For years, organizations have sought to improve the employee experience with the aim of increasing retention and productivity. Efforts aimed at driving employee engagement, or each worker’s daily commitment and attitude toward the company they work for, typically focused on meeting social and emotional needs, which manifested in initiatives like annual employee surveys, creative office spaces, events for employees and more.

Overall, however, employee engagement remains pretty low. Gallup’s latest research puts the number of engaged employees — those who are highly involved in, enthusiastic about and committed to their work and workplace — at 36%(opens in new tab). Some 13% are actively disengaged and the rest (51%) are simply not engaged.

The employee experience can have a big impact on employee engagement, and many companies are focused on evaluating and improving that experience. However, the next iteration of this journey goes beyond occasional surveys and events.

What Is Employee Experience?

When consumers spend money or choose to take part in an experience, they leave with a memory of what happened there. That feeling or memory helps the person decide if they want to enter deeper into that relationship.

Similarly, the employee experience encompasses all of the things about the company that affect whether an employee wants to deepen their relationship with the organization. It starts with the recruiting interactions and carries through until the person leaves or retires from the business. The elements of the employee experience span an employee’s entire journey, from recruiting to hiring, onboarding, engaging, performing, growing and finally departing. Most of an employee’s time is spent in those final three stages: engaging, performing and growing.

An employee may be meeting or even exceeding performance expectations but won’t stay with the company and realize their full potential unless they feel appreciated by and connected to the company. That’s why engagement, and the broader employee experience, is so critical.

Key Takeaways

  • The employee experience is the relationship an employee has with their company. It’s what makes a person feel like they want to work for a company rather than need to work for an organization.
  • That relationship is deeply influenced by the level of engagement employees have with the company. Engagement is influenced by a number of things, but a big one is the relationship the employee has with his or her manager.
  • Companies that deliver great employee experiences align benefits with their mission, give their employees the resources they need to do their best work and empower employees to create experiences that contribute to its culture.

Employee Experience Explained

Improving the employee experience relies on changing the assumption that people need to be at work and becoming a company at which people want to work. This requires shifting from focusing on utility to experience, in which the employer is expected to do more than simply provide the physical things people need to accomplish their work and instead provide more of the things that make them want to be there. Employee experience extends across a company’s physical space, the company culture and the technology employees use to do their jobs.

The shift to delivering great employee experiences is driven by many factors, like the changing workforce, competition for talent, the gig economy and higher expectations about the type of technology available in the workplace.

Why Is Employee Experience Important?

In some organizations, employee experience is overtaking customer experience as a priority, given that several studies show employees who have a better employee experience will treat customers better. In fact, almost half of mid-sized businesses(opens in new tab) that enjoyed strong growth over the past year were focused on improving the employee experience.

A strong employee experience can lead to better performance, increased happiness and greater engagement for workers. Employees need stable and secure work environments that provide financial stability and job security. But they also need work that fulfills their individual purpose and makes them feel they are contributing to larger goals that are important to them and align with their motivations.

Who Is Responsible for the Employee Experience?

The development of the employee experience most often sits within human resources, and is most closely tied to employee engagement roles. An initiative to improve the employee experience relies heavily on internal communications for its ability to frame and broadly disseminate corporate messages and initiatives — in the form of email, video and more. But without buy-in at the highest levels of the organization, efforts to improve the employee experience will be unsuccessful.

Employee experience is woven through every aspect of the company, and must be viewed as such. That includes how the business is marketed to potential employees and an IT strategy that takes advantage of tools that actually help employees do their jobs, find the information they need and collaborate. And it’s all a reflection of the culture of the company, which is influenced by the management style.

