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What is Employee Experience & Why Does It Matter?

Cassandra Rose, SPHR, SHRM-SCP

Because work com­pris­es near­ly a third of our lives, many orga­ni­za­tions are on a mis­sion to make work more enjoy­able and engag­ing by invest­ing in the employ­ee expe­ri­ence (EX).

Sim­i­lar to the con­cept of cus­tomer expe­ri­ence (CX), employ­ee expe­ri­ence refers to inter­ac­tions and expe­ri­ences an employ­ee has with their employ­er, work envi­ron­ment, and col­leagues from their unique per­spec­tive.

There’s not a one-size-fits-all solu­tion to EX. Some fac­tors that influ­ence employ­ee expe­ri­ence and impact engage­ment include team inter­ac­tions, rela­tion­ships with man­agers, learn­ing and devel­op­ment oppor­tu­ni­ties, and resources and tech­nol­o­gy that help them do their jobs.

While ben­e­fits pack­ages can also fac­tor into EX, they are not one in the same. EX goes beyond tan­gi­ble ben­e­fits and perks and answers the ques­tion: ​“How can we give our peo­ple a rea­son to be excit­ed about going to work?”

Why is EX important?

Orga­ni­za­tions are invest­ing in employ­ee expe­ri­ence to improve the rela­tion­ship between employ­ees and their work­places. By dri­ving EX, employ­ers are improv­ing employ­ee recruit­ing, employ­ee engage­ment, and employ­ee reten­tion efforts.

This is because EX has a holis­tic impact on both the employ­ee and employ­er. A strong employ­ee expe­ri­ences drives:

  • Employ­ee hap­pi­ness & healthiness
  • Pro­duc­tiv­i­ty & growth
  • Employ­er brand
  • Cus­tomer satisfaction

Employee Experience and Employee Happiness & Wellness

Men­tal health is a top pri­or­i­ty for employ­ees every­where. From diag­noses to per­son­al and glob­al stres­sors, men­tal health solu­tions have become less of a want and more of a need. 46% of peo­ple plan­ning to quit are quit­ting because of stress. Life is stress­ful enough with­out hav­ing to wor­ry about per­for­mance at work. That’s why employ­ees at com­pa­nies with a great employ­ee expe­ri­ence are less like­ly to suf­fer from work-relat­ed stress and burnout and stay loy­al to their employers.

Employee Experience and Growth & Productivity

Employ­ee expe­ri­ence is cru­cial for a company’s suc­cess. Research by Deloitte shows that com­pa­nies with high employ­ee engage­ment and sat­is­fac­tion out­per­form their com­peti­tors by 147% in earn­ings per share. Not only that, com­pa­nies with a high­er num­ber of engaged employ­ees see a 41% reduc­tion in absen­teeism and a 17% increase in productivity.

Employee Experience and Employer Brand

A pos­i­tive employ­ee expe­ri­ence is foun­da­tion­al in cre­at­ing an employ­er brand that sig­nals who you are to cur­rent and prospec­tive employ­ees. Accord­ing to SHRM, a strong employ­er brand ​“com­mu­ni­cates that the orga­ni­za­tion is a good employ­er and a great place to work.”

This is why com­pa­nies are more like­ly to attract and retain top tal­ent when they cre­ate an expe­ri­ence that allows employ­ees to feel con­nect­ed to their work and val­ued beyond their job descriptions.

In fact, com­pa­nies that pri­or­i­tize com­pa­ny cul­ture and EX have 59% low­er turnover rate.

Employee and Customer Satisfaction

Pri­or­i­tiz­ing cul­ture affects your peo­ple — includ­ing both employ­ees and cus­tomers. Cre­at­ing a strong employ­ee expe­ri­ence not only pro­vides the space for more col­lab­o­ra­tion and inno­va­tion, engaged employ­ees are more like­ly to pro­vide excel­lent cus­tomer ser­vice. Gallup con­firmed that engaged busi­ness­es earn a 10% increase in cus­tomer rat­ings and a 20% increase in sales.

Benefits of a strong EX

A strong employ­ee expe­ri­ence has ben­e­fits that extend far beyond the indi­vid­ual employ­ee. When employ­ees feel sup­port­ed, val­ued, and engaged, they are more like­ly to be pro­duc­tive, moti­vat­ed, and com­mit­ted to their work.

This sense of ful­fill­ment can impact an orga­ni­za­tion’s bot­tom line. Engaged employ­ees are more like­ly to pro­vide excel­lent cus­tomer ser­vice, lead­ing to increased cus­tomer loy­al­ty and rev­enue. Com­pa­nies that excel in cus­tomer expe­ri­ence have a 1.5 times high­er employ­ee engage­ment rate than com­pa­nies with poor cus­tomer experience.

A pos­i­tive EX can also lead to decreased turnover rates and reduced costs asso­ci­at­ed with recruit­ment and train­ing. Engaged employ­ees are more like­ly to stay with a com­pa­ny, which can save orga­ni­za­tions sig­nif­i­cant time and resources in the long run.

Addi­tion­al­ly, a strong employ­ee expe­ri­ence can enhance the over­all cul­ture and rep­u­ta­tion of the orga­ni­za­tion. This helps attract top tal­ent and improves brand per­cep­tion among cus­tomers and stakeholders.

