While unemployment hovers around historic nationally, the job market in many industries, including healthcare and manufacturing, is even tighter. Meanwhile, a perfect storm of other factors, including residual effects from the Great Recession, is making it increasingly harder for companies to find and keep skilled labor.
Given what employers are up against, companies need to put their best foot forward with compensation and benefits. Yet, a growing body of research suggests that this is only part of the puzzle.
Enter the newest frontier for recruiting, retaining and optimizing top talent: improving employee experience. Put simply, employee experience refers to how employees think about the work itself, both in terms of their day-to-day work life and their overall fulfillment.
Although the concept is harder to peg, it’s gaining traction. The 2019 Deloitte Human Capital Trends report identified employee experience as one of the biggest areas of focus for companies around the world, ranging in size and industry. In the annual survey, 84 percent of respondents rated improving employee experience as urgent, while a full 28 percent said it is one of the three most urgent issues facing their organizations in the coming year.
“While there is much that can be done to improve work/life balance, research shows that the most important factor of all is the work itself: making work meaningful and giving people a sense of belonging, trust, and relationship. We believe organizations should move beyond thinking about experience at work in terms of perks, rewards, or support, and focus on job fit, job design, and meaning—for all workers across the enterprise,” the researchers concluded.
Understanding Employee Experience
There is no hard-and-fast definition of employee experience, but it generally falls into two broad categories: how employees view their day-to-day work lives and how they think about the big picture of what they do.
The challenges and frustrations of daily work life can vary greatly by industry, role and individual. That said, more employers are recognizing the value of removing common barriers and frustrations. Many of the best practices in employee experience are inspired by customer experience.
For professional roles, for example, better employee experience may encompass automating tedious tasks, cutting down on time-consuming meetings, giving employees more autonomy to make decisions, or improving overall office design. For skilled workers in physically-demanding jobs, better employee experience might focus on making their work environments safer and more comfortable.
While the design of their daily work lives has a critical impact on employees, the big picture also plays a role in their overall satisfaction. Again, this varies by industry and function, but typically relates to whether employees feel that they are making a meaningful contribution, that their work is valued and that their employer provides them with opportunities for growth.
In the Deloitte survey, just 53 percent of respondents felt their organizations were effective or very effective at creating meaningful work, while only 43 percent thought they were effective or very effective at providing the right opportunities for growth.
Taking Cues from Customer Experience
The growing awareness of employee experience stems from changes in customer experience. Many aspects of our consumer lives have improved over the last couple of decades. Technology has played no small role. Consumers can check the weather, navigate to an address and track down goods and services simply by saying “hey” to a virtual assistant in their homes. Meanwhile, social media has given consumers a bigger voice when it comes to communicating their opinions and frustrations.
The workplace has, in most cases, been behind the times when it comes to offering the same ease of use. That is now changing.
In fact, companies of all sizes are starting to borrow best practices from customer experience to remodel their employee experience. That said, there are key differences. While customer experience tends to focus on the individual, employee experience is social.
"It's built around culture and relationships with others, moving well beyond a focus on an individual employee’s needs," the Deloitte researchers noted. Another key difference: "Employees want more than an easy set of transactions; they want a career, purpose, and meaning from their work.”
While there is no single playbook for improving employee experience, the process at most organizations should begin with recognizing its importance and looking at the work experience from many different angles. In most cases, improving employee experience doesn’t require revamping operations or making drastic changes to corporate culture. In many cases, small changes can have a big impact—from pairing down meetings and rethinking rigid policies, to changing lighting.
Seeing the Benefits of Employee Experience
Defining and fine-tuning experience is nuanced, but the benefits are straightforward. In nurturing better employee experiences, companies may not only gain an edge in a tight labor market, they could see a direct improvement to the bottom line.
Research from the Massachusetts Institute of Technology has found that enterprises ranking in the top quartile for employee experience are two times more innovative than those in the bottom quartile—and they have double the customer satisfaction and 25 percent higher profits.
Most companies understand the importance of looking at capital investments and financial decisions through the lense of return on investment. That thinking continues to evolve as companies gain a greater understanding of the ROI for improving the employee experience. At the end of the day it's a pretty simple equation: happier employees tend to be better employees.