What is Employee Engagement?
Is ‘employee experience’ merely the next shiny new thing?
The pandemic has heightened focus on the concept, bringing ‘experience’ into sharp focus for employees themselves and reminding employers of the importance of understanding what employees are experiencing at a difficult time. The pandemic may also have accelerated employers’ focus on the ‘whole person’, creating an urgent imperative to identify and deliver the elements of employee experience that matter most in the moment, and for employees’ ‘whole life’, not just their work life.
However, growing interest in employee experience predates the pandemic. For example, Google Scholar shows that scholarly articles on employee experience began to sharply increase from about 2010, and in our interviews for this research HR leaders described organisational journeys with employee experience beginning over the last two to five years.
What does ’employee experience’ mean exactly, and how can it be operationalised in a practical manner to bring concrete business benefits? Answering these, and related questions, is the purpose of this Speed Read.
WHAT IS EMPLOYEE EXPERIENCE?
There are dozens of definitions of employee experience, none of which are universally agreed upon or scientifically validated.
We adopt the Institute for Corporate Productivity’s (i4cp) definition:
Employee experience is “the whole of what people encounter, observe, and feel before, during, and after the course of their employee journey at an organisation.”
This is a broad, expansive definition. In our interviews for this research, we sought to better understand what employee experience means in practical terms. Several key themes emerged. HR leaders told us that:
- Employee experience is contextual. Both external and internal contexts influence employee experience. The pandemic has been a major external contextual factor that has influenced organisations to give immediate, and perhaps greater, attention to certain aspects of employee experience such as wellbeing and flexibility. Equally important is the internal context of a business – your workforce, its needs (do your people want more flexible rewards? Improved learning opportunities?), and the opportunities and constraints for meeting those needs.
- Employee experience is rooted in the organisation’s strategy. It begins with the needs of the business and its workforce. What is the unique business problem you’re trying to solve? A ‘good’ employee experience will differ between organisations. There is no one-size-fits-all checklist, though it can be useful to have an internal framework and to identify boundaries for experimentation.
- Employee experience is employee-driven. Interviewees told us that employee experience is, among other things, about “making the most of an employee’s potential”, “understanding what people need to thrive, be creative and innovative”, and “figuring out what makes someone want to stay, and be an advocate when they leave”. If any of these things are to be accomplished, it’s clear that employees’ voices have to drive the conversation. Otherwise, the designers of the employee experience (HR or others) are just creating an experience that suits them and that has an increased risk of failure to meet its objectives.
- Employee experience is intimately linked to customer experience. The thinking is that employees who are having a great experience are more likely to deliver a great customer experience.
- Employee experience is consistent. Throughout an employee’s journey with an organisation there should be a consistent experience. It’s not enough to craft great candidate and onboarding experiences and then forget about the rest. These initial standards must be followed through for performance, growth, exit, and when relevant, for alumni too.
- Employee experience is dynamic. Business and employee needs are continually evolving as the external context changes, business strategy shifts, and as the demographic makeup of the workforce shifts. Therefore, an organisation’s approach to employee experience needs to be dynamic, flexible and up-to-date. There is no end state of employee experience.
- Employee experience is more than just process. Employee experience has a process angle. However, a narrow process-focused view ignores the fact that many of the moments that matter to an employee sit outside processes and procedures.
- Employee experience is not the same thing as employee engagement. It can be helpful to think of the difference in terms of inputs and outputs: employee experience is the input, while employee engagement is the output. If a company ‘gets employee experience right’, the hope is that the result will be more engaged employees.
WHAT FACTORS ARE DRIVING INTEREST IN EMPLOYEE EXPERIENCE?
Many factors are driving interest in employee experience, and these factors are specific to the organisation. Some of the most common cited in our research are talent attraction and retention (exacerbated by the pandemic), and changing expectations of employees (greater flexibility, purpose in their work, a responsible organisation from an ESG perspective, etc.). Many of our interviewees cited a desire to use employee experience to increase engagement and solicit the associated benefits such as improvements in productivity and employee wellbeing.
