Why is employee experience important?

The most successful organizations attract and retain top talent. When the economy is good, the competition for top talent is high, and the need for effective talent acquisition and retention grows. During difficult times, such as the COVID-19 pandemic and recession, attention to employee experience can help companies become more competitive and prevent the worst repercussions.

In general, companies with positive employee experiences, as indicated by barometers such as high scores in research studies and inclusion in top places to work lists, also have high customer experience (CX) scores and positive revenue growth. Numerous studies show a direct link between employee experience and customer experience.

Employee perceptions and experiences will affect every aspect of a company’s processes. Happy employees who perceive their experience as good are more engaged and complete tasks more effectively and efficiently. Employee experience directly affects other aspects of the workplace. For example, employees who have positive experiences are more likely to commit to and stay at an organization than employees with negative experiences.

Happy employees are more likely to promote the company as a great place to work. This leads to more candidate referrals for open positions and increased fill rates because job seekers pay attention to employee work experience and company workplace culture ratings. This is one reason why company review sites, such as Glassdoor, have grown in popularity. Bad reviews turn candidates away from a company, while good ones draw them in.

Employee experience also affects worker engagement. Higher engagement levels improve company culture, increase productivity and have a positive effect on revenue and profits.

Benefits of a positive employee experience

Strengthening employee experience has numerous benefits associated with employee job satisfaction. This leads to higher profits and a better ranking in an industry or market. Some advantages include the following:

• More engaged, productive employees. Disengaged employees cost companies billions of dollars annually through lower productivity and profitability and increased absences. Engaged employees are more productive and bring other advantages, such as improved employee retention rates and workplace safety.
• Higher quality of work. Satisfaction levels influence job success more than IQ or skill set, according to research from Harvard University psychologist and happiness expert Shawn Achor and others. For example, a “happy” brain sees more possibilities and is more creative.
• Improved customer relations. An organization’s employee experience affects all areas of its business, including the CX. Indeed, many industry experts believe CX is a direct result of employee experience. Happy employees are more likely to convey better moods and emotions while interacting with customers. They also tend to be more engaged with, dedicated to and articulate about an organization’s products, services or mission, enabling them to better support customers and prioritize customer satisfaction.
• Better work-life balance. A positive employee experience promotes work-life balance through flexibility, support and well-being initiatives. Most companies that prioritize employee well-being offer flexible work arrangements, reasonable workloads and wellness programs that help employees easily manage their personal and professional responsibilities.

Challenges of employee experience

While employee experience is often linked to benefits, there are several challenges to fostering a positive employee experience. Organizations must overcome various obstacles to ensure employees feel valued, motivated and engaged. These challenges include the following:

• Lack of recognition. Employees might feel unappreciated if their hard work and contributions go unnoticed. Without proper recognition, they become disengaged and less motivated to do their best.
• Inconsistent employee engagement. Ensuring consistent employee engagement across teams and departments can be challenging. Different managers might have varying levels of awareness and commitment to fostering a positive employee experience, leading to inconsistencies in engagement levels. It’s important to make employee engagement a part of the corporate culture.
• Resource requirements. Organizations with limited resources might struggle to adopt comprehensive employee recognition programs or invest in initiatives that enhance the overall employee experience. This hinders their ability to create a positive work environment. Limited resources also reduce the ability to collect employee sentiment analysis.
• Communication and feedback gaps. Effective communication and regular feedback are vital for a positive employee experience. However, organizations may face challenges in providing timely and constructive feedback, leading to misunderstandings and decreased employee engagement.
• Employee burnout. Employee burnout stems from a negative experience characterized by excessive workload, lack of support and unclear expectations. When organizations fail to address these issues, employees feel overwhelmed and undervalued, increasing the risk of burnout and attrition.

Stages of employee experience

The employee experience process can be divided into several stages, each with its unique characterizations and opportunities for recognition. By understanding these stages, organizations can tailor their employee recognition efforts to meet employee needs at different points in their journey.

• Preemployment. The preemployment stage refers to the period before an employee officially joins the organization. During this stage, organizations set the tone for a positive employee experience, providing clear communication and a warm welcome. Recognizing new employees makes them feel valued and excited about joining the organization. Ways to do this include sending personalized welcome messages, organizing preemployment meetups and providing useful resources for their role.
• Onboarding. The onboarding of new hires is crucial for setting employees up for success and ensuring a smooth transition into their job roles. Recognizing them during this stage helps build a positive foundation for their experience. Reasonable steps at this stage include assigning a mentor, providing comprehensive training and celebrating milestones, such as completing training modules or successfully completing a first project.
• Day-to-day experience. The day-to-day experience is the ongoing interaction employees have with their work, colleagues and managers. Recognizing employees regularly during this stage is essential to maintain engagement and motivation. Employer can express gratitude for a job well done, acknowledge employees publicly during team meetings and set up a peer recognition program where employees can call out colleagues’ accomplishments.
• Career development. The career development stage focuses on employees’ continuous learning, growth and advancement within the organization. Recognizing employees’ career milestones, such as promotions, certifications and successful completion of training programs, reinforces their commitment to the organization. Providing opportunities for personal and professional growth, such as mentorship programs and access to training resources, shows employees that the organization values their development.
• Transfers and departures. The transition or departure stage refers to the period when an employee decides to leave the organization or transitions to a different role within the company. Recognizing employees during this stage is crucial for maintaining positive relationships and ensuring a smooth transition. Recognition here includes conducting exit interviews to gather feedback, expressing appreciation for their contributions and providing support in their next career move.

