A Complete Guide to the Employee Experience

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The employee experience is an increasingly popular topic. Companies that invest in their employee experience are better places to work for, more in-demand among applicants, and also more innovative. However, what is an employee experience exactly, and how can you improve it?

In this article, we will take a deep dive into the employee experience and provide you with everything you need to know to ace yours.

Table of content

Introduction
What is the employee experience?
The business impact of the employee experience
How to improve the employee experience in the organization
The employee experience and company software
The employee experience and company hardware
The employee experience and company culture
The employee experience outside of HR
Conclusion
FAQ


Introduction

Why has the interest in the employee experience grown so much over the past few years? A 2018 article by Dennis Lee Yohn in Forbes stated that “2018 will be the year of Employee Experience.”

The employee experience is the HR equivalent of the customer experience. The customer experience is an “outside-in” approach in which the customer has a central role in product and marketing-related decisions.

Since the goal of most companies is to make customers happy by selling them products or services they want, starting with the customer make sense. If you can create something that the customer will enjoy, they will buy it.

According to John Plaskoff, the employee experience is similar. Rather than the traditional transactional human resource strategy, the organization tries to understand the needs, expectations, and fears of the employee. The goal is to design an experience that demonstrates care for the employees within the context of their work.

The employee experience is a key element of design thinking applied to employees. Every design thinking process starts with empathizing with the customer. Understanding how the employee experiences a situation helps to define problems and come up with solutions.Employee experience as part of design thinking

Plaskoff goes so far as to call the employee experience “the new human resource management approach”. Putting the employee’s total experience at the center of HR implies a very different, employee-centric approach. According to him, this approach fits better with the modern workplace and enables the empowerment and engagement of employees.

This is a lofty promise – we don’t know if the employee experience will be quite as revolutionary as Plaskoff claims. However, the concept is interesting and does offer a new perspective on people management. Before we talk about the value of the employee experience, let’s first come up with a definition.

What is the employee experience?

According to Plaskoff, the employee experience is the employee’s holistic perception of the relationship with their employing organization derived from all the encounters at touchpoints along the employee’s journey.

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In other words, the employee experience is how employees feel about what they encounter and observe over the course of their employee journey at an organization.

Why is this interesting from an organizational perspective? Well, if we put this information together, the employee experience is the degree to which systems and (HR) processes are optimized for employees to do their work.

This is very relevant information for organizations. Companies that provide a great employee experience work with user-friendly software systems and have optimized HR processes like recruitment (often using a stack of recruitment tools), employee onboarding, career path development, and performance management. This enables employees to spend their time on the things that matter to them – instead of doing tasks they don’t want to do or waste time on slow software systems.

For this reason, work is done faster in companies that provide a great employee experience. This has a couple of reasons.

  • The experiences of the employee are carefully planned and optimized with the intention to provide a great experience (very similar to how the customer experience is used for marketing purposes)
  • Technology is leveraged to automate mundane tasks and reduce the complexity in more complicated tasks and processes. This means, for example, that candidates who apply don’t have to manually upload every function on their CV to the company’s ATS but that they can upload their current LinkedIn profile with 1 click on a button.
  • These companies also have a strong culture of innovation that enables creative ideas to flourish, empowers employees to realize these ideas, and strong collaboration to implement these ideas. The need for this kind of innovation culture is there for HR and for the business:
    • HR has to create a great experience for their internal customers
    • The business needs to be able to innovate for employees to make a difference with their work and to be truly empowered.

One final note before we hop on to the next section, employee experience is different from employee engagement. Where employee engagement looks at the work attitude of employees, the employee experience looks at the more day-to-day encounters and frustrations at work.

So companies with high work engagement have a workforce that is eager to work and has the ability to successfully do their jobs. Companies with a great employee experience provide a streamlined work environment for their employees. Those companies are very good at enabling employees to do their work and – through this – push the company forward.

This brings us to the business impact of a good employee experience.

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The business impact of the employee experience

In this 3-minute Learning Bite, we explain employee experience,
its business impact, and how to improve this in your organization.

It is said that good managers enable employees to do their work by removing obstacles that prevent them from doing so. The employee experience is similar. By simplifying systems and processes, it becomes easier for employees to do their work.