WHAT ARE THE BENEFITS OF IMPROVING EMPLOYEE EXPERIENCE?
Perhaps unsurprisingly, the evidence base for employee experience is still small. Definitions of the concept vary; and widely agreed, robust measurements have not yet gained traction. In the literature, there is still more theory than science-based evidence.
Yet some of the more robust studies of employee experience offer grounds for optimism:
- A 2018 study from IBM’s Smarter Workforce Institute found that organisations that score in the top 25 percent on employee experience report nearly three times the return on assets and double the return on sales, as compared to organisations in the bottom quartile.
- A 2016 survey of 281 executives by the MIT Sloan School of Management found that companies ranked in the top quartile for employee experience, when compared to those ranked in the bottom quartile, experience twice the innovation (51% of revenues from new products and services introduced in the last two years, as compared to 24%), double the customer satisfaction (industry-adjusted Net Promoter Score of 32 as opposed to 14), and greater profitability (73% to 58% profitability compared to competitors).
In the interviews conducted for this research, participants cited higher engagement, increased productivity, improved employer brand, and more effective attraction and retention as a result of enhancements to employee experience.
WHOSE RESPONSIBILITY IS IT, AND WHO IS IT FOR?
In our discussions for this research, HR leaders were clear that a great employee experience requires buy-in, collaboration, and participation across (and beyond) the organisation. While HR plays a crucial role in orchestrating and supporting employee experience, others are needed to execute and bring a great experience to life.
- The HR function
We asked survey respondents who is primarily responsible for employee experience at their organisation. The HR function was by far the most commonly cited actor – cited by 47% of respondents. Our interviewees highlighted three issues with respect to HR’s role in employee experience:
- Capability. People working in HR need the skills – technical and soft – to design and implement employee experience. This includes everything from the right mindset – for example, considering how to make a process work for the employee, not for HR – to practical research and design skills.
- Reputation. Too often, employees believe that HR doesn’t want to talk to them, or that HR will not take an independent view from what a line manager has said or decided.
- Relationships. Things that HR does in isolation are very difficult to embed. HR has to have good quality relationships with the right stakeholders to effectively implement a great employee experience. These relationships include senior leaders who sponsor and advocate across the business, implementation partners from multiple functions, and advocates in the employee base.
- Senior leaders
Senior leaders are vital to communicating vision and purpose. Many of the HR leaders we spoke to emphasised the importance of having senior leaders clued in and attentive to the depth and breadth of the work required to make a great employee experience. Employees won’t buy it unless senior leaders themselves buy in, role model, and communicate what employee experience is about in the organisation and why it is important.
- Line managers
Line managers are essential to the delivery of a great employee experience. They own the relationship between the company and employees, and thus disproportionately impact employee experience. They are the ones that do the work on the ground, pushing messages through and creating the day-to-day lived experience of their people. Thus, it is important that they receive the necessary training and support to do so effectively, including recognising and sharing good practice. The manager’s manager should also be a key player, but this relationship tends to be neglected in modern HR.
Several of our interviewees highlighted the importance of the relationship between HR and Communications colleagues. Communications are essential for how you package and present the experience. HR can help shape messaging, while Communications colleagues know the best methods and channels for disseminating messages, and for capturing and responding to any feedback.
- Colleagues that support the execution of employee experience
HR will need to partner with colleagues across a variety of functions that have a material impact on the execution of employee experience. For example:
- IT – how easy is it to get help? Does equipment for new hires arrive on time?
- Finance – is expense reporting straightforward? Are company credit card and payroll issues sorted?
- Brand/Marketing/Customer Experience – Is the employee experience consistent with the broader brand experience? If not, this will be a problem. Ideally, products/services will be reflected in the behaviours of leaders and managers, which in turn file through to the day-to-day life of employees. It’s easier for an organisation’s people to deliver a great customer experience if they identify with the brand themselves.
- Facilities/Real Estate – have the proper arrangements been made to facilitate hybrid working and a sense of safety?
- External relationships
Relationships external to the organisation also play a key role in employee experience.