How to create a great employee experience

Employee experience isn’t a one-and-done prospect, and there isn’t just one way to create a positive employee experience. Key strategies for organizations aiming to enhance employee experience include the following:

Focusing on values

Companies known for qualities such as commitment to employees and a business strategy that focuses on values, mission and higher purpose tend to provide a better employee experience. When employees see that a company genuinely upholds its core values, through ethical business practices, social responsibility and investment in employee well-being, they feel a stronger sense of belonging and purpose.

Fostering mutual trust

Establishing trust between leadership and employees is essential. The better employers provide an environment of trust and respect between workers and their leaders where even negative feedback is provided. This fosters more honest feedback from employees that the HR team and business leaders can then use to make improvements.

When leaders are transparent, keep commitments and actively listen to their teams, employees stay more engaged, motivated and committed to the organization.

Providing seamless technology and workspaces

Physical workspace, culture, emotional well-being and technology all create a great employee experience. As a result, business and HR leaders must give all these areas attention. Examples include the following:

• Designing workspaces that are comfortable while supporting productivity.
• Prioritizing work-life balance.
• Providing technology that’s effective and user-friendly.

Performance management initiatives

Performance management can also create a strong employee experience. Successful managers understand that this goes beyond just using performance management software for annual performance reviews. Here are three factors in a successful performance management program:

• Purpose. Focus on syncing an employee’s personal and career goals and values with the business’s purpose, values and mission. A sense of purpose is a critical factor in a positive employee experience.
• Passion. Provide ways for employees to do things they care about through their work to create a sense of fulfillment and become more productive.
• Knowledge and skills. Offer employees ways to gain new skills and knowledge that they need to complete their work, excel in their performance and contribute more to the company.

Employee recognition programs

Similarly, employee recognition programs can positively affect the employee experience. Managers should celebrate employees when they hit their key performance indicators or sales goals. Recognizing hard work helps employees feel valued, essential to the company and that what they’re doing matters.

Implementing an employee recognition program is essential for creating a positive employee experience. Employee recognition ideas and key features that organizations should consider include the following:

• Employee of the month or quarter.
• Peer-to-peer recognition in which employees can nominate each other for recognition.
• Personalized recognition, such as handwritten notes, small meaningful gifts and gift cards.
• Performance-based incentives.
• Team celebrations.
• Employee appreciation events, such as team member lunches or retreats.
• Career development opportunities.
• Flexible work arrangements for work-life balance.
• Employee engagement surveys.
• Rewards and recognition platforms.

Providing work-life balance

Providing flexibility in work schedules or locations helps improve employees’ work-life balance, leading to higher job satisfaction and reduced employee burnout.

When employees have the flexibility to manage their professional and personal responsibilities effectively, they experience lower stress levels, increased job satisfaction and improved well-being. For example, companies that support work-life balance — through flexible work arrangements, reasonable workloads and wellness initiatives — demonstrate a commitment to their employees’ overall quality of life.

Employee feedback

Employee feedback is also important. Opportunities for gathering feedback start with applicants and job candidates going through the hiring process and continue on through to exit interviews. Gathering continuous employee feedback yields important information, such as the following:

• The point at which candidates decide to work for a company.
• The effectiveness of the onboarding experience.
• Changes in employee experience as a company grows.
• Employees’ ideas for improvements.
• Indicators of employee frustration and burnout.
• Different ways management can connect with employees.
• Insight from the employee’s experience if they leave the company.

Employee experience vs. employee engagement

The difference between employee experience and employee engagement lies in the difference between experience and engagement. Put simply, employee experience is holistic and encapsulates everything an employee thinks, feels and sees. It encompasses an employee’s interactions with the organization throughout their tenure.

In contrast, employee engagement refers to how positively an employee is occupied with or committed to the job. Employee engagement is one result of the overall experience and tends to be associated more with productivity.

Employee engagement is often viewed as an approach that primarily focuses on specific technology tools and perks for employees, such as free food. While these factors contribute to employee experience strategies, they don’t replace the need for a comprehensive and long-term approach to cultivating happy, loyal and productive employees.

There are many variations of the definitions of employee experience and employee engagement and the associated differences. Vendors and human resource (HR) experts might have their own definitions. Regardless of these differences, after decades of focus on both employee experience and employee engagement, studies show companies are still struggling with employee engagement and well-being and many employees aren’t happy at work.

