Employee experience has been a global business priority for several years, but its scope is constantly evolving. Learn the fundamentals of employee experience and how to develop a successful companywide strategy.
Understanding the scope of the term “employee experience” can be difficult. Linguistically, it recalls the parallel concept of customer experience, pushing organizations to consider if their employees receive the same attention and dedication that their customers do. Conceptually, it has its roots in organizational psychology, prompting businesses to reevaluate the unwritten contract underpinning their relationship with their employees. And practically, it refers to the companywide strategies and initiatives that better enable employee belonging, wellbeing, productivity, and engagement. For a business to succeed in the modern landscape, a comprehensive understanding of employee experience is more than a bonus. It’s essential.
By nature of its reach as a topic, employee experience is always evolving. Where once employee experience would have been perceived as the sole purview of human resources (HR), now it has the attention of the full C-suite—and with good reason. When we consider the full scope of each employee’s experience, it necessarily includes every potential touchpoint they encounter from onboarding to exit, whether that’s the internal technologies and solutions employees use for human capital management, communication, and monitoring job performance, the social opportunities and facilities available to them in person, or the extent to which their contracted work hours impact their home life. That’s why it’s integral that businesses ensure their people leaders are aligned and pulling in the same direction when it comes to employee experience. But gaining buy-in across the board can be difficult, too.
According to our global survey report of 1,150 senior executives “Closing the Acceleration Gap: Toward Sustainable Digital Transformation,” nearly half of leaders (49%) said that an inability to connect operational, people, and financial data to business outcomes impaired agility.
Over the course of this article, we’ll define employee experience more definitively alongside an overview of similar terminology, before breaking down the benefits of a positive employee experience and providing a full analysis of the major points of focus business leaders need when developing their employee experience strategy. At each stage, we’ll provide current statistics from new and recent reports that illustrate the business needs driving the ever-growing focus on employee experience and employees’ corresponding expectations. By the end, this article will ensure that you have the theoretical framework and the dedicated resources you need to create a strong case for a holistic, multichannel approach to employee experience.
The seed for modern employee experience is a simple one: viewing employees as significant partners and stakeholders, regardless of their seniority, gender, race, religion, or any other factors. When we define employee experience, we should do so with that mutual respect in mind.
In short, employee experience refers to the sum total impression left on an employee by each point of contact during their life cycle at a specific company. However, it shouldn’t be viewed as something that a company does to its employees. Instead, it relates to the internal experience of every employee, acting as a means to measure the impact each interaction has on their thoughts and feelings toward the business. It’s about the perceptions they have about the company culture, the way they’re expected to carry out their work, their people leaders, and everything in between. A true image of employee experience would involve a consideration of everything an employee experiences at work.
When we discuss employee experience, it’s further important to view it as cumulative. Every employee’s journey with your organization will have significant moments, but those are far from definitive in themselves. Throughout this article, each time we refer to individual touchpoints and employees’ corresponding perceptions of them—such as the frequency of businesswide meetings, the extent to which their work life is digital, and the strength of company messaging—these are only designed to clarify the sheer variety of encounters an employee will have during any given day, let alone during a full workweek. From the moment a new employee signs their job contract, their perception of your business is constantly evolving. Ensuring that evolution is a positive one requires a sustained, involved approach with dedicated solutions.
In order to better clarify the relationship between employer and employee, employee experience is often viewed under the wider umbrella of the employee value proposition—the unwritten contract that exists between an employer and employee. Historically, the employee value proposition covered the salary and benefits offered to the employee in exchange for their work, but in the last century it’s continually expanded to include everything from professional growth to belonging and diversity. Considering how the employee value proposition is balanced between the employer and the employee is a good thought exercise when considering where to make changes to the overall employee experience.
When we discuss employee experience, it inevitably calls to mind customer experience—itself the cornerstone of many modern marketing and sales approaches. Like employee experience, customer experience refers to the full picture that a customer gains of you as a business during their customer journey. Are they happy with the quality of your product or service? Do they feel any brand loyalty toward you? And what relationship do they have with customer-facing employees at the point of sale? Does the digital customer experience differ from the in-person one? These are all questions that can just as easily be inverted to apply to your people.
