What Is Employee Experience and Why Does It Matter?
For organizations to get the most out of employee experience (EX), they must learn how to listen to their employees and implement a strategic framework for each stage of the employee life cycle.
So, what is employee experience and why does it matter? Find out in this in-depth guide.
What Is Employee Experience?
Employee experience is the totality of a person’s interactions with an organization — from pre-hire to post-retirement. It encompasses everything from the candidate experience to orientation and onboarding, ongoing development and separation or retirement.
Employee experience also concerns how employees feel about their work, their job satisfaction and engagement with the organization.
Is Employee Experience the Same at All Companies?
Iqbal Ahmad, founder and CEO of Britannia School of Academics, said employee experience tends to be relative. The definition of employee experience will be different for all companies.
So, when assessing EX, it’s important to look at industry norms.
Think of a pilot at an airline company: How long of a break should a pilot get between two long-haul flights? “If the industry norm is 12 hours, you can only claim to deliver an improved employee experience if you allow a break of more than 12 hours,” Ahmad said.
The Employee Experience Life Cycle
Employee experience includes everything a worker does, sees, learns and feels at each stage of the employee life cycle.
Gallup outlined seven imperative stages, including:
This is the recruitment or pre-hire stage. Companies should consider how long it takes to hire, the rate of offer acceptance and the quality of the talent they attract.
Ask yourself: Are your job descriptions clear and accurate enough to catch the eye of exceptional candidates? Was your interview process streamlined and engaging? Did interviewees understand the next steps in the process?
This is the hiring process stage, during which the company selects the best applicant for the position and relays an offer.
Ask yourself: Did leadership’s top choice accept the role? Did the candidate have any further questions or clarifications about the position or company?
This stage includes initial orientation and training for the position. The new hire will learn about the systems, tools and processes they will be working with. This stage is also a chance for them to meet colleagues and learn about the collaboration process.
Ask yourself: How quickly does leadership effectively onboard and train new candidates? How does the company communicate culture?
During this stage, business leaders should look to build upon employee strengths and establish purpose. The employee should feel that they fit in with the company culture and have a connection to the brand.
Ask yourself: Does the employee work well with others within the team? Does the person communicate effectively with direct managers? What areas require more training and development?
By this point, an employee should be fully established within their role, be able to perform all job duties and meet expectations.
Ask yourself: Does the employee struggle to meet expectations, and if so, why? Does the employee require different tools or training to complete job duties? Does the employee show active participation in company culture?
Employees don’t want to stagnate in their careers — they need opportunities for growth. This might include in-house training to learn new skills and move up the corporate ladder or outside educational opportunities.
Ask yourself: Does the employee show an interest in learning new skills or attaining a higher position? Has the employee asked about new educational opportunities?
Sooner or later, an employee may decide to leave the company. They may retire, move to another organization or face a significant life change. Or, the company may determine that the employee — or the role the person occupies — is no longer needed, whether due to performance, downsizing, technological advances, etc.
Ask yourself: How does the employee convey their experience during the exit interview? Do they offer a two-week notice or leave immediately? Do they continue to act as a brand ambassador once they leave?
Every one of those stages provides opportunities for leaders to ask questions that inform about the employee experience overall and where gaps may need to be filled or improvements made.
Related Article: Employee Journey Mapping: How to Get Started
Benefits of a Positive Employee Experience
Happy, engaged and satisfied employees contribute positively to a company’s bottom line. Yet, only 43% of companies actively measure employee experience, according to BambooHR.
The benefits of a positive employee experience include:
Improved Employee Retention
The biggest benefit of employee experience management is employee retention, said Dave Sayce, founder and CEO of Compare My Move. Research from McKinsey backs this up, showing that people with a positive employee experience are eight times more likely to stay with a company.
“If your employees feel happy and valued in their workplace, they will be more likely to remain in your business for a longer period,” said Sayce.
Beyond feeling happy and valued, employees also want a workplace where they feel they fit in, align with the culture, understand their roles and responsibilities and can achieve work-life balance. A targeted employee experience strategy allows organizations to achieve these ideals.
Greater Talent Recruitment
People, both customers and employees, talk. And word gets around. Employees who love their experience with a company will tell other people about it — people who could become future candidates or customers.
Having that type of positive word-of-mouth reputation comes with a lot of benefits, especially in regard to talent recruitment. A business known for excellent employee experience will likely see more people apply to open positions and attract top industry talent.