Those organisations that are partners of, and act on behalf of, the organisation but also directly impact the employee are very important. For example, recruitment agencies, healthcare providers and outplacement services should be well-briefed and aligned to the organisation’s values. The same is true of external consultants used as training partners – they should be recruited and inducted in such a way that they feel part of the organisation. This facilitates open and well-informed conversations with staff.
- All employees
Finally, all of a company’s employees (up to and including the Board) have an important role to play in employee experience. As participants in a focus group for this research pointed out, it’s up to all employees to live and breathe the organisation’s mission, purpose, and values. The HR function can’t ‘own’ that – it’s a shared responsibility.
WHO IS IT FOR?
Theorists and practitioners alike argue that employee experience should take into account not only in-house, full-time colleagues, but the larger blended workforce. It’s about creating a good experience for part-timers, contractors, freelancers, alumni, and candidates too.
However, we find that most organisations are focusing their attention on full-time, in-house staff. We also see limited differentiation of experience by demographic factors, job level, geography, and so on. This is a missed opportunity given that strategic business needs will require a differentiated approach at most organisations.
For example, if your business relies heavily on a contingent workforce, how are you differentiating the experience to attract and retain those workers? If developing critical talent is key, what types of experiences should you be designing for this segment of your workforce?
Stages, Aspects, Enablers – A Framework for Thinking About Employee Experience Strategy First
The temptation for some organisations is to take a ‘kitchen sink’ approach to employee experience, engaging in a wide-ranging but random mishmash of activity. Others may take a one-size-fits-all approach. They may mimic the approach that another organisation has taken without considering the business end that they are trying to achieve.
Instead, HR, together with senior business leaders and other key stakeholders, needs to engage in a process of thinking through what’s right for their organisation. Approaches to employee experience should be tailored to the organisation, its culture, its particular challenges, and the stage of maturity it’s at.
The following questions can help you think through how to develop a more strategic approach to employee experience.
- What is the business strategy? What’s the context? What are the goals and objectives? What workforce outcomes do you need to change to support it? Understanding the strategy is important because it has implications for what the organisation will need from its people, and conversely, what people will need from their organisation. If your business strategy envisages the rapid creation of compelling new products or services, you may need to focus on what aspects of day-to-day employee experience foster – or create barriers to – innovation. If you are planning a restructure, you may need to think about the quality of your exit and/or alumni stages of the employee journey, keeping in mind potential reputational risks and impacts.
- What are the current pain points? Organisations need to take the time to identify and understand the specific challenges their workforces are currently facing, in order to fix problem areas first. Is onboarding fit-for-purpose? Are your people burning out? Are you losing people because of limited opportunities for growth and development? What’s really difficult in the employee experience right now, for whom, and why?
- What activities and interventions are needed? Employee experience is a complex concept. Deciding what to do about it will involve making decisions about what stage of the employee journey is involved, what aspects of experience it’s critical to get right, and what enablers will help the organisation achieve its overall goals.
- Are there processes in place to evaluate and evolve the employee experience strategy?Evaluation is a weak point for many organisations, but it is an important tool for measuring the effectiveness of a given activity or intervention. Organisations should be able to measure whether an activity had the desired result, in terms of impact on both individual and organisational outcomes. Evaluation is also important for determining how the strategy should evolve. This involves considering what an organisation needs to do more or less of, and how needs are shifting among different segments of the workforce.
CRF’s EMPLOYEE EXPERIENCE FRAMEWORK
CRF’s Employee Experience Framework has been designed to highlight the different stages, aspects, and enablers of employee experience that you will need to think about as you try to design solutions. The framework is a tool for asking questions and thinking things through; it is not an employee-centred methodology for ‘doing’ employee experience.
STAGES OF THE EMPLOYEE JOURNEY
There are different stages that employees go through on their journey with a company. As such, employee journey maps can be highly detailed – one map we encountered in our research identified ten different stages of the employee journey.
We identify five core stages, illustrated in a circular manner to reflect that the employee journey isn’t always strictly linear. It’s also important to note that while HR and other functions benefit from having some sort of mapped journey, individual employees’ journeys are entirely personal and as such will vary in practice.
