Five reasons why there’s so much interest in employee experience

The Global Talent Trends report by LinkedIn is one of many studies to show that HR and business leaders are making a priority of employee experience (EX).

Elsewhere, I have defined what I mean by EX and argued that it’s more than a fad. Looking beyond the buzz, there are key reasons why EX has become a serious focus for leaders:

  1. It is widely accepted that employee experience matters for business performance. Even if you haven’t analysed your own people and business data, most leaders can see that employee experience is important in delivering great customer experiences, especially in a digital world. At an operational level, if the tools and systems that you use internally are clunky and time-consuming, there will be a knock-on effect for customers in terms of agility and service. Businesses increasingly compete on the basis of the experiences they deliver to customers. This means that collaboration, simplification and end-to-end thinking become even more critical capabilities.
  2. Leaders are aware of the risks of not understanding employee experience. You can argue that Boeing is the latest in a long line of companies to get into trouble by not understanding the experience of key workers. Boeing’s leaders were apparently blind to the fact that staff were so critical of arrangements for the 737 Max. Another recent example is the fashion retailer Ted Baker. The company suffered serious damage to its reputation when incidents of “forced hugging” were exposed publicly in the rise of the #MeToo movement. Listening to employees needs to be a leadership focus even (or perhaps especially) during moments of crisis, such as the financial crash and the current pandemic. These are times when your values are tested. For Tracy Maylett and Matthew Wride, these are key “moments of truth” for EX and trust.
  3. Partly in response, EX is getting board-level and external attention. In the UK, for example, the Corporate Governance Code has brought in a higher level of employee involvement and a focus on internal culture. Many companies have doubled-down on employee listening as a result; making sure they can demonstrate that employee input is given greater prominence. Related to this is a broader focus on corporate sustainability that emphasises the perspectives of all stakeholders, including employees. Investors also have an appetite for better workforce reporting and greater transparency. This interest is only going to grow, given that intangibles such as human capital increasingly drive value in a knowledge- or experience-based economy. One-in-three large companies already use people metrics in executive pay design; the most common metrics are EX-related (culture and engagement).
  4. Another important reason for focusing on EX is because inclusion and diversity is under the spotlight. In the UK, for example, where progress on I&D has been slow, large companies have to report gender pay gaps (and perhaps in the future BAME pay gaps as well). These pay gaps arise because of long-term and persistent trends. Traditional approaches only provide crude insights into these trends. An EX lens can be far more useful in terms of understanding problems and finding solutions. This often involves more continuous listening, focused on key cohorts and networks, especially at critical moments.
  5. One underlying or structural reason for making a priority of EX is the widespread impact of digital transformation on work, jobs and organisations. The speed of digital transformation has accelerated during the coronavirus crisis, by necessity, but it is a longer-term and ongoing force for change. To operate a successful digital business requires a focus on culture and behaviour as well as systems. Effective digital processes depend on collaboration and end-to-end thinking. In turn, this requires a change in leadership mindset, away from hierarchy and control towards involvement and transparency. This is a big shift for many organisations and for many leaders. By focusing on EX, you can build trust and help establish sustainable change.

You can add other reasons to this list. They may include things like generational changes in the workforce and changing expectations regarding personalisation and feedback.

What strikes me is that, in my 20 years’ of working in employee insights, I haven’t seen as much interest as there is now in measuring and activating employee experience.

Because of this, however, it’s especially important to be mindful about your overall approach and how it should evolve. This will include, for example, your overall listening strategy, the data you have available for integrated analytics, your level of EX maturity, the degree of trust that exists in your organisation, and your change leadership capability.

Given that EX has become such a priority, you need to think strategically and systemically about it. In particular, you need to prioritise the areas where employee experience can answer the most critical questions and provide the greatest business value.

Let me know your thoughts on this and any other reasons that you would add to the list.

Feel free to also contact me here or on Twitter @nickl4.

You can read more about EX Leadership here as well.

Tags: #EmployeeExperience #EmployeeEngagement #PeopleAnalytics

This article was first published on LinkedIn on May 12, 2020.