It’s the last question there that most obviously reflects the relationship between customer experience and employee experience. Where once the influence exerted from one to the other was best understood by the adage “the customer is always right,” now businesses recognize that a positive employee experience has a direct impact on the customer experience as well. For a truly people-oriented approach, we shouldn’t purely think of employee experience in terms of the knock-on effect it can have on customer experience—supporting your employees at each stage of their employee life cycle carries its own motives beyond measurable metrics. But by considering the tangible business benefits that rise from adjusting employee experience strategy, we can better see how significant an impact an integrated and sustained approach to employee experience can have.
The seed for modern employee experience is a simple one: viewing employees as significant partners and stakeholders, regardless of their seniority, gender, race, religion, or any other factors.
In a 2022 study specifically designed to accurately reflect the impact positive employee experience had on customer experience and business outcomes, Harvard Business Review compared three years of data from over 1,000 brick-and-mortar locations for a global consumer-facing retail brand (the intention being that this would limit other extenuating factors, such as changes in brand reputation and wider market forces). They found that when a store moved from the bottom quartile to the top quartile in each of the employee experience metrics they measured—including employee longevity, full-time/part-time status, internal rotations, and skill level—it would increase revenue by more than 50% and profits by nearly as much.
In your own research around employee experience, you’ll likely have seen that term used in close conjunction with another one: employee engagement. In the changing digital landscape, businesses have placed a renewed focus on both concepts, often as part of the same initiative due to their close relationship. Using them interchangeably, however, is a mistake.
Since employee experience and engagement are so causally related, we’ve provided a further definition of employee experience that clarifies the relationship between the two:
Our global survey report of 1,150 senior executives, “Closing the Acceleration Gap: Toward Sustainable Digital Transformation,” found that half of HR leaders (50%) are focusing on positive employee experiences to accelerate transformation across their business. But why are employee experience and employee experience products so top-of-mind for organizations across the globe? And what measures of success do we use for such a people-focused strategy?
In order to discuss employee experience, we need to zero in on one of the many factors that influences the overall perception your people have of your company. As we continue to deal with the ramifications of the pandemic, one of the most significant HR topics for employees is work-life balance. The 2021 LinkedIn “Employee Well-Being Report” found that employees who were satisfied with their organization’s flexibility in hours or location were:
What’s remarkable is that despite this, LinkedIn further reports that 20% of employees don’t have location flexibility, and 25% of employees aren’t satisfied with their current ability to dictate that flexibility. As we continue to move forward into a new world of work (and beyond that, the next evolution in the way we work), the businesses that succeed will be those that listen to their people and act on what they say.
As we mentioned in our earlier section on the relationship between customer experience and employee experience, when a company places a focus on employee experience, employee performance increases, and when employee performance increases, traditional markers of business success increase too. In fact, a recent Gartner survey found that organizations with high levels of flexibility were almost three times more likely to see high employee performance.
Employee experience has moved beyond being a CHRO initiative. CFOs, CIOs, and other key business leaders are increasingly focused on providing employees a personalized omnichannel experience.
Given the scale implied by the full scope of the term employee experience, it can be overwhelming trying to develop a strategy that covers the priorities outlined by the entire C-suite, especially if your business has entrenched methods of working. Fortunately, creating an employee experience strategy from scratch (or optimizing an existing strategy) doesn’t have to be an all-or-nothing scenario. Instead, we can break your overall employee experience initiative down into more manageable chunks.
Our global survey report of 1,150 senior executives found that 50% of HR leaders are focusing on positive employee experiences to accelerate transformation across their business.
According to research undertaken by McKinsey in 2021, the top three factors employees cited as reasons for quitting were that they didn’t feel valued by their organizations (54%) or their managers (52%), or because they didn’t feel a sense of belonging at work (51%). McKinsey’s survey data indicates that employees’ frustrations stem directly from an overall impression of not being heard or seen by their company, as opposed to more isolated factors such as benefits or workload. That’s why the basis for any successful employee experience program is listening, whether that’s via surveys or other in-person solutions.
