This guide was written in partnership with Annette Franz, CCXP, CEO, founder of CX Journey Inc.
When it comes to designing and delivering a better experience for your customers, there’s a real missed opportunity for most businesses that could turn the tide. The hidden gem that is actually at the root of great customer experience (CX) is an organization’s employees.
Businesses shouldn’t just focus on the customer; in order to deliver a great customer experience, they really have to start with designing and delivering a great experience for their employees. Leaders must treat them as humans, not like cogs in the wheels of corporate success.
In Jeffrey Pfeffer’s book, Dying for a Paycheck, he states that “In one survey, 61 percent of employees said that workplace stress had made them sick and 7 percent said they had actually been hospitalized.” Also, “Job stress costs US employers more than $300 billion annually.”
There’s certainly a business case for caring for employees and ensuring they have a great experience. So how does a business address the employee experience (EX)?
Designing a great experience for employees requires cross-functional collaboration and ownership–much like all other CX initiatives. it should be part of the governance structure, assigned to at least one committee member; whether that is an HR representative or a CX leader, it’s up to the organization.
This guide covers the key elements of a successful employee experience program, the power of employee feedback, and how to prove that happy teams impact customer experience and the bottom line.
What is employee experience?
Employee experience (EX) is the sum of all the interactions that an employee has with their employer during the duration of the employment relationship.
It includes any way the employee “touches” or interacts with the company and vice versa in the course of doing their employment. It also incorporates the actions and capabilities that enable them to do their job. And, importantly, it includes their feelings, emotions, and perceptions of those interactions and capabilities.
Is it benefits and perks? Absolutely not. A lot of companies mistakenly think that, because they offer free snacks and beer on Fridays, they’ve checked the employee experience box.
It’s not culture. Employee experience and culture are two different concepts, although culture certainly plays into or affects the employee experience. Culture is values plus behavior. It’s what employees do when no one is looking. It’s the energy or the vibe of the place. Great cultures make for a great experience, no doubt; toxic cultures drain and demoralize and make for painful employee experiences.
It isn’t the same as employee engagement. Employee engagement is an outcome. Engagement comes from within the employee, although the company has a role in it, as well. Employee engagement happens when there’s a confluence of: (1) emotions, commitment, passion, sense of ownership, etc. on the part of the employee about the brand and (2) what the organization does (mission, purpose, brand promise, employee experience, etc.) to facilitate and enhance those emotions or that commitment.
The definition of employee experience states that it’s the sum of all the interactions an employee has with the company that employs them. These interactions can occur during any of the following situations (and more).
Application, interview, and job offer
While these are technically part of the candidate experience, they are a potential employee’s first impression and initial introduction to how the company treats prospects and current employees.
This meeting or series of meetings is the employee’s real first introduction to the inner workings of the organization. Sadly, some companies fail to make this a formal meeting or process, while others make this all about the company, when it also needs to include details about the employee, their experience, success, etc.
This is another area where companies need to place a stronger focus and set the employee on the right track to succeed from the get-go. You should help them understand their role, colleagues, connection to ultimate outcomes, and more. Teach them about the culture, the customer, and the customer experience. Onboarding doesn’t just happen in a day or two. Consider spending a week or two (some companies do more) to ensure employees are well integrated into the business.
Training must be ongoing during an employee’s employment with a company. This can’t just be a one-off. Employers must invest in their employees, help them grow, keep them current, give them the know-how to advance their skills and to be more productive. If you ask them, they will tell you they want to learn and continue to be challenged.
Doing the job
There are a lot of interactions that happen during an employee’s journey within an organization. These might occur with a manager, a direct report, a colleague, an executive, a customer, a vendor, etc. To capture them all, you can use surveys, journey mapping, and word-of-mouth.
Giving ongoing feedback, not just at an annual performance review, is another interaction that must be executed well. Providing feedback throughout the year ensures that employees don’t have any surprises–ever, but especially during annual performance reviews. Conduct stay interviews, not exit interviews. Understand what keeps employees at your company; don’t find out when it’s too late why they left.
Many folks don’t take into account or consider life events as part of the employee experience, but they are. How the company treats employees during critical life events, e.g., wedding, baby birth, an illness, family care, funeral, etc., shows how much they truly care about them.
Setting the employee on a path to career success from the start is an important component of the employee experience. Career pathing and management must begin during the onboarding process and continue with regular conversations throughout the employee’s tenure with the company.
When employees leave the company, it’s no different than when a customer cancels a contract: make it graceful, easy, and painless. If you don’t, that’s a last (and lasting) impression, and they will tell their friends and peers. This could impact future brand loyalty from customers, as well.
