April 30, 2020
Every company would agree that customer experience lies at the heart of their organisation. However, what should be going hand in hand with this, is your employee experience. Employee experience is far too critical to overlook and most business leaders would agree on this. In fact, Deloitte reports that 80% of executives place employee experience of high importance. However, in an ever-changing world with competing priorities, it is often neglected. Here is a reminder of why investing in employee experience should be top of your agenda:
Retention has a serious financial impact on organisations. In fact Oxford Economics reported that it costs an average of £30,000 to replace an employee and an average of 28 weeks to onboard a new employee. There are also other indirect costs such as a lost client relationships and institutional knowledge.
Author Jacob Morgan in The Employee Experience Advantage, states that organisations leading in employee experience have 40% less employee turnover than their competitors. IBM found that nearly half of employees intended to leave their companies due to poor employee experience. Furthermore, the American Psychological Association found that very few employees would leave their jobs if they felt their company was invested in employee experience.
The relationship between employee experience and retention rates is no surprise. It is because of findings like this, that 96% of talent leaders have placed improving employee experience top of their agenda, as a means of retaining talent and growing their bottom line, according to a LinkedIn survey. A good employee experience will enhance the power of your brand to attract and retain talent.
A better customer experience
Your employee experience directly impacts your customer experience. In fact, IBM found that organisations that score in the top 25% on employee experience report double the return on sales compared to organisations in the bottom quartile. Additionally, according to Blake Morgan, companies who experience above average customer experience, have reported that 79% of their workforce are highly engaged in their jobs. MIT research also states that organisations in the top quartile in employee experience, have double the customer loyalty than those in the bottom quartile. Moreover, Accenture reported that companies with highly engaged employees are 21% more profitable than those with poor engagement.
The better your employee experience the better your customer experience. Organisations must spare no expense at creating a company culture of treating their employees well, just as they would with their customers. A specific example is placing the importance of your employees being heard, just as high as your customers being heard. In our recent research study, we discovered that, unsurprisingly, managers do not always feel comfortable about sharing their fears and struggles with HR. Getting honest feedback, without fear of being reprimanded, is a common problem for all employees. Building trust, ensuring anonymity, organising leader lunches whereby employees give constructive feedback in groups and sharing the feedback to the rest of the company, are all ways to ensure your employees feel heard and respected. Again, this will relate back to your company performance. In fact, SalesForce reports that “when an employee feels heard, that they are 4.6 times more likely to feel empowered to perform the best of their abilities.”
The connection between employee experience and company innovation cannot be denied. Forrester’s research states that 69% of creative firms were winners of “best place to work” awards. Harvard Business Review also found that companies who heavily invest in employee experience, are included in the Fast Company’s Most Innovative Companies list, 28 times more than those who do not. Additionally, leaders in employee experience appear 2.1 times more often on Forbes’ list of the World’s Most Innovative Companies.
It therefore comes as no surprise that innovative and well-established companies such as IBM, AirBnB and Cisco, collect employee ideas through collaborative initiatives such as hackathons, in order to spark creativity amongst their employees. Designing an employee experience whereby creativity and feedback from your employees is encouraged, is a powerful driver for business performance.
Engagement and productivity
Last but by no means least is the substantial impact employee experience has on workforce engagement and productivity. According to Gallup, 85% of employees are not engaged at work, despite the fact that organisations spend millions on employee engagement. In fact Gallup also report that this costs companies worldwide, approximately, a staggering $7 trillion in loss of productivity. So why aren’t companies seeing a return on their investment? This is because investment goes towards programs that focus on the short term such as benefits programs, casual Fridays and a fully stocked kitchen at the office. In order to solve a long-term problem, you need sustainable solutions.
A paycheck alone is no longer sufficient to keep employees happy and engaged. Recent research from PwC’s Human Capital Report and Mercer’s Global Talent Trend study, reports that employees want a sense of purpose, career development, a flexible working environment and a commitment to their wellbeing. Digital coaching is one abiding solution that addresses all of these issues. It is both an effective career development solution and a tool to maintain employee wellbeing. Furthermore, the coaching element offers employees the chance to go inwards and discover what is truly important to them, achieving a sense of purpose, whilst the digital element offers employees flexibility.
If organisations invest in such solutions, they will see stronger company performance. Temkin Group even reported that organisations with stronger financial performance have a considerably more engaged workforce.
To find out more about how we can enhance your employee experience, get in touch with us today for a consultation with one of our learning and development specialists.