Despite layoffs and economic uncertainty, the stiff competition for talent can be felt across nearly every industry these days. And with reports indicating that we're experiencing an employee market, companies will need to go the extra mile to not only ensure they can attract the right people to fill open positions, but keep their top performers around for the long haul.
The key? Offer a knockout employee experience (EX).
What is employee experience?
To paraphrase a famous quote, people may forget what you said and what you did, but they'll never forget how you made them feel. And the same can be true in the workplace.
From the very first interaction an employee has with their employer during the hiring process, to the moment they leave the company following their exit interview, these moments and everything that happens in between shape the way they feel about the organizations they work for.
Beyond a paycheque, employees need to feel connected to their workplace. Do they enjoy the company culture? Do they have a great relationship with their manager? Do they have opportunities to grow professionally? Do they have the tools they need to successfully do their job? Do they have a healthy work-life balance?
What someone learns, does, sees, and feels at each stage of the employee journey contributes to the employee experience. So let's explore why it's so important to have solid employee experience initiatives in place.
How does employee experience impact overall performance?
While a positive employee experience is vital on a human level, it also has a huge impact on a business and its revenue growth.
When employees have a great experience, they're far more inclined to do great work, which in turn reaps better results for the company. Here's how a positive employee experience creates engaged employees and impacts overall performance:
When it comes to employee productivity, the equation is simple: happy employees are more productive employees. When you enjoy where you work and love what you do, you feel more driven to perform. And the proof is in the numbers: an Oxford University study found that happier employees are in fact 13% more productive.
While increased productivity is obviously great for business, it also has a domino effect on others, helping to create positive employee experiences for all.
Greater customer satisfaction
Speaking of domino effects, positive employee experience and customer experience also go hand-in-hand. When employees are happy, they feel more engaged, and in turn more invested in the company’s products and services.
Gallup research shows that this directly affects the experience employees offer customers, so much so that high employee engagement results in a 10% difference in customer ratings and an 18% difference in sales. Who can argue with numbers like that?
Better business results
Hinging on employee experience and customer satisfaction is your business’s bottom line. So what does a stellar employee experience mean in terms of business performance and profitability? Well, motivated employees are naturally more engaged. The greater the levels of employee engagement, the more the quality of work improves, and this chain reaction can boost profitability by 23%.
Higher employee retention rates
When you put all the pieces together, a great employee experience also results in higher employee retention rates. And the numbers are very telling indeed. A Gallup survey found that teams with higher employee engagement see 18-43% lower turnover rates.
But that's not all. The icing on the cake is that engaged employees are also 23 times more likely to recommend the company to others as a great place to work. Win-win!
There are a number of things that contribute to a great employee experience. It's crucial for companies to factor in the pillars of a great EX which include:
- a comfortable workspace
- regular recognition
- flexibility and a healthy work-life balance
- open and honest communication
- clear alignment on goals
- up-to-date resources and technology
How to measure employee experience ROI
When you prioritize employee experience, you're making a smart investment in your business. And while investing in a great employee experience makes sense logically, it's also important to take a closer look at the value in terms of a return on investment (ROI) for employee experience initiatives — so that they can be even further justified.
Although we already know that a positive employee experience keeps employees engaged, motivates them to do great work, and reduces turnover, we can still look at it through a numerical lens. There are two ways we suggest doing this:
Manually with data
We know that it pays to invest in your employee experience. For one, it can greatly reduce costly employee turnover. Here's how to calculate your employee turnover rate:
Step 1: Add the number of employees at the start of the year with the number of employees at the end of the year.
For example: 20 employees at the start of the year + 18 employees at the end of the year = 38 employees.
Step 2: Divide the total you got from step one in half (by 2).
For example: 38 total employees ÷ 2 = 19 employees.
Step 3: Divide the number of employees who left during the year by the outcome of the first equation.
For example: 2 employees left during the year ÷ 19 employees = 0.105
Step 4: Multiply this final number by 100 to get your employee turnover rate.
For example: 0.105 × 100 = 10.5% turnover rate.
