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How Employee Experience Can Boost Revenue

Forbes magazine recently declared 2018 “The Year of Employee Experience.” With unemployment at an all-time low, recruiting is more challenging than ever. Forbes’ writer, Denise Lee Yohn, asserts, “Offering a superior EX can give employers a competitive advantage in attracting recruits to them and then engaging them in ways that encourage them to stay with their organizations.”

That’s quite the exuberant declaration. But what exactly is employee experience? Well, it depends. Definitions can vary from company to company. Essentially, however, employee experience is the aggregate of all the touchpoints an employee has during their entire trajectory with your organization – from the initial contact with a recruiter, to their first day, to the exit interview.

Jacqueline Vonk, Employee Experience Manager at PayScale, elaborates further: “Employee experience focuses on the physical, social and operational environments that collectively impact employees and their relationship with their workplace. The heart of our work is bringing our company culture to life through designing and nurturing these spaces.”

In today’s highly competitive market, companies can derive a competitive advantage for themselves by focusing on the employee experience. To get employee experience right, it’s important to focus not just on programs and events, but also how you communicate with your employees, especially when it comes to matters of transparency and compensation.

Employee Experience as a Parallel to Customer Experience

UserTesting defines customer experience as “providing a useful, usable, and enjoyable experience to every customer, on every device, across every touchpoint — in a way that fulfills on the expectations that you set and the promises you made.”

Businesses have long been aware of the value and benefits of customer experience. By doing research and gathering data, companies are able to take those findings and develop new and useful products and/or services that provide the best possible experience. Providing a positive, pleasant experience is paramount. They know that frustrated customers are unlikely to return.

Many organizations are applying the core principles of customer experience to employee experience programs. Take onboarding, for example. Think of it as the first post-purchase customer support call for your employees.

There’s nothing worse than having “buyer’s remorse” after a major purchase. Onboarding is one of the first opportunities a company has to set expectations with the employee, reinforce the company culture and identify resources the employee needs to do their job.

Some companies, like Adobe, have gone even further, and unified their customer experience and employee experience teams into one single department. This strategic alignment enabled Adobe to be more driven around customer success. Their efforts yielded a 25 percent year-over-year annual revenue gain and net income growth of 45 percent.

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Why Employee Experience Matters

A report by Bersin, titled Employee Engagement: Market Review, Buyer’s Guide and Provider Profiles, revealed that organizations spend an astonishing $720 million per year on employee engagement, including both programs created both internally and externally.

The same Bersin study estimates that a mere 50 percent of the potential market for employee engagement programs has been tapped so far. Many more organizations have expressed interest in developing their own programs. Bersin projects that ultimately, upwards of $1.53 billion will be spent on employee engagement.

So, is the investment worth it? If you have any affinity for words that begin with the letter “R” such as recruiting, retention, reputation and revenue, then the response would be a resounding yes.

Recruiting: Recent data demonstrates that 75 percent of recruiters believe recruitment would be easier if an employer was well-positioned in the market. While 40 percent of applicants said they were more likely to apply for a company they were familiar with.

Retention: Employee retention is heavily influenced by employee engagement. A study by Globoforce demonstrates that employees with less positive experiences are more than twice as likely to say they want to leave versus those with much more positive experiences (44 percent vs. 21 percent).

Reputation: Like it or not, both current and former employees alike are brand ambassadors of your organization. Potential employees have vast amounts of information about employee experience available online at their fingertips. Your employee experience programs (or lack thereof) will leave an indelible mark on people, even long after they’ve left your organization. How do you want to shape that narrative?

Revenue: Employee experience programs can have an effect on your company’s bottom line. According to a Gallup study, companies with highly engaged employees outperform their competitors by 147 percent. Another study shows that stock prices at companies that have employee engagement programs tend to be higher.

According to a Gallup study, companies with highly engaged employees outperform their competitors by 147 percent. Click To Tweet

Trends in Employee Experience

When it comes to employee experience programs, the possibilities are endless. They need not be expensive either. They could anything from team building experiences such as volunteer days that feed the soul, or pizza Fridays that feed the belly.

Some companies take a different approach to employee experience. They might use incentives and gamification as a motivator to increase engagement, through prizes, bonuses, awards and other incentives. Turning work into a game or friendly competition can motivate your employees to do their best while having fun.

Not Just Trendy Perks

Whichever method you use, it’s important to be attuned to your employees’ needs and which perks are important to them. Things that were once considered office staples, like ping pong tables and kegs, don’t resonate with everyone. In fact, according to a Qualtrics study, 80 percent of millennials regard in-office perks the least important benefit when considering a new job.

Authenticity Matters

Jacqueline Vonk, Employee Experience Manager at PayScale, provides some insight into authenticity:

“With people-work there is never a ‘one-size-fits-all’ approach, and there shouldn’t be. Early in developing EX strategy and programs at PayScale I learned that asking questions with the intent to understand the reality of life at PayScale for every employee was key.”

It’s about growing and scaling what working within your organization, and changing what isn’t working. It’s important to ask for feedback.

Alignment with leadership is also paramount to the success of an employee experience program. She explains, “When leadership understands the potential of leveraging EX to impact retention, engagement, productivity and brand, you find yourself designing these spaces in a cohesive, fluid way. In my experience, getting curious about the unique needs and styles of each team has unearthed the most potential.”

Fair Compensation at the Heart of Employee Experience

Sure, pizza, games and volunteer days are great. But when all is said and done, employees are there for a paycheck. They want to know that they’re being paid fairly and equitably. Your company’s pay brand is how your current and potential future employees feel about the pay at your organization.

Your pay brand is not only shaped by the way you pay (including how much and why), but also by how you talk about pay with employees. It’s important that your managers feel comfortable having open and transparent conversations about pay with their teams. Otherwise, they might be at risk for dissatisfaction and quitting.

Closing

Ultimately, it’s up to you to decide what employee experience is and how to make it better. Focus on listening to your employees and what is important to them. Get feedback from peer organizations with existing programs. Finally, listen with an open mind and experiment.

Just remember the four R’s. By building an effective employee experience program, you can improve recruiting, retention, reputation and revenue.

Conrado Tapado
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