Companies will want to align their objectives to these stages. Do your business goals require you changing something about how people are attracted? Then you will want to look closely at the candidacy stage of the employee journey, and perhaps also the exit and alumni stages (if you want to re-attract top talent or attract referrals, for example). Is retention key? Then you will probably want to look at aspects of experience related to performance and growth; equally, you may want to give attention to the exit stage of the employee journey, as the people you want to retain are watching how these are handled.
Identifying the stages that you need to focus on will in turn help you identify the aspects of experience that require attention at that stage.
ASPECTS OF EMPLOYEE EXPERIENCE
By ‘aspects’ of employee experience we mean the critical moments or ‘moments that matter’, that are likely to occur in the employee journey. These can make or break the employer-employee relationship. In the model, we have aligned to each stage of the employee journey some of the critical moments that our interviewees identified. A crucial point about these aspects of employee experience is that each organisation will be unique in which ones are important in relation to their business needs.
With limited time and resources, it is not possible for most organisations to identify and perfect every aspect of employee experience. Nor is it desirable, as why spend limited resources on an aspect that doesn’t matter for your particular people and business needs?
Thus, the emphasis on strategy and prioritisation. For example, an organisation that is trying to improve the gender diversity of its succession pipeline might prioritise the employee experience of returning from parental leave; an organisation seeking to retain top talent might prioritise the experience of transitioning to and from international assignment.
The key task for an organisation is to identify which aspects of employee experience, at each stage of the employee journey, are critical for meeting their business goals and objectives, and to regularly review and update as business strategy, external factors, and/or workforce needs change. No small task!
Our interviewees highlighted other key points about these critical moments.
- Critical moments can be positive or negative. Ideally this has a temporal aspect in that negative moments get fixed, while positive moments are more enduring.
- Critical moments are about how people genuinely feel, not about the process or the tool. Showing care and making the moment easy to navigate are important. While there may ultimately be a process behind the moment, the person’s experience in the moment needs to be curated and personalised.
- Critical moments are highly personal. Moments that matter to one person may not matter to another. The focus is likely to shift depending on the employee.
- Critical moments often occur at points of transition. These include joining or leaving the company, moving to another department, departing for or returning from parental leave, sabbatical, international assignment, and compassionate leave, among others.
- Data is essential for identifying critical moments that need to be fixed. For example, net promoter scores, feedback from employee surveys and performance metrics for key HR processes can be triangulated to identify priorities.
Once an organisation has identified the different aspects of experience at each stage of the employee journey that are critical to get right, the work can begin. Working through each stage and aspect, you will want to identify the gaps between the current experience and an experience that will address business objectives and employee needs, while being authentic to your unique culture and values.
ENABLERS OF EMPLOYEE EXPERIENCE
The final component of CRF’s Employee Experience framework is comprised of those levers that organisations can pull to enable a great experience. We have identified eight potential enablers of employee experience and have placed them at the heart of the diagram to illustrate their foundational importance.
It is often the case that multiple enablers are needed to execute a given aspect of employee experience in the most positive way.
For example, an employee’s experience of departing for and returning from parental leave will likely be influenced by their relationship with their line manager, the quality of policies and how they are communicated, role modelling from senior leaders, the organisation culture, and perhaps the quality of the technological tools that support the process.
An employee’s experience of their initial orientation and training is likely to be highly influenced by technology, line managers, and communication practices.
See our full report for a detailed look at how and why each of these enablers matters. Here, we note a few key points.
- Leadership practices/behaviours – Senior leaders are key. Do they signal the importance of employee experience to the organisation? Are they committed, skilled communicators and role models? For example, if highly flexible working is a cornerstone of the organisation’s employee experience, do senior leaders live this experience, or do they adhere to long, rigid, office-based hours? How is HR keeping leaders informed of what’s going on in the experience, and helping them build their role modelling and communication skills?
- The cultural environment – Employee experience is more likely to thrive in inclusive, socially supportive environments. Inclusive cultural environments also tend to foster emotional, not just transactional, connections among colleagues and to the organisation, which is important given the strong emotional component of employee experience.