The real costs of employee turnover can be divided into two main categories: hard and soft costs. Hard costs refer to the more tangible and easier-to-measure costs that most people consider when turnover is on the rise. Their impact is more overt and often felt sooner by the team. Soft costs, on the other hand, are largely unaccounted for or unnoticed until they lead to bigger issues.
Read more about the true cost of employee turnover and learn how you can reduce turnover at your organization.
Using a designated calculator
Our simple ROI calculator can give you quick and easy insights into the return on investment of your employee experience. To calculate your future wins, you just need to answer three quick and simple questions:
- How many employees does your company have?
- What's your turnover rate (%)?
- What’s the average salary at your company?
From here, you can start implementing initiatives to foster a happy, engaged, and productive work environment and ultimately save your company money.
How lg2 improved their employee experience with Officevibe
When lg2, an independent brand marketing agency, was more than doubling in size, maintaining an innovative and positive culture was a challenge.
With this rapid growth, remote distribution, and minimal HR support, lg2’s managers struggled to keep a finger on the pulse of their teams. One-on-one meetings weren’t enough, and town halls elicited little engagement. With Officevibe, lg2’s production team manager was able to engage employees, solicit honest feedback, and build a meeting and recognition structure that solved problems, amplified strengths, and uplifted morale.
Their production team achieved an employee retention rate over 500% better than the industry average. Productive conversations and strong relationships now define this remote team, and the manager loves that it’s so easy to keep his people happy.
Strategies for improving the employee experience and maximizing ROI
The right employee experience strategy can make all the difference to your ability to attract, engage, and retain high-performing employees. So now let's have a glance at key employee experience initiatives you can begin implementing right away:
1. Have a stellar onboarding process for new employees
An exceptional employee experience starts from the word go. First impressions leave a lasting mark on employee engagement, motivation, and retention, so a simple way to start a positive employee experience off on the right foot is to ask the right employee onboarding survey questions at the beginning of the employee journey.
The employee experience begins even before your new hire logs on for their first day. A great onboarding process can make all the difference in employee retention. Learn why.
2. Promote transparent communication
Great communication is the foundation of every healthy relationship, including those in the workplace. Keeping open channels of effective communication can have a tremendous effect on the employee experience and engagement, and counter struggling employee morale.
The cornerstone of strong employee-leadership relationships is crystal-clear communication. Check out these 10 tips to foster employee engagement with effective communication.
3. Create a culture of recognition
Your employees work hard — that's why you hired them. One of the most sure-fire ways to keep your people happy and engaged is to ensure they're being adequately recognized for their efforts and contributions. While some employees may prefer public acknowledgment of their work, some might feel more comfortable with subtler more private kudos.
Start improving recognition in the workplace with these eight tips.
4. Offer professional development
Every employee needs the opportunity to not just grow in their role, but to grow in their career. So when organizations offer paths to career development, employees feel valued, supported, and more motivated. It all starts with a great career development conversation.
5. Establish a feedback system
Consistent feedback is essential to helping employees feel heard and valued. Company leaders and managers need to take their feedback and demonstrate that they're putting it to good use. An efficient employee feedback system helps you take the pulse of how employees are feeling to assess factors like employee engagement, employee satisfaction, and other metrics.
When a feedback system becomes a part of your culture, you're truly elevating the employee experience for all.
6. Conduct stay interviews
We're all familiar with the exit interview, but did you know that it's just as important to conduct stay interviews as well? While you may not be able to convince your employee from pursuing other professional opportunities, the information you gather from stay interviews can be instrumental in your engagement and retention strategies for active and future employees.
Tapping into employee satisfaction levels by asking the right questions can be eye-opening Use our stay interview template to get the conversation going.
Keep your people around for the long haul
The adage "you get what you give" definitely rings true. If you invest in your people and offer a stand-out employee experience, you will reap the benefits of a happier, more engaged, and more productive workforce. But you don't have to go at it alone. With employee engagement solutions like Officevibe, you can gather invaluable feedback, implement data-driven strategies, and measure your initiatives. These real-time insights will go a long way in reducing turnover rates and improving business performance.