At Workday, we recommend a robust employee engagement survey, delivered at a regular cadence and with a consumer-level digital interface. As previously mentioned, an engagement score can function as a proxy measure for an employee’s overall feelings toward your business. But engagement surveys should cover more than just engagement metrics—that is, how dedicated an advocate each employee is for your company—further taking into account other psychological factors driving an employee’s overall impression of your organization. Read here for a further breakdown of the methodology behind our engagement surveys.
Regardless, several influencing factors recur the most. We can view these as the cornerstones for any major employee experience initiative. However, a one-size-fits-all approach based on popular trends will always meet resistance despite its convenience, since it inherently occludes significant demographic groups within your organization. To create a truly individually tailored employee experience, a company has to recognize each employee as a person facing different circumstances, taking into account the multitudinous different experiences within the business. According to the Deloitte “2021 Global Human Capital Trends” report, 68% of executives agreed that in the future workforce strategies will be more customized to individual needs. To create a hyperpersonalized employee experience, you need to listen and you need to act from a place of genuine empathy.
Without the essentials, there is no basis for improving employee experience in other areas. These are the base-level requirements that all people should be able to expect from their work, regardless of their geographical location, identity, background, or even their job performance.
As understood through the aforementioned employee value proposition (see the section “What Is Employee Experience?”), the core arrangement between employers and employees is the exchange of labor for payment. An employer is expected to provide an employee with the tools, equipment, and solutions necessary to do their work, and in turn an employee carries out their work as dictated in the contract, whether that’s during set hours, varying shift patterns, or as and when they are required. However, the model has long since evolved beyond such a rudimentary trade.
Providing the essentials extends far beyond standardized equipment. Now employees need to consider how each person functions best, including what the process looks like for digital onboarding versus in person, what the optimum working environment and remote work balance is for each individual, and how the needs of disabled employees are being met. In each instance, the opportunity for self-reporting is important to ensure everyone can voice their own needs, since what’s considered an “essential” can differ from person to person, as well as in different cultures and industries. Even when considering the fundamentals, personalization is key.
But guaranteeing the essentials doesn’t just refer to providing tools and educational resources—it’s further about ensuring that support is in place for employee burnout, stress, and wellbeing. A 2021 global Harvard Business Review study found that 89% of the 1,500 respondents said their work life was getting worse, and 85% said that their wellbeing had declined since the pandemic. If you treat your people like cogs in a machine rather than a well-respected and integrated community, the effects can be as damaging as they are widespread.
More than ever, work and the employees doing it are dispersed. For many digital businesses, there is no longer a fixed site that regional employees are expected to attend with a rigid regularity, and even companies that have traditionally prioritized in-person work—such as retail stores, healthcare organizations, and manufacturing—have still found new impetuses from the opportunities raised by remote work and flexible working practices, innovating when it comes to HR processes and administrative roles.
Data taken from our employee engagement platform Workday Peakon Employee Voice (read more in our report “Employee Expectations 2022”) showed that between 2019 and 2020 there was an increase of 125% in comment activity surrounding flexible working. From 2020 to 2021, that figure remained essentially unchanged. For employees considering where they work and who they work for, flexible working and remote working are priorities that are consistently front and center.
A 2021 global Harvard Business Review study found that 89% of the 1,500 respondents said their work life was getting worse, and 85% said that their wellbeing had declined since the pandemic.
Recognizing the shift in workforce dynamics represented by such a high percentage of employees working remotely—and wanting to do so permanently—requires a focus on digital solutions. Remote work has forced many organizations to face the revelation that their company culture wasn’t as firm as they previously believed. Businesses have to be asking how they can provide simple, intuitive interactions for employees to obtain the information they need, while also ensuring that remote employees aren’t limited to solely carrying out tasks in isolation. An employee who onboards remotely should be provided an experience that carries the same value and attention as someone who onboards in person, even if that experience is necessarily different by its nature.