Although the employee experience is still a fairly new concept, there have been a few studies that show why it is so important. According to Dery and colleagues (2017), a survey of 281 executives the year before showed the difference between the top and bottom quartile on employee experience.

  • The top quartile produced 51% of revenue from new products and services introduced in the last 2 years, versus 24% for the bottom quartile.
  • The industry-adjusted Net Promoter Score (NPS) was 32 for the top quartile, versus 14 for the bottom quartile.
  • The top quartile showed a 25% greater profitability compared to the bottom quartile.

Companies that create a great employee experience are able to reduce complexity and stimulate collaboration. These findings indicate that these kinds of companies are able to innovate faster by bringing products to the market quicker.

In addition, these companies also seem to be able to create a better customer experience. This shows that if the organization better enables employees to do their work, they are able to serve customers better.

Research by Jacob Morgan shows that companies that invest in their employee experience, outperform their competitors that don’t. Not only do they grow 1.5x faster, pay better, and produce more than double the revenue, they are also 4 times more profitable!

The business impact of employee experience

A third study by IBM’s Smarter Workforce Institute correlates the employee experience with a higher return on assets and return on sales, financial metrics used to evaluate profitability and profit margins, as shown below.

Return on investement of employee experience

In summary, it makes (great) business sense to invest in the employee experience. Although it will be hard to calculate a precise ROI on employee experience investments, companies that do tend to outperform their competition.

An important note is that we don’t know anything about the causality yet. Do companies that invest in employee experience perform better, or are the better-performing companies the ones that heavily invest in creating a superior experience? The verdict on this is still out.

How to improve the employee experience in an organization

According to Jacob Morgan, the employee experience relates to three environments: culture, technology, and physical space. All three act as enablers for a great employee experience.

  • Technology is crucial. As an organization, you need to use great tools to create trust and engagement. Ultimately, technology is a factor in an organization that is shaped by humans!
  • Physical space needs to enable employees to perform optimally. The average employee performs 12-24 tasks during their workday. The physical environment needs to be adapted to this.
  • Culture is about creating an environment where people want to work. If you were to bottle up what it is like to work at your company, put it into a pill and give it to your management, would they swallow it? According to Morgan, “Most of the executives always tell me no. Yet, for some reason they expect their employees to want to swallow that corporate pill”.

Morgan’s approach is appealing as it gives a few tangible ways to improve the employee experience.

Important to keep in mind is that the employee experience should act as the starting point for HR’s products, services, processes, and strategy improvements. This is in line with design thinking: your product will only be successful when you really understand your end-user.

In the following section, I will give three very practical examples of how to take the employee experience as a starting point for an improvement process.

The employee experience and company software

The employee experience should be a starting point when creating, buying, implementing, and improving HR and operational software. Two central questions are:

  • How intuitive is the software for the user?
  • And does the software create value for the user?

Check the figure below. It is an excellent example of how you can create a horrible employee experience by using systems that suck (pardon my French).

User friendliness of employee software

Systems should not just be user-friendly, they should also be engaging. The following model, taken from our Digital HR Strategy course, shows this very clearly. Organizations need to strive for level 3.

AIHR-3-levels-user-friendliness-maturity

At level 1, we have functional software. The picture above is a good example of this. It fits the purpose of its design (to enter and store relevant information) but it has not been designed with the user in mind.

At level 2, we have appealing and intuitive software. This is how your average Android system or iPhone works. Once you get the hang of it, you don’t have to think about what you do – and if you want to try something new, it is self-explanatory.

At level 3, you have connected and social apps, that offer end-user value. An excellent example is an app like Runtastic or your phone’s step counter that compares your performance with a peer group and with your good friend. These apps are social and create an opportunity to connect with people.

There is also a strong case to be made that the employee experience is influenced by behavioral systems, like habits, values, symbols, norms, and broader culture. These are also vital in enabling the employee to thrive. We will come back to this later.

The employee experience and company hardware

Besides the question of software, there also is the question of hardware. Do we provide hardware that truly enables our employees to get the best out of themselves and each other?

At AIHR, we recently had a discussion about whether to use Apple or Windows products. This is a relevant discussion for us as these systems have different compatibilities for specialized software that we regularly use and this was leading to conflicting versions in our product.

