations and nurturing hope to build a positive employee experience by identifying their physical, mental and social needs for the future and "turning helplessness into hopefulness,” he said.
It’s a push that’s overdue.
“An estimated 53% of managers are burnt out (CNBC), 40% of employees feel isolated at work (EY), and 75% of Americans are experiencing the ‘Sunday scaries’ (LinkedIn),” shared Martin. “As resilience wanes, the cracks in the employee experience will show and will push investment back to this space out of pure necessity.”
Clark shared additional stats from The American Psychological Association's 2023 Work in America Survey, which says that 77% of workers felt the weight of stress from their jobs. “And more than half, 57%, felt its sting in other ways. It's like a slow burn, leaving 31% emotionally spent,” she said.
For companies, this burnout results in more time spent on hiring and training, and more money spent on recruiting and filling gaps caused by high turnover — not to mention the revenue lost from dwindling productivity.
Related Article: 2023: The Year in Workplace Mental Health
3. Upskilling, Reskilling … and Evolving
There has been a lot of talk about emerging AI capabilities and how they can better support business over time. With that in mind, many leaders are leaning into these new technologies and redesigning their organizations for a new economy. But, as Carter noted, as companies think through how to allocate resources to deploy new tools, they need to focus on augmentation versus elimination to build a more strategic workforce for the future.
“With the deepening labor shortage, foundational support like upskilling and reskilling, and programs that support future-proof skills for hard-to-fill roles will continue to drive value,” Carter said.
The companies he works with are doubling down on EX and thinking strategically about HR investments, like reskilling, that have a clear connection to their business objectives.
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“Investments that drive outcomes will be prioritized in places where tight budgets rule the day, and leaders will be challenged to spend more time seeking new, meaningful ways to measure impact,” he said.
Martin sees EX being augmented and impact measured in new ways as well in the coming years, particularly as workers become more discerning about their prospects. In fact, he predicts the age of companies promising employees that they will ‘leave healthier than when they came in’ will soon be upon us, and that this standard will completely overhaul the employee experience for the better.
“We know that growth puts pressure on growth and true transformation requires human energy. More companies will realize that well-being and energy are not nice-to-haves; they are true levers of sustained growth — just ask any elite athlete in the world,” he said.
Regardless of how EX expands, the consensus tells us that its growth is inevitable long-term, even as an EX winter blankets the landscape. The season of decrease will not be sustainable and, as Clark shared, organizations betting otherwise “will wake up on the wrong side of the history of the looming talent shortage.”
“Preserving and enhancing employee lives isn't a luxury. It's a strategic imperative,” she said. “And we’ll see which companies heed this wise advice in the coming months.”