If we want to bridge the global workforce, we need to meet each employee where they work, on their own terms, and in a way that’s legible to them. If a company’s disparate and disorganized HR systems and solutions are confusing to an employee who is on location with access to direct support, then they’ll actively hinder and frustrate an employee whose entire workflow is accessed through them. The power of IT is to provide employees with personalized experiences that increase productivity, align new business strategies, and ignite engagement—all in service of creating an organization that’s highly adaptable at its core. By baking that flexibility into their infrastructure, companies will face the next seismic shift in how we work far more readily.
If there’s one thing the greater dispersal of employees from workplaces has illustrated, it’s that many businesses have been leaning on outdated technology and solutions. Now, every company has to consider how their teams interact digitally. Our “2021 CFO Indicator Study” of 267 global CFOs found that nearly all (97%) said technology was critical to attracting and retaining talent, and nearly half (48%) were actively looking to invest in such technology over the next five years.
Where once clunky interfaces were par for the course, now employees expect the solutions they use at work to have the same qualities as the apps they use on their personal smartphone. That means user-friendly user interfaces, strong integrations between one solution and another, smooth user experiences on company websites, and the interfaces that are first and foremost intuitive. The expectation is that the data and resources an employee needs to execute their job role should be immediately and readily available to them in a usable format.
Not only does this require the incorporation of user-friendly technology with consumer-grade app-like interfaces, it also necessitates solutions that are driven by machine learning. In order to truly meet employees where they work, surveys need to be automated, employee journeys have to be adaptive to personal needs, and self-service options need to be categorized in such a way that smart search functionality pulls the right data at the right time for the right individual. With workforces becoming increasingly tech savvy, attracting and retaining talent means matching the current pace of technological development with to-the-minute insights and resources.
Our 2021 report “The Great Regeneration: Turning the Tide on Employee Resignations” found that 27% of employees were at a high risk of attrition. Further data taken from our engagement platform for our “Employee Expectations Report 2022” revealed that the growth scores of employees who remain with an organization are 13% higher than the average score of those who decide to leave. With growth comments accounting for 8% of all employee comments in 2021—a 2% increase compared to 2020—employees are speaking up about their needs when it comes to skills development and talent performance. Now it’s time to act.
While traditional career growth conversations were fixed to salary increases and promotions, contemporary workers expect far more regular and small-scale opportunities to develop, from learning new skills that benefit their existing work to finding short-term internal opportunities or “sprint projects” where they can contribute expertise that sits outside their existing position. Those small moments that matter are often essential to increasing employee retention. By working together, the offices of the CIO and CHRO can build a skills taxonomy, identify where skills gaps exist, and enable employees to expand beyond their day-to-day workload, thereby promoting a culture of growth that doesn’t rely solely on financial reward and employee migration.
An employee who onboards remotely should be provided an experience that carries the same value and attention as someone who onboards in person, even if that experience is necessarily different.
Skills development isn’t just a major point of contention among employees; it’s also a significant hurdle for people leaders. Our research for “Closing the Acceleration Gap” saw 4 in 10 (38%) leaders say a lack of relevant workforce skills is their biggest barrier to transformation. A further 34% of leaders (particularly in finance and IT roles) said advanced analytics and data visualization skills will ensure their teams can continuously meet evolving business demands. Recognizing the rapid pace of the digital landscape involves reinvesting in your existing employees, rather than rushing to hire new employees or contracting external agencies.
Businesses that pay lip service to belonging and diversity without committing to sustained, actionable change are beginning to see the negative consequences of doing so on employee loyalty and retention. The “Deloitte Global 2022 Gen Z and Millennial Survey” found that of those millennials who were “very satisfied” with their employer’s progress in creating a diverse and inclusive environment, 52% of them said they expected to stay beyond five years, with only 17% saying they’d leave within two. For those who were “not satisfied at all,” the inverse was true, with 52% saying they’d want to change companies within two years, and only 11% saying they’d stay past five. With millennials set to make up 75% of the workforce by 2030, businesses will need to be increasingly conscious of creating a diverse work environment.