Actions and capabilities that enable employees
As mentioned earlier, employee experience also includes the actions and capabilities that enable someone to do their job. These go hand in hand with the interactions we just covered. Actions and capabilities can be broken down into two groups: the not-so-tangible and the tangible elements.
Below are the not-so-tangible (but still important) elements:
Growth and development: The employee and their manager must work together on setting career goals, developing a career plan, and working toward it.
Feedback and coaching: Managers should provide continuous constructive feedback about the employee’s performance, coach them on what they are doing well or not, and help maintain or improve their performance.
Recognition and appreciation: Leaders should recognize employees for living the company's core values and for the work they do. This can be done by sharing team members’ contributions and impact with the rest of the organization, saying a simple “thank you,” and showing gratitude–in whichever way–on a regular basis.
Leadership and care: There’s a lot that falls under leadership and care, but when leaders live a servant leadership (serve your employees and put their needs before your own) and/or truly human leadership (providing a caring environment where everybody matters) approach day in and day out, employees win.
Communication: Executives and managers must be open, honest, candid, and transparent with their communications on an ongoing basis, whether it’s sharing information about the company (e.g., sales, revenue, personnel, challenges, etc.), the department, or the individual’s performance.
Camaraderie and collaboration: Employees should be encouraged to “work together and play together.” Research shows that when they have friends at work, the experience is far better than when not. And managers must take a real and sincere interest in their staff, getting to know them on a more personal level in order to assist with delivering a better experience; employees should do the same with their co-workers.
Contributions: An important part of the employee experience is when managers convey and employees understand the impact of their work; that what they’re doing is meaningful and their contributions are valued. Let employees know the impact they are making on their customers and the business. Ensure they understand the company’s “why” and how they contribute to it.
Trust and respect: Leaders must create an environment where they earn employee trust and respect and where employees are trusted and respected. It’s a two-way street–trust must be earned by both parties. Similarly, respect must be given.
Psychological safety: Leaders should create an environment where there’s no fear of recourse for speaking up or speaking one's mind. Employees feel accepted, and they feel safe to not only speak up but to take risks.
Empowerment: Allow employees the freedom to do their jobs. Enable them to take the right actions and give them the authority to make decisions in their day-to-day roles that simplify their work and make things more efficient–for themselves and for their customers.
Wellness: Healthy employees are happy employees. Encourage and support healthy lifestyles. Provide support programs–whether it’s free counseling service or a gym membership–to keep them healthy and productive.
Success: When employees start a new job with a new employer, it’s not always about “just finding a job.” Many are on a self-defined path to professional success and need help getting there. The first step is defining what that means for each individual and then working together to ensure it happens.
Alignment: Employees aligned with the vision, mission, purpose, and values of the business will definitely have a better experience than those who aren’t. Hire accordingly.
These not-so-tangible elements are all essential and critical to the employee experience. But on top of being cared for, employees need to be able to do great work. And when they can’t, they’re not happy; customers feel it and the business does, too.
Companies should follow these five tangible elements:
Tools: This seems simple enough, but you would be surprised at how many employees start with a new employer without a computer or a desk waiting for them on their first day or within the first couple weeks. Tools can include a desk, computer, software, printer, scanner, phone, vehicle, actual tools (e.g., hammer), etc. Not every employee needs the same tools–e.g. a graphic designer needs different hardware and software then an accounts payable person–but they all need to be well-equipped from day one.
Processes: When there are no processes in place, employees make up things as they go. When there are broken processes, steps get missed, and things are done incorrectly. When there are old, outdated, and inefficient processes, they can be a waste of time. All of these processes can lead to pain for employees and inconsistent experiences for customers.
Policies: Outdated, ambiguous, or unfair policies are inhibitors for employees to do their best work. Employees come to work wanting to do a good job; get rid of these bad or outdated policies.
Resources: Ensure that employees have the training, education, books, documentation, management support, teamwork, collaboration, etc. that they need to do their jobs well.
Workplace and workspace: Is there a quiet place for employees to work? Is it clean and roomy enough to get work done? Can calls and meetings be completed without distractions or background noise? How’s the temperature and lighting? How’s the parking situation? There’s a lot to consider when it comes to the workplace and the employee’s workspace; make it easy and painless for them. This is especially crucial as more and more companies move to temporary or permanent remote work environments due to COVID-19.
