Back in 1998 Joseph Pine and James Gilmore described the rise of the experience economy. They highlighted how successful companies stage engaging experiences through mass customisation. One of the key points they made was that while services provide a value, experiences are memorable. With the shift to digital, companies have put a focus on designing customer experiences and using customer insights effectively.
Many organisations are realising that they also need to focus on employee experience. In part, this is being forced on them. As traditional elements of the employment deal have fallen away, organisations are looking for other ways to differentiate themselves, so they can attract and engage the best people. What’s left are the more experiential elements, such as values, culture, the physical environment and the work itself. At the same time, research has shown that these factors, along with purpose, are vital for motivating people to perform at their best. It’s also the case that the digital natives companies want to retain have very different expectations as consumers than previous cohorts. As a result, many organisations are having to play catch up.
All this is leading to a growing interest in measuring and managing employee experience. This takes a number of different threads:
- First, there is an emphasis on integrated people analytics. The aim is to link together all the touch points that impact employees and to identify the key moments that matter. In customer terms this is akin to understanding customer journeys (indeed, employee journeys can be one output). Or in technology terms, this is like shaping user experience. There is also a focus on micro-segmentation. This means getting far more specific in how you identify employee groups. This might include critical roles and talent, or life-stage and values-based clusters. By digging into micro-segments, and playing back the findings through tools like employee personas, you can help design meaningful strategies for communication and engagement.
- Second, there are capabilities that require attention. For example, it becomes important to have an overall listening strategy, which deploys a range of tools and approaches. And these insights need to be collected in a way that means they can all be connected to tell a holistic story. Manager capability is another crucial area. It goes without saying that managers have an impact on a lot of the touch points that impact employees. The requirement for managers to deliver the value proposition well makes their selection and learning especially important. In addition, it’s vital to personalise communications through social technology and portals. And the physical work space must allow collaboration and conversation.
- Third, some organisations are establishing an oversight role, a Director of Employee Experience. This role can encompass insights, employer branding, people analytics and aspects of learning, capability and rewards. And sometimes they are filled by people with a background in customer experience rather than HR. This reflects the fact that employee experience is a business (and customer) priority. Another success factor is the ability to apply design thinking in this role. This means developing models to make sense of connections, valuing emotional as well as practical concerns, and finding solutions through experiments and pilots.
What’s the impact of all these elements? Our research indicates there is a performance premium for companies that get it right. They have higher levels of employee engagement. They find it easier to attract key talent. They face fewer regrettable losses. And they report stronger business performance. This is especially the case when a focus on employee experience is part of a broader modernisation agenda.
- Joseph Pine and James Gilmore, “Welcome to the Experience Economy,” Harvard Business Review (July, 1998)
- Jon Kolko, “Design Thinking Comes of Age,” Harvard Business review (September 2015)
- Willis Towers Watson, “Under pressure to remain relevant, employers look to modernize the employee value proposition” (2016)
Tags: #EmployeeExperience #EmployeeSurveys #PeopleAnalytics
This article was first published on LinkedIn on September 26, 2016.