So, how about using mobile technology instead of laptops for your package deliverers, or the use of wearables for warehouse employees to ensure an optimum spread of people to fill orders faster? These are discussions that will become increasingly important over time.

Again, the user should be leading here. If you understand the employee and their subjective experience, you can make better-informed decisions that lead to technology that actually solves problems – instead of creating them.

The employee experience and company culture

Until now, we’ve focused mostly on technological frameworks. However, there are other frameworks that influence whether or not employees can thrive in an organization. These include frameworks of reflection, values, symbols, and visible behaviors. In other words, company culture.

It is impossible to nail the technology part without having the right culture. This is why it is so hard to innovate for more established organizations: they cannot keep up with the technological improvements that smaller startups are able to capitalize on.

An example is evidence-based decision making. A lot of companies are implementing people analytics in their organization but failing to create a culture of evidence-based thinking. This makes it hard for people analytics results to be accepted and implemented in the organization.

Aligning organization and employee

In other words, the broader culture and mindset is vital in achieving success with your technology. It will be hard to implement a brand-new and intuitive system without involving and engaging the users of that system. The chances of them resisting this change will be much higher.

Are we creating a culture that promotes creativity, collaboration, and empowerment that enables employees to take risks, come up with new ideas, and actively innovate? If this is the case, people are motivated to come up with new ideas and promote them. Is this supported by the organization? Or are disruptive ideas squashed before they can even germinate? This is crucial in creating an environment where the measured employee experience can lead to actual change.

Another more holistic approach to improving the employee experience would be to take a look at the journey itself. A good approach to improving the employee experience in these different areas is by mapping the journey of an individual employee using pulse surveys or traditional diary studies. These enable you to measure the mood and frustration levels of employees at different times during the day and while working on different tasks. This data can then be used to find points of improvement

The employee experience outside of HR

A final distinction that’s useful to be aware of is the one between the employee experience and the customer experience of HR (CxHR).

According to Volker Jacobs, founder of TI People, CxHR is the experience of internal customers of HR across the HR-owned journey. This includes employees, managers, and contingent workers. HR has a high degree of ownership on the CxHR.

The following picture displays the difference between the CxHR and the employee experience. The previous paragraph provides two links to in-depth articles on this topic.

CxHR and employee experience

The Customer Experience of HR and Employee Experience. Note: Part of the EX lies outside of HR’s reach – image by TI People.

I do, however, want to draw your attention to the degree of HR ownership on the employee experience. The EX is broader than the HR function. It also touches on the job, leadership, and the digital and workplace experience. We already discussed this earlier in this article.

The challenge is that a lot of the touchpoints of the employee journey fall outside of HR’s sphere of influence. In a recent discussion on LinkedIn, Jacobs pointed out that 42% of all touchpoint owners of the employee journey are situated outside of HR.

This brings along a whole other set of challenges that require a well-thought-out digital strategy and careful stakeholder management. This is a topic we will cover in another article.

Conclusion

When we try to understand the employee experience, there are three key elements that we need to grasp: software systems, processes, and culture.

All the examples in this article can be categorized as one of these. In order to improve the employee experience, the organization needs to take a good look at the state of these three categories in the current organization, and how they align with each other.

Intuitive and user-friendly software systems will ultimately fail if they don’t bring value to individual employees. Systems should make the employee’s life better or their work easier. This means that these systems should help to streamline the processes that they have been designed for. In addition, HR and work processes should be optimized to create a good employee experience.

Last but not least, a digital culture is a necessity to get the most out of software and systems. Culture also plays a key role in collaboration and in making sure that employees are empowered, engaged, and managed the way they should.

The employee experience offers a new perspective on how we manage people. This perspective takes the employee and their subjective experience as a starting point. There are countless factors that influence how employees experience work – but as an (HR) organization we’re in a position to influence some of the most important ones. When we do this right, employees will have a better time at work and contribute more to the organization.

FAQ

What is the employee experience?

The employee experience is how employees feel about what they encounter and observe over the course of their employee journey at an organization.

What is the business impact of employee experience?

Research shows that companies that invest in their employee experience, outperform their competitors that don’t. They grow faster, pay better, produce more than double the revenue and are more profitable.

How to improve the employee experience?

The employee experience relates to three environments: culture, technology, and physical space. All three act as enablers for great employee experience.

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