Let’s get to the bottom of the connection between Customer Experience (CX) and Employee Experience (EX)…literally. Savvy organizations are realizing the immense value of prioritizing employee experience (EX). But how do we measure the impact of EX, and more importantly, how can we leverage it to drive real business results that hit the bottom line?

Defining Success in Employee Experience

Before we can measure EX, let’s define what success looks like. I loved a good game room as much as any kid growing up, but spare me the ping and pool tables that often sit empty. And now that I love coffee more than beer, an Expresso machine sure sounds nice, but these aren’t the true drivers of employee experience. True EX success encompasses the entire employee journey, starting with recruitment. Success creates an environment where employees feel valued, supported, and empowered to do their best work.

So, success in EX looks like this:

• Higher employee retention rates
• Increased productivity and efficiency
• Improved customer satisfaction
• Better overall business performance
• Employees who are more likely to refer candidates AND customers

 The True Return on Investment

A recent Harvard Business Review article, “Research: How Employee Experience Impacts Your Bottom Line” (March 2022)*, provides and interesting look into the link between EX and financial performance. The study found that stores with more tenured, experienced, and skilled employees generated significantly more sales per hour.

In fact, the study showed that if an average store could move from the bottom quartile to the top quartile in key EX dimensions, it would see a more than 50% increase in revenue per person-hour worked. Even more impressive, this revenue boost didn’t come at the expense of profitability. The same improvement in EX correlated with a 45% increase in profits per person-hour.

These findings send a clear message: retaining experienced employees and investing in their development pays off.  #TranslationTime: It’s time for companies to rethink cost-cutting measures that target long-serving employees. This hurts in two ways: the loss of the institutional knowledge that goes with them and the burden now being placed on fewer, less experienced team members.

Creating a Holistic Employee Experience

To truly maximize the benefits of EX, it pays to take a comprehensive approach:

1. Employee Journey Mapping: Just as we map the customer journey, we should map the employee journey to identify pain points and opportunities for improvement.
2. Regular Feedback: Implement ongoing feedback mechanisms, not just annual surveys. Be sure to act on this feedback and communicate changes to show employees their voices are heard. And PLEASE do not use these listening tools as fuel for reactions that can be viewed as “punishment”.
3. Recognition and Celebration: Acknowledge both small wins and major accomplishments. Recognition is vital for employee engagement and motivation.
4. Work-Life Balance: Consider flexible work arrangements and initiatives that support employees’ lives outside of work. Then be MORE FLEXIBLE! Keep going…you can do it…
5. Career Development: Provide clear paths for growth and opportunities for skill development, including professional-level training.

Measuring the Impact of Employee Experience

OK, how do we establish metrics to track our progress? To measure Employee Experience (EX), organizations typically use a combination of metrics and methods. Here are some key ways to measure EX:

1. Employee Net Promoter Score (eNPS): This metric measures how likely employees are to recommend their company as a place to work.
2. Turnover Rate: A high turnover rate can indicate poor employee experience.
3. Employee Engagement Scores: These measure how engaged and motivated employees are in their work.
4. Surveys: Regular employee surveys, including pulse surveys, can provide direct feedback on various aspects of the employee experience.
5. Employee Feedback: Collecting and analyzing open-ended employee feedback can offer valuable insights.
6. Learning and Development Metrics: Measuring participation in training programs and skill development can indicate investment in employee growth.
7. Physical Environment Metrics: Assess the quality and suitability of the workplace.
8. Technological Environment Metrics: Evaluate and improve the tools and technology available to employees.

It’s important to note that a comprehensive EX measurement approach often involves using multiple metrics to capture different aspects of the employee experience. Each of these has limitations and should be applied and viewed thoughtfully and with clarity of purpose. And always remember that measuring EX is just the first step. The key is to use these insights to drive action and create meaningful improvements to the employee experience.

Aligning EX with CX

I’ve worked in large corporations with the old command and control mentality, and the old saying goes, “What gets measured gets managed.” By aligning EX metrics with CX metrics, we can create a virtuous cycle where improvements in one area drive improvements in the other. When EX goes up, CX should follow, and vice versa.

• Proactive Retention Strategies: Instead of relying on exit interviews to understand why employees leave, implement “retention interviews” starting from an employee’s first day. Regularly check in to understand what keeps them engaged and what might cause them to look elsewhere.
• Speaking the Language of Leadership: To gain buy-in for EX initiatives, it’s crucial CX pro’s speak the language of leadership. Present data-driven arguments that demonstrate the clear link between EX and revenue. Show how investments in EX can lead to tangible business outcomes.
• Collaborative Goal-Setting: Involve employees in defining what success looks like for your organization. By collaborating with the people you’re trying to serve, you’ll create more meaningful and achievable goals.

Summary of Action Steps for Improving Employee Experience

1. Define Success: Clearly articulate what a great employee experience looks like for your organization.
2. Establish Metrics: Implement systems to measure EX and its impact on business performance.
3. Start Early: Start focusing on EX from when a candidate is recruited, not just after being hired.
4. Gather Feedback: Regularly solicit employee input and act on it.
5. Align with CX: Ensure your EX initiatives support and enhance your customer experience goals.
6. Celebrate Wins: Recognize and reward employees for their contributions to business success.
7. Continuous Improvement: Regularly review and refine your EX strategies based on data and feedback.

By prioritizing employee experience and measuring its impact, you can create a more engaged workforce, deliver better customer experiences, and ultimately drive significant improvements to their bottom line. Companies that invest in EX aren’t just doing right by their employees, they are setting themselves up for long-term business success. That’s the bottom line.

* “Research: How Employee Experience Impacts Your Bottom Line” (March 2022), Harvard Business Review, Kate Gautier, Tiffani Bova, Kexin Chen, Lalith Munasinghe

https://hbr.org/2022/03/research-how-employee-experience-impacts-your-bottom-line