- Management practices/behaviours – Managers have a disproportionate impact on their team’s day-to-day experience. Unfortunately, they also have huge demands placed on them and are often incentivised to hit financial targets rather than to deliver great experiences to their people. Managers need support for the broad range of things they are asked to do, especially as the line between work and life continues to blur; as the same time, different managers have different needs – for example, what are the priorities and needs of a manager in a call centre team as opposed to a head office team? Data can help your managers understand their team’s experience, recognise problems, and make improvements.
- Communication practices – Communication is vital because it brings employee experience to life. Language is important – it conveys values, builds trust, and draws people in. Listening is a key practice and organisations are getting savvier at it. Organisations are moving towards more frequent listening, but still need to pause to analyse and act, otherwise people will grow fatigued and possibly cynical. The most advanced organisations listen in ways other than just through surveys (for example, by listening to Employee Resource Groups, analysis of unstructured data, Town Halls, social media, and so on).
- Technologies/tools used – Technology impacts multiple aspects of experience, from self-service to learning to connecting people. It will frustrate and disengage people if it isn’t easy to use, yet many companies feel behind the curve on implementing great tech. HR can be a flawed decision-maker with respect to technology – HR professionals sometimes lack confidence as buyers, or buy things that make it easier for HR rather than easier for employees. There is an emerging need for an ‘experience layer’ with regard to technology – enabling employees to go to one place for all tech-related needs, rather than logging into multiple systems to meet multiple needs.
- Job design – This is critical but sometimes forgotten. Is one’s work actually interesting? Do they have autonomy? Are they fairly remunerated? Do they have opportunities to learn and grow, and to have their voice heard?
- The physical environment – Is it safe? What is its purpose now? How do we use it to foster positive experience? There are very open and unsettled questions around the physical environment and employee experience at this stage of the pandemic.
- HR policies – Are they clearly worded, accessible, equitable, and designed for people rather than for the company or for HR itself?
BARRIERS TO SUCCESS
Organisations encounter many challenges as they try to improve employee experience. Some of the most common cited by our interviewees include:
- Siloed functions. Often, there are pockets of good work in an organisation, but a lack of strategy or coherence hobbles reach and can make it difficult to get buy-in from senior leaders.
- Lack of common language and definitions. Getting everyone onto the same page with respect to what employee experience means and how it is talked about is a critical first step.
- Whose voice, when? How do you meet employee needs when the needs aren’t clear or are contradictory? Whose voice is loudest, and why? Generally, greater tension around contradictory needs is a by-product of greater diversity in an organisation.
- HR capability. Does HR have the research skills to do employee experience work? There are issues around both building and maintaining this skillset across HR.
- Inauthentic employee experience. Is the actual employee experience divorced from the brand? A disconnect between rhetoric and reality is a massive challenge and a quick way to build frustration and mistrust.
Methodologies and Evaluation: How Do We ‘Do’ Employee Experience, and How Do We Know Our Interventions Are Working?
Crafting an outstanding employee experience is about more than just ensuring employees feel listened to or heard – it’s also about how organisations involve employees in defining and co-creating solutions. The most advanced organisations are using collaborative design methods that allow employees to influence the outcome and design of the experience.
- Design Thinking is the leading methodology for activating employee experience. Design Thinking is a powerful, flexible tool that works in many contexts, allowing people to collectively define and resolve problems. See the Post Meeting Notes from our Design Thinking workshop for a detailed look at the methodology.
- Hackathons are another tool for co-creating solutions with employees. Hackathons are design sprint-type events, in which a wide range of organisational actors collaborate intensively to solve a problem. The idea is to focus on a specific problem and to have some sort of prototype of a solution by the end of the hackathon session. Hackathons tend to be most successful in organisational cultures that are already high involvement in nature.
- HR faces a challenge in upskilling in collaborative design methods. Design Thinking and other collaborative design methods require a shift in mindset that may be quite significant for some people. HR has work to do in defining what skills and capabilities are needed, ensuring it has those skills, and most importantly, figuring out how to bring those skills broadly into the organisation.