7 Key Milestones in the Employee Experience

There are a few key steps in any employee’s experience that will shape their thoughts on and happiness with the organization. These include:

  1. Recruit. Just as they do before making a personal purchase, potential employees will research the business. They will click through your website, read employee reviews on sites like Glassdoor and even seek out people who previously or currently work there.
  2. Hire. Asked why all Trader Joe’s employees are so nice, its human resources lead said they look for people who are “outwardly nice,” as a hiring criteria because it’s very difficult to train someone to be nice. The best new hires have certain traits that will make them an immediate fit with the culture and mission of the company, making for an easier transition.
  3. Onboard. Once someone has accepted a job offer, onboarding sets the expectations for the employee experience. It’s the person’s first impression. If onboarding is not welcoming, helpful and developed with the goal of allowing that employee to do what they were hired to do, it can be tough to recover from this negative impression.
  4. Engage. This stage comes before performance because even an unengaged employee can still be effective at their job. But when it comes time to decide whether to stay with the company, their past experiences will inform that decision. Anything put into developing the employee’s skills to make them a key long-term contributor will be lost.
  5. Measure and recognize performance. An engaged employee will execute their duties to drive the business toward its goals and objectives but companies need methods to determine how well they’re performing and recognize when they do.
  6. Develop. Employees receive the training and development needed to progress in their careers — and impart that knowledge onto those who step in to fill their roles.
  7. Leave. Employees who have a positive experience still leave companies, but what they say after they’re gone makes a huge difference in how the company is perceived and recruits new people. How the company handles a worker’s exit can be one influential factor in whether the employee recommends the company to others.

How Does the Employee Experience Impact the Business?

The employee experience can have a direct effect on the success of a business. Companies with great employee experiences outperform the S&P 500 by 122%, and those with highly engaged workforces are 21% more profitable(opens in new tab) than those with poor engagement. According to the firm, companies it recognizes as having a great employee experience can better attract talent, improve engagement, productivity and retention.

In its analysis of more than 100,000 teams from 276 companies, Gallup found that top-performers registered 10% higher in customer loyalty. The employees were safer (64% fewer safety incidents) and there was less absenteeism (81%).

Employee Experience Challenges

On a “Doing Good Business” podcast, Zoom recruiter Blake Harris talks about “failing forward(opens in new tab).” Not everything the company tries when it comes to employee experience will go over well with staff or have the desired impact. Improving the employee experience is about trying things in iterations and being willing to try, fail, improve and continue the cycle.

There are some universal challenges to creating a positive employee experience, as well. In the key milestones in the employee’s career, the one that has the biggest impact during the crucial “engage” phase is the employee’s manager. Gallup says managers account for 70% of the variance when it comes to employee engagement scores. The manager needs to understand what motivates the employee and provide them with the support to reach their full potential. This can’t happen if the manager is unavailable and fails to provide any mentorship. Managers need to encourage conversations with their reports, provide feedback and offer recognition to more deeply engage with their employees.

Organizations also fall into the trap of thinking that the employee engagement survey covers their responsibilities around the employee experience. On the other hand, they may believe such surveys provide too much data to assess and make it difficult to identify meaningful changes that would enhance the employee experience.

Additionally, many businesses equate employee experience to higher compensation and better benefits. Higher compensation and benefits(opens in new tab) are still enormous factors in retention — depending on what study is referenced, it’s generally in the top three. But leaving a job is still a major decision and people are looking for more than higher pay — specifically, meaningful work and peers they trust and can learn from. This includes a diverse work environment. The employee experience encompasses several key factors that not only include a stable and secure work experience, but extend to feelings that they contribute to the company, feel part of a team that is diverse and have trusted relationships at work.

What will almost certainly make an employee experience initiative fail is a lack of buy-in from the highest levels of the organization. Without significant backing and action by senior leadership, no amount of effort to improve the employee experience will matter.

Employee Experience by the Numbers

Below are several statistics that demonstrate the importance of the employee experience and the positive effects that come with it.

  • 51% of business leaders(opens in new tab) surveyed plan to build individualized employee experiences comparable to consumer experiences in the next two years.
  • 51% of workers are “not engaged(opens in new tab),” meaning they are psychologically unattached to their work and company, according to Gallup.
  • Gallup also found that companies with higher levels of engagement have:
    • 10% higher customer loyalty/engagement
    • 18% higher levels of productivity in sales and 14% higher productivity
    • 18% lower turnover for high-turnover companies (those with more than 40% annualized turnover) and 43% lower turnover for low-turnover companies (40% or lower annualized turnover)
    • 64% fewer safety incidents/accidents

Employee Experience Examples

What makes an employee want to work for a company so that they feel connected to their work and want to continue working there? Companies with outstanding employee experiences offer some clues.

