What is employee experience?
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Published: 16 November 2023
Contributors: Keith O'Brien, Amanda Downie

What is employee experience?

Employee experience is a holistic talent management approach that organizations take to help ensure that their employees have the support they need to succeed and thrive at work.

Employee experience covers everything from how employees are trained and cared for to their physical workspaces and the technology and services they use to accomplish their responsibilities at work.

It has become an increasingly important component during every stage of the employee lifecycle, from the time of recruitment to when an employee leaves the organization.

This was especially seen during the COVID-19 pandemic, when employees moved to remote work. The pandemic created more stress and loneliness for employees, and more people left the workforce or quietly quit.1 This had a profound impact on employee engagement.

Gallup reported that 32% of active employees are engaged at work, a figure that has continued to decrease since the pandemic.2 As outlined in that survey, nearly 75% of employees at best-in-class organizations are currently labeled as engaged. Based on this, business leaders are recognizing that organizations prioritizing employee experience yield a higher return on investment from their employees.

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Employee experience versus employee engagement

As with many similar topics, some organizations use employee experience and employee engagement interchangeably. But there is a slight difference.

Employee experience covers the holistic relationship employers and employees have across the entire employee lifecycle. Employee engagement is more narrowly focused on connecting with employees, helping to ensure that they are happy at work and committed to their jobs. As such, employee engagement is often considered a component of employee experience.

Historically, organizations have addressed employee experience by focusing on perks like, salary raises and bonuses, free food and coffee, and outings to show their appreciation to their employees. But more employees now struggle with work-life balance and concerns about having the right skillsets to remain competitive in a technology-driven world.

While organizations have downplayed perks recently as they look to cut costs, they have also needed to look at different ways to produce strong employee engagement that better aligns to rising employee needs.3 Modern organizations are increasingly focusing on providing positive experiences to employees, such as giving them mental health days, unlimited paid time off, wellness programs and childcare services.

Organizations with a strong company culture and a deep interest in worker well-being are likely to focus on creating a positive employee experience in the workplace. By creating a great employee experience, organizations and their human resources (HR) department should expect improved employee engagement.

Why employee experience matters

There is a direct link between heightened employee experience and business performance. McKinsey research found workers that reported a positive employee experience had 16x the engagement level and nearly 8x the likelihood of staying at the organization than those with a negative experience.4

C-suite directives

HR teams and HR leaders have long prioritized employee experience strategy, but they have the backing of their executives more than ever. Smart business leaders understand that employees are the foundation of their company and often the source of their competitive advantage.

The advent of authentic leadership means that organizations are more focused than ever on serving their employees, instead of asking their employees to serve the organization. Inverting this traditional approach makes the employees feel more a part of the organization’s strategy and success. And those executives know that employees can have a significant impact on business outcomes.

Costly turnover

Employees are increasingly open to leaving organizations that do not provide what they need. Catering to employee needs, a core component of a positive employee experience, is a great way to help ensure that employees are happy and remain at the organization.

Organizations cannot afford to lose employees, especially top talent, because they did not listen to them or provide the right tools. While estimates vary, Gallup has put the cost of replacing an employee from 50% to 200% of the employee's annual salary.5

Employee feedback

At work, employees experience burnout, microaggressions and other stressors, as well as uncertainty about their standing or growth opportunities. Only half of employees surveyed by Gallup feel they know what’s expected from them at work.

Today, employees are more vocal about what they expect and need from their employers. Leading organizations have taken that feedback seriously and put more focus into solving some of those issues.

Key components of an employee experience framework

An employee experience strategy should account for every step of the employee journey, from the time they join the organization until the moment they leave it. Here are some of the most important employee experience initiatives as they are likely to occur during an employee’s journey:

Recruitment and networking

Leading organizations tout their employee experience initiatives, especially when meeting with potential candidates.

By demonstrating warmth and inquiring about a candidate’s passions and interests, an organization’s HR personnel signal to the prospective employee, and the employee’s social network, that they take the employee experience seriously.

Onboarding

A key area for employee experience is how you bring new hires into your organization. Starting a positive employee experience during the hiring process allows new employees to feel immediately welcomed and confident they know how to excel.

Development opportunities

Organizations are responsible for ensuring their employees have the right skills to fulfill their job responsibilities. A key component of this is professional development.

Provide training, upskilling, coaching, self-directed learning and other talent development initiatives that help employees grow their skillsets.

Employee engagement surveys

It is important to know how employees feel about their work and the organization. These surveys, also called employee experience surveys, can take place over extended periods of time to track how employee experience has changed.

Tracking things like employee satisfaction over time is important, as there could be larger issues that go underreported without data. Pulse surveys, a quick templatized survey of a few questions that remain the same, can help track engagement, sentiment and perspectives over time.

Performance reviews

This is where organizations help employees by telling them areas in which they are excelling and those in which they might improve.

Performance management is as much for the employees as it is for the organization. Employees crave understanding where they are currently excelling and knowing how they can improve.

Ad hoc check-ins and feedback

Top organizations don’t wait until official review periods or quarterly surveys to focus on employee experience. Every touchpoint with an employee offers a real-time opportunity to build upon the employee experience.

Also, managers should try to be aware of any issues from outside the workplace that might impact performance and address them with employees to see how the organization can help.

Exit interviews

Even departing employees can help an organization strengthen its employee experience. An honest debrief with an outgoing employee can help identify problem areas that negatively impacted their experience at the organization.

Benefits of employee experience

Focusing on stellar employee experience can help organizations tackle some of their most important goals.

Employee retention

Happy employees are more likely to stay with the organization that already employs them. Minimizing employee turnover is a key priority for any organization looking to avoid unnecessary costs.

Improved creativity

Employees who are confident, fulfilled in their work and feel supported by their leaders are more likely to bring new and creative ideas to the business.

Improved customer experience

Many employees are on the frontlines of customer engagement. Engaged employees are more likely to improve customer satisfaction because they feel better about the organization and the executives for whom they work. 

Increased quality of work

Employees at organizations committed to a positive employee experience are likely to work harder for their organizations. In turn, improved employee productivity often leads to better business outcomes including increased profitability.

Challenges of employee experience

Creating a comprehensive employee experience strategy does have some challenges that organizations must address to achieve success. 

Data reliability

Asking employees to self-report their perspectives to their bosses, even if anonymously, can sometimes color the data. Employees might be wary that the organization will be able to track their responses to them, leading them to be less honest.

Identifying metrics

It can be challenging to identify whether an organization is providing a good employee experience, especially when it’s difficult to know whether an employee is truly happy at their job. It is important to ask employees the right questions and track key metrics.

Privacy concerns

Employers need to balance asking their employees how they’re doing with respecting their privacy. An employee affected by something outside of work can be a challenge for any manager.

It is important to balance respectful privacy with getting enough information so the employer can best offer support.

Program maintenance

Employee experience is not a one-time initiative. It requires constant investment, reappraisal and updates. Organizations should continually monitor their employee experience initiatives.

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