Increased Employee Engagement
Do you measure your employee engagement? The McKinsey study shows employees with positive experiences have 16 times the engagement levels of employees with negative experiences.
Employee engagement refers directly to an employee’s emotional commitment to a company, its goals and the employee’s role within. Workers who feel connected and committed to a company are more likely to love their jobs, bond with their teams and put in the effort to achieve company successes.
Increased Workplace Productivity
A positive employee experience leads to increased employee engagement, and higher engagement leads to increased productivity. In its research, Gallup showed that businesses with top employee engagement levels saw 18% higher productivity rates than businesses with poor employee engagement.
It makes sense: employees who love their jobs and the company they work for are more likely to work harder to contribute to the company’s overall success. They’re also more likely to collaborate with teammates, breaking down knowledge silos and completing projects faster.
Improved Customer Satisfaction
A good employee experience will lead to a better customer experience. Why? Because happy employees are not only in a better mood, they are also more invested in the company’s products and services.
A study from Glassdoor revealed a link between customer experience and employee experience, showing companies that perform well on employee experience metrics tend to perform well on customer experience metrics. The study suggests that improvements made to drive employee satisfaction and happiness will have a direct impact on customer satisfaction.
Increased Company Revenue
Businesses may not realize it, but unhappy workers cost a lot of money. A good employee experience, on the other hand, can have a positive effect on the bottom line.
Consider, from Gallup data, that happy, engaged employees lead to:
- 23% higher profitability
- 28% reduction in theft
- 81% reduction in absenteeism
- 41% reduction in quality defects
- 64% reduction in safety incidents
Related Article: Pinpointing the ROI of Employee Experience
Why Is Employee Experience Important?
Right now, people with skills and experience are in high demand, and a competitive salary is no longer enough to attract talent, said Ahmad. “It’s imperative that employers show competitiveness in terms of what experience they are offering their employees.”
If you want employees to give their very best to your business, he said, they must feel motivated, respected, valued and inspired. Employees with positive experiences can “deliver a much better service to your customers and become a much better face of your organization,” Ahmad said.
How to Improve Employee Experience
Despite the proven benefits of a positive employee experience, only 13% of employees are satisfied with their experience, according to Gartner.
It’s not too late to develop an employee experience model within your organization. The steps below outline the best ways to understand your staff and ensure employee satisfaction.
1. Understand Individual Motivations
When employers think about motivating employees, they often break it down into rewards (bonuses, promotions, etc.) and penalties (disciplinary action, pay cuts, etc.), said Ahmad. But every employee is motivated differently.
Some people are intrinsically motivated, which means their performance is hardly influenced by rewards or punishments. Others are extrinsically motivated and are likely to perform well with such a system. Yet, even extrinsically motivated employees will be motivated by different kinds of rewards or punishments.
To help, Ahmad recommends two methods to assess the needs of individual employees:
Maslow’s Hierarchy of Needs
Maslow’s Hierarchy of Needs is a motivational theory that utilizes a five-tier model of human needs, including:
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- Love and belonging
The concept argues that needs lower down on the hierarchy must be satisfied before one can attend to needs higher up.
Vroom’s Expectancy Theory
Vroom’s Expectancy Theory states that individuals act when they expect positive results from their actions. As such, one chooses their actions based on the expected outcomes. This theory, when used as a management strategy, breaks down into three steps:
- Valence: Leaders must understand what employees value.
- Expectancy: Leaders must determine what resources, training or supervision employees require.
- Instrumentality: Leaders must ensure they fulfill promises of rewards and that employees remain aware of rewards.
“Regardless of what theory or approach you adopt,” said Ahmad, “remember that a major chunk of the employee experience depends on how you have kept them motivated throughout their tenure with you.”
2. Establish Effective Communication
“Communication is key to a great employee experience,” said Sayce. Communication, he said, allows employees to understand their roles clearly and where they stand within the company.
Organizations must make it a priority to establish clear and frequent communication with staff regarding roles and responsibilities, pay and benefits, internal structural changes, product updates, company successes and anything else that impacts workers.
Sayce added that listening to employee feedback — and implementing it where necessary — is also an essential part of this communication strategy. “If employees are providing feedback that’s being ignored, this will negatively impact their employee experience.”
Set up an open-door policy so that employees feel comfortable coming forward with questions or concerns, and keep the lines of communication open by holding regular team meetings and one-on-one check-ins.