- A structural question underpins ownership of employee experience and collaborative design. Collaborative design methods mean having employees involved in the design, but who are they collaborating with? Hopefully not just a team from HR! Cross-functional teams should spearhead employee experience and collaborative design work.
Evaluation is often a blind spot for HR. According to our survey, just over a third of organisations – 37% – consistently or often evaluate the effectiveness of their employee experience programme, while 27% do so seldom or never.
When organisations do assess the impact of their programme, they most commonly do so by looking for changes in employee engagement, retention, and wellbeing. Impacts on productivity, customer experience, and revenue/profit growth are the least often measured outcomes.
Some practical pointers about evaluation:
- The evaluation strategy should be defined up-front. Success criteria should be defined in advance and tied to business objectives. It will likely include measurement of both business and HR metrics. Cobbling together evaluation after-the-fact is likely to provide insights of questionable value and relevance.
- With respect to HR metrics, evaluation should always include analysis of different categories of worker. This allows the organisation to really burrow down into the data. For example, if flexible working is a key part of employee experience, do different groups feel equally able to take advantage of the opportunity? If inclusivity is a key part of employee experience, is it hitting the mark, or are there certain segments of the workforce that feel less included?
- Proving cause and effect is always extremely challenging. Yet, the perfect should not be the enemy of the good. Establishing correlations between interventions and outcomes can provide useful information to the business.
- Interpretation is as important as the raw data. Analysts should be looking for the implications of evaluation data. What’s proving challenging? Where is the employee experience moving ahead, and where is it falling behind? What are the relevant and actionable insights that the data reveals?
- Start with your business strategy. What are the relevant business and industry issues? This will guide what opportunities you have to differentiate your employee experience and gain competitive advantage. Remember that you have to meet the ’table stakes’ too – the basics, upon which you can build.
- Fix your pain points. Use data to identify and understand the specific challenges your workforce is currently facing in order to work out priority actions to repair problem areas. What’s really difficult in the employee experience right now, for whom, and why? Beware ‘unrepairable moments’ that forever damage the employer-employee relationship.
- Assess your structure. At many organisations, the HR function has responsibility for employee experience in collaboration with other functions and stakeholders. Given that collaboration across functions is one of the main challenges in implementing an improved employee experience, it’s helpful to take time to assess whether you are structurally configured in the best way to support employee experience. Does it make sense to have Facilities or parts of IT structurally associated with HR? Who needs to work together, and how, to meet your organisation’s particular needs?
- Segment the employee experience. One employee experience does not fit all, neither across nor within organisations. Identify which groups within your workforce will need a different approach, depending on your business needs. For example, if your business relies heavily on a contingent workforce, how are you differentiating the experience to attract and retain those workers? For many organisations, critical talent will be a key segment for which differentiation is needed. What are the types of experiences you need to be designing to retain and develop the most pivotal people in your organisation?
- Use a framework to guide development of your employee experience strategy. Don’t do something just because someone else is doing it, or rely on tinkering around the edges. Once you’ve identified your industry and business challenges and goals, use a framework to go step-by-step through the employee journey, identifying pain points, table stakes, and key opportunities for differentiation. Think about what levers you can pull to enhance experience for all stages and aspects of the employee journey.
- Think about who needs to be upskilled to support employee experience. Do senior leaders need help with communication and role modelling? Would line managers benefit from training in how to have better conversations, or the basics of good management? Who might benefit from upskilling in methodologies such as Design Thinking – HR, managers, everyone?
- Co-design solutions with employees. Listening to employees is a great start, but remember that the most effective employee experiences are those co-designed with employees themselves. People know a great deal about what will work for them. Use methodologies such as Design Thinking to empathise with employees, define problems, and ideate, prototype, and test solutions.
- Use business metrics, not just HR metrics, to evaluate success. Changes in employee engagement, retention, and wellbeing may be important to measure, but impacts on productivity, customer experience, revenue and profit growth, time to market (and so on) may be equally important. Design your evaluation strategy up-front and take care to include metrics that fit your business goals. Taking this approach, you are likely to end up with a mix of HR and business metrics.
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