This article originally appeared in Issue 3 of Catalyst Magazine.
To attract and retain talent, organisations must scrutinise their employee value proposition, writes Karen Higginbottom.
Tolstoy observed that “each unhappy family is unhappy in its own way”. The same might be said of businesses. It won’t be news to many that a large number of organisations around the world are facing a crisis in employee engagement.
According to Gallup, 85% of the world’s employees are not engaged. The gaping hole in contentment has been attributed to a variety of factors ranging from poor relationships with line managers; employees not feeling valued; a deficit of corporate moral fibre; a withering work-life balance; lack of parity over pay; poor opportunities to develop; a lack of inclusivity, or simply that many workers no longer understand what they are meant to be doing each day.
But in a service-based economy, having sullen workers who stolidly go through the motions is no longer an option. Routine jobs will soon be automated. In the roles that remain or are created, empathy and creativity are set to become highly prized characteristics. Employees need to feel (to some extent at least) that they actually want to be at work. And the more content they are, the better the outcomes for the business.
Herein lies the problem. Improving something as broad and intangible as ‘engagement’ is difficult. On the other hand, breaking down engagement into a series of tangible ‘employee experiences’ (or EX) is, for more and more companies, the new direction of travel.
Accenture defines EX as the elements that make up an employee’s experience at work, which includes their physical, human and digital experiences. In a recent study from The Future Workplace and Beyond.com, 83% of HR leaders said that ‘employee experience’ is either important or very important to their organisation’s success, and they are investing more in giving more rewards (47%), improving their workspaces (51%), and training (56%).
Heather Andrews, director of employee experience at Legal & General Group, introduced an EX strategy in 2018 that is closely aligned to the organisation’s existing customer experience strategy. “The critical thing about employee experience is identifying key moments,” she says. “We’re focusing on making sure we’re delivering a high-quality onboarding experience. We’ve launched surveys for new joiners and leavers which give insight into the employee life cycle. We will look to segment the employee base.”
While this segmenting of current employees (as if they were customers) is a relatively new departure for organisations, Lindsay Willott, chief executive of Customer Thermometer, deepens the definition further still.
“In my view, EX encompasses everything an employee experiences,” she says. “This can even include the pre-employment phase where the company’s reputation encourages or discourages people to apply for a job. At that point, their early experience of being integrated into the company and feeling valued is critical.”
Under this definition, EX encompasses many things that have become recent HR buzzwords: diversity and inclusion; soft skills; performance management and brand purpose. It describes an entire mindset shift for employers. That’s not to say that the emerging shift cannot be quantified. Accenture focuses on measuring employee engagement in relation to EX, as this has a direct impact on productivity and profitability. In other words, employee engagement represents the end goal and improving EX the means to that end.
Organisations can also track the impact of their EX approach by studying employee turnover or whether they receive improved job offers, adds Richard Morgan, strategic benefits consultant for Aon – although ultimately, he says, “it’s about external customer satisfaction and profitability”.
EX-odus: Where it all began
EX originated with US start-up companies such as Airbnb and consulting businesses including Accenture and Deloitte, according to Audencia Business School’s Professor Christine Naschberger.
“The early adopters were probably companies that got rid of the annual performance review,” she says. “They implemented an instant-feedback culture, where feedback is given when needed. In the organisational world, I would say that EX has existed for the past five years and employee engagement the past 15 years.”
Another factor driving organisations to embrace an EX approach is the ongoing skills shortages, says Alan Price, group operations director and HR expert at consultancy firm Peninsula.
“Skilled employees have more choice than ever before when it comes to choosing where to work,” he says. “And organisations are looking at new ways to ensure they can get to the top of the list. Pay will naturally be a determining factor for many organisations. However, a growing number are beginning to place more emphasis on finding a rewarding and employee-focused environment.”
Some companies include EX as part of their talent-management strategy to attract, develop and retain employees. The pioneers of the employee experience approach are companies that have focused on creating great customer experiences. Household names such as Nike, Airbnb and Adobe have either created chief employee experience officer roles or merged employee and customer experience teams wholesale.
As Professor Naschberger says: “For them, it seems to be natural not only to provide experiences to external customers but also internal customers. Mostly, these are tech companies. They have thought of how new technologies and digitisation will impact employee experience in a positive way, which is also in line with the younger generations.”
And in line with its precursor, customer experience, EX is all about the bottom line. Companies with a great EX outperform the Standard & Poor’s 500 by 122%, according to a report by Accenture. The same report notes that companies with a highly engaged workforce are 21% more profitable than those with less satisfied employees.
EX strategy is also about retaining the new generation of employees entering the workforce: graduates are three times more likely to stay with their first employer for five or more years if they feel their skills are fully utilised through challenging, meaningful work. Learning and development (L&D) plans as part of a well-designed EX strategy are especially important for generation Z workers and can be the difference between retaining and losing digital talent, according to a Gen Z Rising report by Accenture Strategy. A 2019 study by CW Jobs and Good and Co found that 56% of gen Z workers believe a new challenge is more important than their monthly pay cheque.
