What Is the Employee Experience, and Why Does It Matter?

Move over, employee engagement—there's a new buzzword in town. And whether you're leading a small business or a Fortune 500 company, "employee experience" is worth paying attention to. Employee experience is defined as the sum of all employee interactions with your company, from initial application to post-employment communications.

employee experience

The Power Of Employee Experience

It's perhaps easiest to understand employee experience by comparing it to customer experience—a concept your marketing team is extremely familiar with. The customer experience encompasses everything from the commercials your customer sees to the ease of following an instruction manual to the review left online. Similarly, the employee experience is holistic, taking into account everything from the physical work environment to those pesky, disgruntled reviews on Glassdoor (which your potential new hire has definitely read).

The IBM Smarter Workforce Institute, in conjunction with the WorkHuman Research Institute at Globoforce, defines employee experience as "a set of perceptions that employees have about their experiences at work in response to their interactions with the organization." In a September 2016 report, IBM and Globoforce outlined a means of measuring employee experience through an index of five dimensions:

  •  Belonging: Do employees feel like they're part of the larger team?
  •  Purpose: Do employees understand why their work matters?
  •  Achievement: At the end of the day, does the employee feel a sense of accomplishment?
  •  Happiness: Does the work environment produce a pleasant feeling?
  •  Vigor: Does the work environment offer energy, enthusiasm, and excitement?

Using that index, IBM and Globoforce surveyed more than 23,000 employees in 45 countries and territories. Their research found a correlation between positive employee experience and amount of effort, increased performance, and higher retention. According to the report:

  • Managers tend to have a more positive employee experience (79 percent favorable) compared with "individual contributors" (63 percent favorable), speaking to the importance of involvement in decision-making and perhaps the influence of a good manager.
  • No significant difference in employee experience exists across generations, with 69 percent of Millennials, 68 percent of Gen Xers, and 72 percent of Boomers indicating a positive employee experience.
  • Employees at companies with recognition programs—particularly programs related to core values—are more likely to report positive employee experience (81 percent vs. 62 percent).
  • Working on a team correlates with positive employee experience as well, with 73 percent of those in a team reporting positive employee experience compared with 61 percent of those working as individuals.

The statistic that might draw the most attention in the C-suite, however, is this: those with low Employee Experience Index scores were more than twice as likely to want to leave their current organizations.

Improving Your Company's Employee Experience

So, how do you create an employee experience strategy for your company's needs? Not every company has the resources to devote a senior staff member to employee experience full-time—but even introducing the concept of employee experience to HR and mid-level managers can make a huge difference. Here are a few ideas to get started:

  • Seek out opportunities for employee feedback year-round. An annual survey doesn't cut it anymore. The feedback you receive during candidate interviews, ongoing performance conversations, and exit interviews can all help you measure the employee experience.
  • When making decisions about the business environment and systems, take time to listen to employee feedback. Give employees an opportunity to be part of the solution. Your employees know their pain points, and even something as simple as finding a tech tool to streamline a burdensome expense reporting process can make a positive impression.  
  • Embrace flexible work schedules. The IBM/Globoforce research found that 79 percent of employees reported a more positive employee experience when they felt they had flexibility within their work schedule to meet family/personal responsibilities—compared with 48 percent of those who did not agree they had flexibility.
  • Focus on your employees as people. That sounds simplistic and even corny, but it's just a simple tweak. Couch an employee wellness program in terms of employee wellness—not simply staving off rising insurance premiums. Encourage employees to take time off to recharge, whether that looks like not answering emails on the weekend or actually using PTO.

For good or bad, today's employees of all ages have different expectations for their employers than those of generations past. People are no longer satisfied with simply having a job and some vacation time. With more access to information than ever before, employees have a good sense of the culture and resources available elsewhere—and if they think their employee experience will be better with your competitor, they'll move on. Time to tune in to employee experience.

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