3. Streamline Policies and Procedures
We’ve all had a job with a series of complex policies and procedures scattered all around the organization, said Ahmad. Employees have to learn various applications and software, and frequently switch from one to the other.
“The organizational hierarchy is also often unclear with conflicting instructions at times," said Ahmad, “or the actual job role turns out to be different from the formal job description.”
All of this has a negative impact on employee experience. Not only does it make life harder for the employee, but it brings about confusion in terms of what to do and how to get it done.
Ahmad recommends streamlining all HR-related matters, with a manual that acts as a single reference point. When creating this manual, he said, identify protocols that add little to no value — but cause confusion and distress — and eliminate them.
4. Create a Safe and Healthy Company Culture
Employers often focus on short-term measures to fix employee-related issues, said Ahmad.
“They learn of an experienced and productive employee resigning and they want to offer them a pay raise to make them stay,” he said. But this short-term solution does not identify the root cause of the problem. “This is reactive and not proactive.”
Instead, Ahmad recommends business leaders put time and energy into making the company culture safe and healthy. Leaders can do this by:
- Establishing comprehensive new hire onboarding and training
- Providing opportunities for socialization and collaboration
- Setting clear boundaries and expectations
- Establishing diversity and inclusion initiatives
- Celebrating team and company successes
“Such a culture cannot be faked, and it has to reflect in every single action and word of the leadership,” said Ahmad.
5. Promote Employee Wellness
Many companies look to improve the employee experience with wellness programs — focusing on both physical and mental health.
Others set up employee resource groups (ERGs), which promote social activities, diversity and bonding between employees, as well as work-life balance and mental health. It’s not unusual for employees to lead these groups themselves.
Wellness programs and ERGs might include initiatives like:
- Free or discounted gym membership
- A parental support group
- Free healthy food in-office
- Financial planning workshops
- A monthly employee movie club
- Discounted mental health counseling
6. Praise Employee Performance
No one wants to hear only the bad from their boss — they’ve made a mistake, missed a deadline, arrived five minutes late, etc. While it’s important to address problems when necessary, employees need to hear the good, too.
Look for ways to appreciate the effort and impact of each individual employee. Ask for peer feedback and recommendations. For instance, allow employees to nominate one another for employee of the month.
Focusing on team wins and individual achievements is especially helpful for remote teams, who often lack a feeling of community with their colleagues and leadership. Publicized praise is great for team bonding and improves the working relationship of everyone involved.
7. Focus on Career Development
According to research from Reworked, only 11% of companies named learning and development as one of their top three priorities for 2022 despite the fact that this area is exactly what employees are looking for in terms of a positive work experience.
Employees don’t want to stagnate within a role or company. They want the ability to learn more, take on additional responsibilities, move up the corporate ladder and earn more money.
According to a LinkedIn report, the number one driver of a great work culture is opportunities to learn and grow — followed by a sense of belonging, organizational values and support for wellbeing.
Communicate with individual workers to understand their motivations, career aspirations and what their paths might look like at the company. Offer training and development programs to help employees reach their full potential and facilitate mentorship programs so that employees can learn from more experienced colleagues.
8. Don’t Forget Pay and Benefits
Gallup data shows that 64% of employees named pay and benefits as critical factors in taking a new job. Today’s workers know they’re in a job seeker’s market, and as such, they’re willing to wait for better opportunities.
Employee expectations around benefits are evolving, too, with many job seekers looking for:
- Flexible work: 88% of workers look for positions with flexibility in hours and location.
- Generous PTO: Today’s workers prioritize work-life balance and want the ability to schedule time off without taking a hit in pay.
- Health benefits: Employers need to offer more than the basics for medical, dental and vision insurance.
- Unlimited vacation time: 68% of job seekers look for unlimited vacation time when choosing positions.
- Student loan assistance: Employers can help workers bogged down by educational debt while also taking advantage of tax breaks.
- Free daycare services: Covering daycare costs can lift a large strain on working families.
Leadership Should Look to Employee Experience Tools
Establishing and maintaining a positive employee experience can be a complex task. Ahmad suggests looking for a system that centralizes and streamlines the employee experience efforts.
“It’s important for your organization to have an easy to use one-stop solution to deal with all operational needs without undue stress,” he said.
Look for a system that makes communication and task management easy for all team members. The ideal platform will also track working hours, maintain cloud-based records and help manage leads.
If that task sounds too hard — with many companies using dozens or more solutions — look for ways to integrate platforms and consolidate features to one area.