For one thing, the benefits and rewards they offer to employees echo and reinforce their mission and values. Hint Water’s mission is to provide good products that help people live healthier lifestyles. That mission starts with their employees, who have 100% of their insurance premiums covered by the company. Hint also provides a health and wellness stipend and endless free Hint water.

Companies that have top employee experiences align them with current workforce expectations, even if that means bucking long-held standards in their industry. REI has earned a spot on “Fortune’s 100 Best Companies to Work For” every year for more than two decades. Its retention rate is double the industry standard. One of the things REI credits for this is giving its hourly retail employees predictable schedules, which makes it easier to have more of a balance between work and personal life. The schedules are posted 17 days in advance, and managers prioritize schedules around preferred days off. REI also guarantees employees a set number of hours over a three-month period.

And the best companies have executive support for the employee experience and empower employees to drive it. For instance, Zoom has “The Happy Crew,” a group of more than 140 volunteers that organize activities for employees that celebrate milestones, recognize diversity and complete community service. Two of its biggest events are its “bring your kids to work” and “bring parents to work” days. A structured and scalable program, The Happy Crew is run by a committee and there are leads and teams in each office that carry out programs for thousands of employees.

8 Ways to Improve Your Employees’ Experience

Improving the employee experience starts with acknowledging that your employees’ experience may be lacking (or at least could be better) and that the way things have always been done may not be ideal in today’s working environment with a new generation of employees. Get started with these simple steps:

  1. Make it a priority at the highest levels of the organization. Any employee experience effort that does not have buy-in from executives and others throughout the business will not be able to change and improve anything in a meaningful way. Define what the goals are, how they connect to the mission of the company and what exactly about the company culture the business wants to change. Tie a better employee experience to a business metric such as decreasing voluntary turnover.
  2. Identify someone to lead employee experience. When enacting change, it can help to bring in an outsider. But identifying someone from within the company who has been there for a while is often a stronger strategy. This person understands the company, knows the culture and discerns the various stakeholders and important players involved to truly shift it. It’s critical that this person have access to executive leadership, but also a strong connection to the “boots on the ground” workers.
  3. Learn what your peers are doing. Employee experience will not look the same at a software startup and a decades-old manufacturing company. There are certain things that will work in particular industries or workplaces and not in others. Talk to peers in the industry, find out what has worked and what hasn’t, and compare it to other businesses outside of your industry, perhaps ones you already work with.
  4. Establish a framework. Many employee experience efforts begin and end with the employee engagement survey. Often, employees don’t see much change after the survey and lose trust in any efforts to that end. Employee experience needs some basic structure to make sure data turns into relevant action. Establish clear roles for executives in analyzing and communicating the results through all-employee meetings and managers. Form a team that includes representation from across the business to decide what to focus on and set goals for how that team will measure its success.
  5. Get support from team leads across the business. Just like any other large change management effort, employee experience efforts will fail if they are siloed in specific teams or departments. There will be areas of improvement specific to certain lines of business, but the effort must take into account relevant views and obstacles to make sure major initiatives can be applied across the business to change the culture. Something as simple as a “bring your pet to work day” can sow division in, for instance, a logistics company where that sort of thing may be possible in the corporate and regional offices, but not for drivers on the road.
  6. Make it experienced-based, not process-based. Experienced-based approaches provide ways for people to learn through experiences rather than processes. For example, with onboarding, instead of forms and PowerPoint, focused on people and interactions. Don’t make people sit in a room and stare at a screen — organize experiences for them with other people and especially help them get to know other departments. Make training content consumable and interactive. Bite-size the content in 10 to 20 minute blocks if possible, with quick tests to determine knowledge retention. Enable people to learn by doing as much as possible.
  7. Measure success. Because it’s largely qualitative, one of the hardest parts of improving employee experience is deciding how to measure those improvements, track them and prove the value to executive leadership. It’s great to measure things like employee Net Promoter Scores (NPS), but what do they really mean and tell you about what employees think about the efforts? Without goals and ways to measure this, it’s quite common for employee experience efforts to become synonymous with event planning committees or simply experimenting without ever really figuring out what’s effective. For instance, consider that the company learned from the employee engagement survey that benefits were too expensive. They roll out a new wellness app that can help employees get discounts on their insurance premiums if they take advantage of a few wellness challenges with their fellow employees. That’s a great idea, but did anyone sign up? How many people are using the app? And if it’s not most of the company, why not? Was it communicated well (do people even know that it’s there)? There are very simple ways to measure experience efforts that go a long way toward improving the employee experience.
  8. Leverage technology. Employee experience software is a new category that aims to bring together the many tools that manage the different components of the employee experience. HR guru Josh Bersin describes it as sort of a next generation employee portal(opens in new tab). It presents all of the different HR tools, enables collaboration and pulls feedback in a consistent way that more closely resembles a consumer experience. But organizations don’t necessarily need dedicated experience platforms to improve the employee experience. There is a lot of functionality in HRMS suites that advance move an organization’s goals. For instance, the software could have a feature that allows employees to easily recognize peers and for managers to publicly celebrate their employees when they reach a certain goal or help with a key project.