Digital employee experience vs. physical employee experience

Employee experience includes both digital and physical elements, which play a crucial role in shaping overall job satisfaction and performance.

• Digital employee experience. Digital elements of an employee’s experience encompass how employees interact with workplace technology, including software, hardware and digital platforms. A seamless digital experience lets employees perform tasks efficiently without unnecessary disruptions and improves productivity. On the other hand, a poor digital experience can lead to frustration, decreased efficiency and higher employee turnover rates.
• Physical employee experience. This part of the employee experience includes tangible aspects of the workplace, such as office layout, furniture and amenities in the overall environment. A well-designed physical workspace enhances comfort, collaboration and well-being, boosting job satisfaction and morale. On the other hand, a poorly designed physical environment can impede productivity and adversely affect employee health and engagement.

In today’s evolving work landscape, especially with the rise of remote and hybrid models, the emphasis on digital employee experience has intensified. Physical experience is less prominent for remote workers, making digital interactions crucial. Hybrid workplaces are reimagining office spaces to focus on collaboration and social elements of the physical office experience when employees are on site.

Hiring a chief experience officer (CXO)

A CXO plays a crucial role in shaping a great employee experience by fostering a culture prioritizing engagement, well-being and growth. CXOs achieve this by aligning organizational goals with employee needs and ensuring workplace policies, technology and culture support productivity and satisfaction.

By executing strategies for continuous feedback, recognition and work-life balance, CXOs also enhance employee motivation and retention. Additionally, CXOs use data from employee satisfaction surveys and other metrics to make informed decisions to improve the employee experience.

Employee experience framework

An employee experience framework is essentially a structure or strategy to improve the environment organizations provide employees.

Employee experience borrows heavily from the field of CX management, using design thinking strategies to optimize a company’s work environment, culture, HR services and events. Just as marketers have worked to understand the total CX at touchpoints across the entire customer journey, business and HR leaders can create employee journey maps, which are graphical representations of an employee’s organizational path.

Employee journey maps typically focus on moments that matter in the employee lifecycle, the junctures that most profoundly affect the experience. They can also focus on a specific type of employee persona or a particular part of the journey. These maps are key to building a successful framework.

The journey often begins with the recruitment and interview processes, then advances to touchpoints such as the offer letter and the employee’s first month with the company. As a result, a positive onboarding process and easy assimilation into the work environment are essential to creating a strong employee experience framework. Other major touchpoints that affect the framework include first-year reviews, employee talent development and professional development opportunities and promotions.

In addition, how a company responds to employees’ personal milestones, such as marriage and childbirth, should be considered when designing an employee experience framework. Not only should time off plans be considered, but processes to ease transitions back into the workplace after extended time away should be in place as well.

Employee experience surveys, people analytics and talking to employees one-on-one and in small groups can boost the accuracy and effectiveness of a company’s employee experience map. Employers shouldn’t make assumptions about what their workers might want or need and, instead, should hear from the employees directly. The only people who clearly know how to elevate the employee experience are the employees themselves.

The leader’s voice is an essential element of the employee experience framework. Leaders, such as C-suite executives and other managers, are responsible for creating the company culture and confirming business values. Employees should be able to relate to their leaders. Executives should provide managers with clear guidelines of what is expected of them, while also providing the relevant skills and information needed to take positive action and strengthen the experience.

Employee experience tools

Employee experience tools focus on areas such as communication, performance management, recognition and well-being. The following is an unranked, alphabetical list of popular employee experience tools based on Informa TechTarget’s research:

• BambooHR. Streamlines HR functions and enhances employee experience.
• Deloitte Human Capital as a Service. Optimizes the integration of people, processes and technology within organizations.
• Headspace for Work. Supports mental well-being with meditation and stress management tools.
• Lattice. Helps set goals, provide feedback and conduct performance reviews.
• Limeade. Focuses on employee well-being, engagement and inclusion.
• Microsoft Teams. Provides chat, video calls and document sharing.
• Microsoft Viva Glint. Uses AI-driven analytics and insights to improve engagement.
• Officevibe. Gathers anonymous feedback to track employee morale.
• Oracle HCM Cloud. Offers AI-driven insights for workforce experience improvement.
• Qualtrics Employee XM. Provides surveys and analytics to measure employee sentiment.
• SAP SuccessFactors. Provides a comprehensive suite for talent management and engagement.
• ServiceNow. Provides digital workflow options to help organizations automate and streamline their business processes.
• Slack. Enhances team communication and collaboration.
• Wellable. Promotes physical wellness through health challenges and activity tracking.
• Workday. Offers an integrated option for performance tracking and career growth.
• Zoom. Supports virtual meetings and remote work collaboration.

Employee experience is a critical component of bottom-line business performance success. Read this guide to build an effective employee experience strategy.

Kate Brush also contributed to this article.