At financial services company Synchrony, helping staff to understand how they can develop and grow within the business is core to its employee experience strategy. As well as supporting their people to have “critical experiences” (opportunities outside of their day jobs allowing them to gain new skills), Synchrony holds a career week twice a year. “This gives employees an opportunity to step back and take an audit of where they are in their career and what it is they want to do next,” says vice president of employee experience Ashley Petersen.
“It provides them with resources and stories from around the organisation that help them figure out how they can achieve their career ambitions. We are also developing a Career Experience Centre – an internal website giving employees the resources and tools they need to own their development. We truly focus on everyone owning their career journey,” she stresses.
It would be a mistake to assume that L&D opportunities are only important to younger workers. A 2019 study by Ricoh Europe found that almost three-quarters of employees of all ages expect to upskill throughout their career and believe the best workplaces invest in digital technologies to upskill staff. It’s not just the young dogs who are keen to learn new digital tricks.
However, there are clear generational differences that need to be considered for EX strategy. Naschberger explains: “Millennials and gen Z are particularly sensitive to experiences. They grew up in an entertainment society and are used to interacting on social networks, so can challenge corporations more easily. They expect personalised responses. These expectations might be a shock for previous generations. Organisations must promote intergenerational dialogue and foster mutual understanding to avoid conflicts.”
EX-ceptions to the rule?
One potential drawback of the EX approach, warns Naschberger, is that treating employees like customers can make “employees more selfcentred, only considering things from their own viewpoint instead of contributing to the achievement of organisational goals.”
If HR becomes ‘consumerised’ in this way, then employees will be more likely to ask what their company can do for them, rather than what they can do for their company.
Simon Gibson, head of L&D, EMEA for RS Components, warns that “there is a fine balance between providing what the employee needs or wants and what the employer needs and wants along with the pressures of owners and investors driving a commercial agenda.”
And Helen Jamieson, founder of HR consultancy firm Jaluch, agrees: “People generally have a vested self-interest, meaning that, if allowed, they will always pursue what works for them,” she says. “But successful teams simply cannot operate like this; they rely on the continual co-operation and compromise of their members.”
More seriously, warns Naschberger, a poorly executed EX strategy can backfire. “One of the biggest drawbacks is if there is a gap between the communications of an organisation and the perceived reality,” she says. “Recently recruited employees may feel this is not the ‘product’ that they bought into. Employees may leave or ‘boycott’ the organisation if the so-called psychological contract is violated.”
For example, in 2018, thousands of workers at Google walked out in protest about its treatment of women, demanding key changes in how sexual misconduct allegations were dealt with at the firm; some carried ‘Don’t Be Evil’ placards in an ironic call-back to Google’s strapline.
Ironically, the more organisations try to personalise the experience for everyone, the harder it is to get it right for anyone. For example, colourful break-out spaces might please the extroverts but can leave the introverts feeling drained and depleted.
According to recent IPSOS research, employees who work in an open-plan office lose 86 minutes a day to distractions and 95% of employees would rather work in enclosed private spaces. The trend for open-plan offices may be leaving many workers feeling overwhelmed, anxious and lacking in focus.
On this basis, at San Francisco tech company Basecamp, ‘library rules’ govern public conversations, restricting them to a whisper so as not to disturb colleagues. Basecamp also considers employee incentives (free meals, creches on site) as counterproductive ploys, keeping staff tied to their desks. In a book about its company culture, It Doesn’t Have To Be Crazy At Work, Basecamp’s founders, Jason Fried and David Heinemeier Hansson, argue the case for empowering staff to work whenever and wherever they like; limiting employees to a 40-hour week (a four-day week in the summer); and offering subsidised holidays, sabbaticals and monthly massages at spas. The logic is simple: tired and distracted workers are not productive or profitable.
The fact that EX is a broad term makes decisions around culture, technology and physical environment harder to get right in a consistent and holistic way. If a company wants to implement an EX approach, says Naschberger, decision makers must remember that HR professionals are not the only ones who need to get involved, even if they are leading the charge.
In addition, you cannot simply “create” employer value proposition (EVP) from scratch; it’s something that already exists within any organisation’s corporate culture and employee stories. In line with this, a key recommendation of Alexander Mann Solutions’ whitepaper Decoding your value proposition to deliver a meaningful employer brand is to review what workers think of your organisation before you begin to work on internal messaging.
For EX to be authentic as a strategy, it must “knit very closely” with an organisation’s culture and values, agrees Peter Padua, vice president of global talent acquisition at CPA Global, an intellectual property management and technology company.
Having gone through a year-long period of transformation, CPA Global will be launching its EVP over the next 18 months to uncover what’s happened from a values-culture perspective.
“It’s not just about designing something, launching it and that’s the end of it, it’s about constant evolution as a company,” he says. “It’s taking a temperature check as to how the company’s developing, from its employee perspective.”
Naschberger concludes: “Other internal stakeholders, such as top management, line managers and employees, must be aware of their role and what is expected of them. Employee experience is a global approach that needs a global vision and philosophy.”