The mystery of Employee Experience - what is it all about?
Today everybody is talking about "Employee Experience" (EX). But why? Read this article to get a brief introduction on the topic and gain insights into where EX comes from. Beyond that you will learn which influence EX has on HR(-IT) projects and how a typical EX project approach could look like.
Why should companies care about EX?
Employee Experience - one of the latest trends in HR. What exactly does it mean? What are the benefits of employee experience (EX), for the company as well for the employees? Is it here to stay or will it be replaced by next years' trends?
Studies show, that creating a better employee experience leads to more engaged employees. Employees with high engagement levels are shown to be more productive and act in the company's favor, which results in a positive effect in profits. Engaged employees will not only affect financial business performance, but also a company's reputation. Employees will speak openly about their affection towards their organization, which will influence their private surroundings as well as the customers they engage with.
IBM studies have even linked employee experience to retention rates, discretionary effort, and work performance. Moreover, they have found that employee experience can be connected to a higher return on assets and sales. Companies with high levels of employee experience show higher revenue and profits than those who do not focus on employee experience and therefore have less engaged employees. (IBM Smarter Workforce Institute
Where does "Employee Experience" come from?
Knowing that employee experience is important to companies, we should take a closer look at its origins. Therefore, let us start with a rough summary of the economical evolution. Originally, we harvested, extracted, pulled things out of the earth, and sold them solely based on price. They were a commodity (economy of commodities). We then took these commodities and manufactured, packaged, and processed them into goods to get an even higher price (economy of goods). Goods have now been commoditized as well and decisions are once again based on price. To be able to differentiate, we started delivering services with the goods - and charge an even higher price (service economy). With the internet boom even service-based industries have commoditized. Almost everybody goes online and takes decisions based on price. In response, we have evolved into the Experience Economy. Experience Economy is no longer about only saving time and great customer service, it is about time spent well. Time is the one thing we cannot make more of, so the discussion is no longer about price but value. (See also: https://www.forbes.com/sites/colleenreilly/2018/10/22/experience-economy-its-no-longer-about-the-product/.)
The term "Customer Experience" was born and relates to the totality of cognitive, affective, sensory, and behavioral consumer responses during all stages of the consumption process including pre-purchase, consumption, and post-purchase stages. Employee Experience evolved by applying customer experience principles to Employee Journeys (from Job Seeker Experience, over New Hire and Day-to-day to Alumni Experience), with the objective to increase employee engagement and business results. A definition of Employee Experience is "Employee Experience [...] is a company-wide initiative to help employees stay productive, healthy, engaged, and on track. It is no longer an HR project. It is now an enterprise-wide strategy, often led by the CHRO in partnership with the CIO. And it deals with all the day to day issues employees face at work." (Source Josh Bersin, https://joshbersin.com/2021/01/the-crusade-for-employee-experience-how-did-we-get-here/) A good Employee Experience can have a direct positive effect on sales, earnings, productivity, customer loyalty, fluctuation rate and sick days.
Does awareness of Employee Experience have an influence on HR(-IT) projects?
With this "new" awareness more and more HR(-IT) projects change from being process-driven to more experience-driven.
In short, the typical process-driven process design was to (1) define efficient Business Processes (often based on standardized software) and to optimize these processes for the specific organization, (2) to define the target roles and job profiles and then (3) to conduct Change Management to ensure the employees adhere to the new model. In other words, the function responsible designed a process as efficient and effective as possible and the affected employees had to stick to these new processes - also called an inside-out approach.
Experience-driven process-design on the other hand starts with (1) defining the experience that you want your (internal) customers to have and (2) defining the supporting tools and processes in a second step. But since the experience is optimized from the employee viewpoint, (3) less extensive Change Management is required. This is also called an outside-in approach.
What does a typical "Employee-Experience-Project" look like?
Of course, every project is organized a little differently but in general a typical project enhancing the Employee Experience of an organization has 5 phases.
- Design of the Employee Journey incl. Moments that Matter and Touchpoints
In a first step an end-to-end understanding of the full Employee Journey needs to be gained. An often-used Employee Experience Framework (EX Framework of TI People) is based on 6 stages: Explore (Job Seeker experience), Consider (Candidate Experience), Begin (New Hire Experience), Work (Employee Day-to-Day Experience), Leave (Leaver Experience) and Reconnect (Alumni Experience). For all these stages so called ‘moments that matter' need to be defined. In HR, 'moments that matter' are the moments that impact an employee's organizational experience most significantly throughout their day, year, and career. For example, one moment that matters in the stage of "Begin" could be the first day of a new hire. The third component for a good end-to-end understanding is to also think about the touchpoints (humans, physical and digital) for each identified moment that matters. Those "moments that matter" can differ between companies. For example, for employees in Company XY their company anniversary could be important, whereas employees in company YZ, a start-up, rather care about their first day in the office. Often several workshops are conducted to assess the specific moments that matter within the Employee Journey of the company.