Employees take pride in their contributions and are frustrated when they are inhibited from doing the work they were hired to do. Some of the biggest pain points of their experiences are most often about their inability to do a good job. Unfortunately, they can’t succeed if they aren’t provided with the tools, processes, policies, resources, and workspace needed to do just that.
While it’s common knowledge that employee experience plays a key role in the success of a company, there is still a lack of focus on it by leadership. Let’s address why this gap exists in the next section.
Employee experience gap
According to the Deloitte 2017 Global Human Capital Trends report, 80% of executives rated employee experience as very important, but only 22% said their companies excelled at building one.
That’s a big gap and a big problem. Why?
There are a lot of reasons, including:
It’s not a priority: Instead, it’s simply an annual engagement survey. You know by now that if you are going to survey an employee or a customer; you need to take action on what you learn.
No executive owner or ownership: For customer experience, the C-suite executive is typically a Chief Customer Officer (CCO). For many companies, there’s no real equivalent for employee experience; the work isn’t championed by–or hasn’t been assigned to–anyone in the C-suite. In theory, this responsibility should be owned by Human Resources, but this department often focuses on other elements, such as payroll and benefits. More and more companies are hiring roles like People & Culture Officer, that prioritize the employee experience.
Outdated listening tools and processes: It’s time to listen to employees in a variety of ways, not just that annual engagement survey. There must be pulse or transactional surveys, stay interviews, and other listening posts to understand and to engage with employees on an ongoing basis.
Disparate functions and disciplines: HR teams tend to focus on important elements, such as performance, diversity, wellness, workplace design, as singular initiatives throughout the year rather than as an integrated discipline that must work together.
In the same Deloitte report, 59% of respondents said they weren’t ready to address the “employee experience challenge.” This is most likely due to a lack of understanding of its importance or competing priorities.
Two years later, Deloitte’s 2019 report showed that 84% of respondents rated the need to improve the employee experience as important, while only 28% identified it as one of the three most urgent issues facing their organization in 2019.
There is much work yet to be done.
How to design a better employee experience
Designing a better experience for employees is rooted in the same principles as customer experience: take the time to understand their needs, pain points, and expectations. And then use that information to design and deliver a better experience.
Follow the same three guiding principles as you would for customers.
Ask, listen, and act
It’s important to listen to employees throughout the year, not just when you’re doing your annual engagement survey, which is designed to measure employees’ passion and commitment for organization and how those link to performance outcomes (Gallup’s Q12 Employee Engagement Survey is a popular example of this type of survey).
There are many types of employee surveys that cover a whole range of additional topics about the employee experience. Some more common ones include the following.
Used to gather feedback about the company’s culture and how well employees align with the core values. They include questions about the core values, vision, mission, teamwork, innovation, managers, and executives.
Climate (or satisfaction) surveys
Used to gather employee feedback and perceptions about the organization. They often include questions about job satisfaction, compensation and benefits, tools and policies, and the likelihood to stay or recommend the company to someone else. Click here for a free climate survey template.
Can be used at or after the various interactions mentioned earlier in order to understand the experience with the interactions. For example, you might send a survey to employees after the open enrollment period ends to gauge their satisfaction with the process, the options, or the support provided throughout the period, or you might ask how much effort it took to enroll. Click here for a free transactional survey template.
Used to allow employees to provide feedback about their managers, their direct reports, and their team/colleagues, as well as provide and receive feedback about their own professional development. Among these are performance appraisals, 360 reviews, and exit surveys.
Collecting feedback is also about listening to employees, not just asking. Have conversations, 1:1 meetings, and stay interviews. Create an employee advisory board. There are many ways that you can get feedback and learn more about your employees all year long.
Just like you would with customers, create a central hub to collect and analyze employee feedback and other relevant data. Take what you know about your employees (demographic, payroll, performance, and engagement survey data) combined with external data sources (labor market, population, LinkedIn data, etc.) to act on data-driven decisions in support of a better employee experience.
Who are your employees? Do you know what their goals and desired outcomes are? Do you know what problems they are trying to solve day in and day out? And what jobs they are trying to do–in their roles and with their careers?
Personas are research-based. It’s important that you don’t build employee personas based on groupthink or internal thinking within the HR group or among managers. And don’t build employee personas based simply on their role or function within the organization.
Not all managers are the same. Not all individual contributors are the same. Talk to employees. Interview them. Really understand who they are and what they are doing, feeling, and thinking. Get into their heads and hearts. It’s the only way that you’ll be able to design a better experience.
Walk in your employees’ shoes to really understand the experience they are having today. Select various experiences they have as employees–again, revisit the interactions mentioned earlier for ideas of where to begin–to learn, understand, and identify what’s going well and what’s not. This is the only way you can design a better future experience.