To create sustainable change, businesses need to first measure and assess their current position. It can be a difficult, humbling experience to acknowledge past and present shortcomings—especially surrounding such delicate topics—but without proper diversity analytics, you won’t have the data necessary to formulate a stronger employee experience strategy that truly reflects where employees need support. In 2020, we saw comments in our employee engagement platform around belonging and diversity doubled in the wake of George Floyd’s killing. Once again, from 2020 to 2021, those increased figures did not decline. By forming a cross-functional partnership, HR can use the data acquired by IT to examine and begin remedying bias in your hiring practices, creating dedicated belonging and diversity roles and cultivating a company culture where everyone belongs.
Every person has unique aspects of their personality and identity that makes them them—creating a sense of community in your workplace doesn’t mean discounting that, it means creating an inclusive work environment where those unique attributes and worldviews can flourish together. If anyone lacks the psychological safety to bring their best self to work due to the atmosphere and culture, then that necessitates a new approach to belonging and diversity, one that’s built on providing space to share your insights on company diversity initiatives and for employees to share confidential feedback. No one’s wellbeing and performance should have to suffer because of active discrimination or feelings of ostracization.
Each of the focus areas above will need its own dedicated solutions and key performance indicators, but how do you gauge overall employee sentiment? By measuring employee engagement through regular surveys, not only do you give employees a chance to speak up on the issues that matter to them—from their views on the goals set by senior management to their overall employee satisfaction—you further foster a culture of psychological safety and inclusivity where people actively see how their opinions contribute to wider business initiatives. When you empower the employee voice, employee experience will always benefit.
Our “Employee Expectations Report 2021” showed that the employee engagement score for employees who remain with a business is 13% higher than the average score of departing employees.
But what does empowering the employee voice actually entail?
The first step is committing to a system of regular surveying, utilizing machine learning to ensure questions are asked when they matter. By asking employees the right question at the right time, you not only reduce survey fatigue, you also give them the opportunity to speak to issues at the point of contact, rather than months after the fact. A survey is only one part of the engagement puzzle—employees should have other avenues where they can raise concerns, including one-to-one meetings with their line manager and wider company meetings—but the confidentiality enables people to voice ideas they otherwise wouldn’t have.
Next, you need a platform that enables people leaders access to real-time employee sentiment data, enabling them to tackle the most pertinent issues their teams are facing in a manner that’s timely and efficient. In Workday Peakon Employee Voice, not only can you break down engagement scores by topic, team, industry, country, and other influencing factors, you can also benchmark your scores against the market standard. By coupling that with our automatically generated recommended manager actions, you create a situation where employees feel listened to, they feel heard.
Our “Employee Expectations Report 2021” showed that the employee engagement score for employees who remain with a business is 13% higher than the average score of departing employees. By regularly meeting employees in the natural flow of their day to ask them what they think and providing them visibility on the actions taken as a result, you’ll have a far better range of insights on how your employee experience program is progressing and where it should be headed next.
When we ascribe value to employee experience, we often do so from a perspective of business performance and productivity metrics. But what that misses is the true value of a positive employee experience: creating a company culture that is built on empathy and sincerity. Recent research by McKinsey found that globally only 35% of those who quit in the past two years took a new job in the same industry. People are looking for new pastures and new challenges—organizations that address those needs internally are the ones that will have the highest retention rates.
If you leave this article with one takeaway, it should be that the insights that are most relevant to your business aren’t going to be found online—they’re with your employees. That doesn’t mean ignoring current research around the latest trends in employee experience, it means engaging with your employees at every stage of their life cycle. Provide them with the space to voice their thoughts, prove to them that you’re invested in their professional and personal development, and when you commit to a course of action, ensure that your employees are informed as to what progress is being made—positive or otherwise.
Employee experience isn’t an area of expertise to be assigned to HR teams or a data point to be gathered once a year. All branches of your company, from the CFO to the CIO, need to take a people-first approach when it comes to strategy. Without that, your employees will always face friction in some part of their working day. The best employee experience is one that’s scarcely noticed, where each employee feels their needs are being met without resistance, and where any requests or tasks take place as part of their natural daily workflow. By freeing them of unnecessary frictions, each employee will have space to develop into their best selves—and in turn, your business will flourish too.
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