- Listen to the employees (e.g., survey)
One of the major learnings of companies having conducted Employee Experience projects is that the actual problems lie beneath the surface. That means, if you really want to address and improve the pain points of your employees you must listen to them. A common procedure is to conduct an employee survey and query all previously defined moments that matter to get feedback from along their complete employee life cycle.
- Decide on scope and prioritize improvement areas (e.g., choose pilot projects)
Based on the data gained from step 2 it is advisable to focus on a few pilot projects or to prioritize improvement areas.
- Design and implement improvement measures
Most companies start with design thinking workshops and the design of prototypes: For a concrete timescale, for specific personas, for a concrete scenario, defined through a series of touchpoints, including a clear design of channels, considering the persona's thoughts and emotions, built around a clear understanding of moments that matter.
While step 1 to 3 is typically owned by the EX-Core Team, the implementation and realization of the improvement measures (step 4) is operated by the process or function responsible itself (e.g., HR Manager). He or she is also responsible for the effectiveness of the newly designed measures, and not the EX-Core Team.
Whether your measures are increasing the Employee Experience, you can only determine by listening to your employees again.
Can EX be measured?
Now that you know what a typical Employee Experience project should look like, it would be interesting to measure the success of such a project, which ideally is an increase in EX. Therefore, the next logical question is: How can EX be measured? As always, there is no one-fits all approach, and as common in academics there are various theories and recommendations. However, in our experience most companies have chosen a practical approach when it comes to measuring the employee experience within their workforce. As employee experience has evolved from the concept of customer experience, companies tend to apply similar measurement methods. The two most famous metrics in this area are:
- Net Promoter Score
The Net Promoter Score (NPS) measures customer (or in our case: employee) perception based on one question: "How likely is it that you would recommend <your organization> to a friend or a family member?"
Employees can answer on a scale from 0 (not at all likely) to 10 (extremely likely), whereby people with responses from 0 - 6 are categorized as detractors, 7 - 8 as passives and only responses of 9 or 10 are categorized as promoters. The NPS is then calculated by the percentage of promoters subtracted by the detractors' percentage.
- Customer Effort Score
The Customer Effort Score (CES) is a metric that measures how much effort it takes customers (or again in this case your employees) to solve a specific problem. Therefore, they are asked the question "Overall, how easy was it to solve your problem today?". They can then answer on a scale ranging from "very difficult" to "very easy".
The CES has been shown to outperform the NPS and customer satisfaction measures in predicting behaviour.
Those two questions can be asked in form of pulse-surveys at pre-defined moments throughout the employee journey. For example, after an employee's first day at work he or she could be sent an invite to a pulse survey asking, "Based on your experience today, how likely is it that you would recommend our organization to a friend of family member?" and "Overall, how easy was your first day at work?". By conducting those pulse-surveys only at moments-that-matter rather than asking every employee to fill out a survey every day you can avoid survey-fatigue. Combine those pulse-surveys with a few more in-depth experience and engagement surveys and you will get meaningful insights into your workforce. Using this combined data, you can create heatmaps about the two indices and different sub-topics across various business units, highlighting areas of action. It is important to act on the findings of this data, as otherwise your employees will be demotivated and will also no longer be keen to participate in the survey.
Should EX only be part of the HR department?
As EX is not only about collecting data but improving the employees' experience in their daily work life, an organization's EX team should ideally consist of a core team and then added team members depending on the tackled pain point. Those additional team members should work in the affected area as they are familiar with the topic and can work on appropriate improvement methods. The EX-Core Team should support the process as an integrative community manager and provide guiding principles and tools to enable their colleagues. There can be EX teams that focus on global topics as well as EX teams focusing on regional pain points.
Has the pandemic changed EX somehow?
In the wake of the COVID-19 pandemic hybrid workplace models (office/home office) have become the standard. To reflect this, companies address EX in 3 major areas: Human Interaction, Physical and Digital. Specific parameters drive the experience in those areas, like new and a lot more flexible office spaces (Physical), newly designed HR E2E digital process workflows, new focus on wellbeing approaches (Human) or new software to e.g., foster innovation in a remote team setup (Digital).
It becomes more of a challenge to create a distinctly human way of working in a highly technical world and work environment.
binder|consulting brings EX and design thinking expertise, neutral viewpoints, HR technology insights and implementation experience to your specific challenges.
If you want to learn more about Employee Experience and how it can help your organization to be more successful - please get in touch.
Written by: Dr. Ralph Köppen