A service blueprint highlights the people, tools, systems, processes, and policies that support and facilitate the experience the customer is having. This is a major source for identifying pain points for employees. How hard is it for them to do their jobs? Look closely. Fix the issues behind the scenes in order to create both a better employee experience and customer experience.
These guidelines can only take you so far–you need to use what you learn to actually design a better employee experience.
The business case for employee experience
Similar to customer experience, executives often ask, “Why should we focus on the employee experience?”
Some executives get it, but many still don’t. Let’s start with some studies and statistics to show what is possible.
A 2017 MIT CISR Research Briefing highlights MIT’s research on employee experience. They found that companies in the top quartile of employee experience were twice as innovative, had double the customer satisfaction (reported via NPS), and 25% higher profitability than those companies in the bottom quartile.
Jon Picoult of Watermark Consulting did an analysis for employees, comparing the stock performance of employee experience leaders, or those who made Fortune’s 100 Best Companies to Work For vs. the S&P 500 in general. Clearly, the results speak for themselves: Fortune’s 100 Best Companies to Work For performance doubled the S&P 500.
Fortune did their own study and compared these companies to the Russell 3000 index, and the returns were phenomenal. The Best Companies to Work For index saw returns that more than doubled the Russell 2000 index returns. In their research, Fortune noted that “it’s the companies that employees say are great workplaces that demonstrate stronger financial performance, reduced turnover, and better customer and patient satisfaction than their peers.”
Linking EX to CX and business outcomes
You can’t shine the spotlight on employees and the importance of a great employee experience without demonstrating business outcomes.
To draw a very clear line from employee experience to business outcomes we can start with the graphic below.
The foundation of both the employee experience and customer experience is leadership and culture. Leaders must care about their people, and they must create a culture that puts people first. With that foundation in place, employees feel a sense of purpose and belonging; they feel appreciated and valued and they’ll be energized and enthusiastic about their work and the workplace. This all leads to employee happiness, loyalty, and engagement, as well as a more creative, innovative, and productive workforce that puts out quality work.
With that as their foundation, employees can deliver an experience for customers that leaves them feeling valued and achieving value, solves their problems and helps them do some job, and culminates in happiness and loyalty.
When all of that aligns, the business benefits via both strong employer and talent branding, shorter and less costly recruiting cycles, increased customer lifetime value, revenue growth, profitability, and a host of competitive advantages that perpetuate all of these outcomes.
Let’s talk about some real-world examples of brands that put employees first and are reaping the outcomes and advantages noted above.
Delta Airlines is well known for delivering great employee and customer experiences, thanks to its CEO, Ed Bastian. In February 2020, the company announced a payout of more than $1 billion in profit sharing to employees to celebrate its accomplishments that were “made possible by its employees around the world.” Focusing on the employee experience is good for employees, for customers, and for the business.
Bob Chapman, CEO of Barry-Wehmiller, a phenomenal leader who knows the importance of caring for his employees, believes that when you create a workplace culture that truly values and cares for employees, the rest takes care of itself. The company just acquired its 101st business, and since 1987 has experienced 18% compound revenue growth and 14% compound share price growth.
If you need another example of the impact of leadership and culture on the employee experience, look no further than WD-40 and its CEO, Garry Ridge. His employee satisfaction score sits at 92%. He credits the success of the business to living the core values and building a culture of learning, which impacts the employee experience in so many ways.
And one final example is W.L. Gore, which has been named a Great Place to Work for 21 years in a row, earning a spot on Fortune’s 100 Best Companies to Work For list every year since 1998. Their CEO, Jason Fields, said: “We strive to … unleash the natural curiosity and talent of our Associates to create products that improve lives.” 89% of employees say that it’s a great place to work. The bottom line: 3% turnover.
Tom Peters, author of The Pursuit of Wow!, wrote: “If you genuinely want to put customers first, you must put employees more first.”
It’s as simple as that: put employees first.
But in order to do so, the CEO must build and lead in a culture that was designed to put people first–before metrics, products, or profits. Remember that your corporate culture is a combination of what you create and what you allow. Executives must live it and reinforce it.
There’s a lot of work to be done to design and deliver a great employee experience. That starts first with knowing what it is and what it entails. Now that you do, it’s time to get started.
Build a business case. Get leaders on board. Start listening to your employees. And work with them to co-create an experience that makes them proud to work for the company every day. In doing so, you’ll also improve the customer experience which adds value to the bottom line.
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