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What Tools Help Improve the Employee Experience?

Improving the employee experience centers on three pillars: physical, cultural and technological. Technology is an enabler of cultural improvements and, especially in the wake of the pandemic, has empowered work in physical space that isn’t the traditional office. Employees, especially now, continue to more closely associate work as an action, not a place.

Lots of things related to this working environment are still new, and continually taking the pulse of employees around what’s working for them and what isn’t will be crucial. Quick employee surveys are a great tool in this regard, and it’s elevated the importance of internal communication. Ensuring that people have access to information to feel connected to the company is crucial, and email will fall short here. Companies should continue to look for ways to serve up information to employees in much the same way that marketers do, leveraging the many channels they work with tools such as Zoom for town halls, Slack channels for employee groups, and lunch and learns. The best communication efforts will reach employees across mobile, home office and physical office environments.

The Future of the Employee Experience

Many analysts have written about how catastrophes will change and redefine the future of work. But one interesting outcome of a pandemic is that employees think their companies did a nice job handling the first phase of the crisis, with the majority of those surveyed by McKinsey(opens in new tab) saying they thought their organizations responded to the crisis appropriately, that leadership acted to protect their health and safety and that they have the necessary information to plan and adjust.

The result is that employers have the trust of employees right now, and can get candid feedback on potentially impactful changes that will help improve the employee experience.

How you will improve the employee experience depends upon the company culture and maturity. For some organizations, implementing collaboration technologies will bring really revolutionary changes to the workforce. For others further along in technology maturity, leveraging technologies such as augmented reality and wearables will enable more experienced workers to “walk through” jobs with newer ones and pass down unique knowledge and work experience to benefit business continuity.

Because there aren’t sweeping changes that are universal to every company across every industry, listening to employees will be crucial to continuing to meet their preferences for how they want to work. And right now, companies have their ear.

Improving Employee Experience with Software

Giving all employees access to robust software that can match the functionality and ease of use of platforms they use in their private lives is a really important part of improving the employee experience. Your employees shouldn’t be fighting the software — it should empower them to do their jobs. Leading cloud solutions offer intuitive user interfaces, logical workflows and simple integrations as customers receive updates regularly and all customers are always on the same version.

These systems can also empower employees to execute a variety of tasks in one place, so they don’t have to constantly log in and out of systems or move information around. What’s more, this HCM software can automate many of their repetitive tasks, freeing them up to spend more time on the parts of their jobs that truly interest and engage them.

Trader Joe’s director of recruitment and development said on one of the company’s “Inside Trader Joes” podcasts that training at the company is not just designed to create great leaders at that point in time for Trader Joe’s. It’s to develop content and material that helps people be the best version of themselves anywhere they are.

It’s that type of focus on developing the employee beyond the business’s sake that speaks to the real vision for the ultimate employee experience — and one that will make people want to join companies like that.