Experience is impossible to objectively quantify. How might we put a value on a moment that brought a smile, made a heart skip a beat, or made someone ugly laugh? But businesses everywhere are beginning to operate with the understanding that quantity does not imply quality. Organizations around the world are now focused on establishing sustainable and effective employee experiences to keep their human resource pool motivated, high-performing, and contented.
Research has consistently shown that positive employee experiences influence performance, collaboration, and overall organizational environment. But, setting aside these statistics and results, is there a business impact of effective employee experiences?
Let’s find out.
The Business Impacts of a Positive Employee Experience
Little is known about the impact of a positive employee experience on the business itself. Let’s explore the connection between employee experience and financial results.
1. Positive Employee Experience = High Employee Engagement = High Performance
Employee motivation has long been studied. Yet as technology, priorities, lifestyles, and career trajectories have evolved, putting a metric on employee satisfaction has grown more complex, as have the strategies needed to truly motivate employees and guide them towards their full potential.
Before, employer-employee relationships were purely transactional: a paycheck provided in exchange for a service. But nowadays, employees lean toward a purpose, a greater meaning, and the nurturing of relationships with colleagues and supervisors that allow them to grow.
One way to encourage a positive employee experience is to not only allow your employees to have a voice, but to listen to what they say. Your employees, like all human beings, feel more valued when they feel heard. In this way, you also increase employee engagement.
In addition, invite your employees to provide solutions or recommendations about certain processes, policies, or even the organizational culture. When their suggestions are actively considered, or even implemented, they’ll take pride in knowing that their solutions paved the way for growth and improvement.
When companies integrate and empower positive employee experiences, employees are more likely to engage with the organization, creating a high-performing environment.
2. Organizations that Invest in Employee Experience See 4x the Average Profit
Yes, you read that right. Organizations that emphasize the implementation of effective employee experiences achieve at least four times the average profit of organizations within their market. This study highlighted three areas of work that matter most to an employee’s experience: organizational culture, technological adaptations, and physical environment. Notably, only 6% of the 250 organizations are heavily investing in the three work areas, and their profits and revenues are benefiting.
3. Employee Experience can Be a Predictor of Financial Results
Willis Towers Watson has been relentlessly studying the employee experience for the past 50 years. While comparing the results between average financial performers and high financial performers, they discovered three aspects of the employee experience that are present in the high financial performing group: emphasis, essentials, and excellence. Emphasis entails giving employees a voice and letting them take ownership. Essentials include fair pay and supportive managers. And excellence lies in an organization’s ability to trust and instill drive in their employees.
As the results show, organizations who prioritize employee experience see about 4% growth in revenue, a 3% growth in 1-year gross profit margin, and a 4% increase in the 3-year gross profit margin.
The 50-year study paints a clear image: organizations that heavily invest in employee experience are more likely to see clear financial growth.
Does Employee Experience Affect Customer Experience?
Now that a measurable and more definite impact has been shown, it’s time to look into the link between employee experience and customer experience.
Before, organizations would only invest in what their customers would feel, see, touch, and hear pertaining to the brand, product, or service they obtained. But now, companies are starting to do the same for their human resources.
Is there a benefit to this, outside of the human impact that comes with supporting one’s employees? How can employee experience affect customer experience? As studies show, there is a direct impact between a positive employee experience and a positive customer experience. In fact:
- Companies who rank high in customer experience surveys show 1.5x greater employee engagement.
- Organizations that excel in customer service outperform their competitors by 147%.
- 87% of customers’ attraction to Starbucks is driven by the organization’s mantra, “People first and the customer experience will follow,” implying that customers appreciate feeling that Starbucks employees are taken care of by the company.
- Marriot International embodies J.W. Marriott’s words, “Take care of associates, and they’ll take care of the business,” and their customer service experience is regarded as one of the best in the world.
The Bottom Line: It’s a Win-Win
Heavily investing in employee experience strategies may sound irrelevant or even costly at first glance. However, like any other investment, it’ll grow in due time. Yes, there are risks. But, when managed effectively, the returns are well worth it.
Implementing effective employee experience strategies allows your organization to experience minimal turnovers, which in turn saves your company from experiencing the costly effects of turnover: resignation, selection, hiring, onboarding, and training.
When there is minimal turnover, loyalty grows. Employees who have positive experiences within an organization are more likely to recommend top talent for a greater and more effective human resource pool.
In short, positive employee experience breeds financial growth. Since employees are happier, more motivated, and more content, they are more engaged and perform better.
Keep in mind that employee experience and customer experience exist in an infinite loop. When an employee is happy, the customer is happier. Their relationship is directly proportional in the sense that whatever happens to an employee reflects in the customer’s experience as well.
Following the wisdom of J.W. Marriott, companies need to prioritize their employees. Investing in employee experience will guarantee not only a high-performing organizational culture, but a business that can outperform competitors.