Ulti­mate­ly, invest­ing in employ­ee expe­ri­ence can have a sig­nif­i­cant impact on orga­ni­za­tion­al success.

See how Fringe can help boost your EX

Employee Experience vs Employee Engagement

While employ­ee engage­ment and employ­ee expe­ri­ence are relat­ed, they play unique roles with­in a com­pa­ny’s cul­ture. Employ­ee engage­ment refers to the emo­tion­al con­nec­tion employ­ees have with their work. Employ­ee expe­ri­ence, on the oth­er hand, is the umbrel­la term for all of the inter­ac­tions and expe­ri­ences dur­ing the employ­ee life­cy­cle, which includes engage­ment in their work.

Ways to Measure EX Success During the Employee Lifecycle

To mea­sure employ­ee expe­ri­ence suc­cess, it’s impor­tant to con­sid­er the var­i­ous stages of the employ­ee life­cy­cle: recruit­ment, onboard­ing, devel­op­ment, reten­tion, and off­board­ing. The key is to cre­ate an open chan­nel of communication.

Employee Experience and Recruitment

Orga­ni­za­tions can use met­rics such as time-to-hire, can­di­date sat­is­fac­tion sur­veys, and the num­ber of qual­i­fied can­di­dates per open­ing to mea­sure the suc­cess of the recruit­ment process.

Employee Experience and Onboarding

Feed­back sur­veys can help mea­sure the effec­tive­ness of the onboard­ing pro­gram and iden­ti­fy areas for improvement.

Employee Experience and Development

Orga­ni­za­tions can mea­sure employ­ee engage­ment lev­els, track the com­ple­tion of train­ing and devel­op­ment pro­grams, and gath­er feed­back on per­for­mance reviews.

Employee experience and Retention

Met­rics such as employ­ee sat­is­fac­tion sur­veys, turnover rates, and exit inter­views can pro­vide insights into the over­all employ­ee experience.

Employee Experience and Offboarding

Orga­ni­za­tions can mea­sure the effec­tive­ness of the off­board­ing process through exit sur­veys and feed­back from depart­ing employees.

Gath­er­ing feed­back from employ­ees through sur­veys, focus groups, and one-on-one con­ver­sa­tions at each stage of the employ­ee life­cy­cle is a key way to mea­sure the suc­cess of the employ­ee expe­ri­ence and make data-dri­ven deci­sions to improve it.

How to Create a Better EX

When it comes to employ­ee expe­ri­ence ini­tia­tives, employ­ee well­be­ing is key. Yet tra­di­tion­al approach­es no longer work.

In the past, orga­ni­za­tions would invest in employ­ee expe­ri­ence by address­ing one employ­ee need with one pro­gram at a time — a men­tal health pro­gram this year, a fer­til­i­ty ben­e­fit the next — result­ing in low uti­liza­tion rates because no pro­gram addressed every employ­ee need.

Today, orga­ni­za­tions are mov­ing away from this top-down approach in favor of lifestyle ben­e­fit plat­forms like Fringe that are designed with employ­ee choice and flex­i­bil­i­ty in mind.

Since 96% of employ­ees want per­son­al­ized ben­e­fits that reflect their needs, lever­ag­ing the pow­er of employ­ee choice is the most effec­tive way of cre­at­ing an effec­tive EX for everyone.

Boost your EX with Fringe

Here’s how to cre­ate a bet­ter EX with lifestyle benefits:

1. Part­ner with a lifestyle ben­e­fits plat­form to give employ­ees access to well­be­ing solutions

A pos­i­tive employ­ee expe­ri­ence means dif­fer­ent things to dif­fer­ent peo­ple. For some employ­ees, it will look like access to men­tal health ser­vices. For oth­ers, it’s a trip to the gym, a mas­sage, or sim­ply hav­ing din­ner deliv­ered on a busy week­night. By rolling all of these options into one plat­form, employ­ers can lever­age the pow­er of cura­tion and choice to impact EX.

2. Deter­mine how to fund employ­ee accounts.

Most orga­ni­za­tions start with a month­ly or quar­ter­ly stipend and then add in addi­tion­al fund­ing lat­er on. For exam­ple, they may start with a $50/​mo stipend, then give man­agers access to addi­tion­al funds that they can dis­trib­ute for rewards & recog­ni­tion pro­grams, or sep­a­rate funds to cel­e­brate employ­ee birth­days and work anniversaries.

Learn how much to bud­get for lifestyle ben­e­fits based on indus­try bench­marks.

3. Employ­ees use the funds to pick ser­vices that meet their every­day needs

By using a lifestyle ben­e­fits plat­form, employ­ees are empow­ered to pick the well­be­ing ser­vices that are most like­ly to impact their employ­ee expe­ri­ence. This is why lifestyle ben­e­fits pro­grams aver­age 85% uti­liza­tion, where­as piece­mealed EX pro­grams suf­fer from <10% utilization.

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Dri­ving employ­ee expe­ri­ence is a must-have for orga­ni­za­tions seek­ing to recruit, engage, and retain tal­ent in a com­pet­i­tive labor mar­ket. The ben­e­fits of a pos­i­tive employ­ee expe­ri­ence extend far beyond the indi­vid­ual employ­ee. Research shows that a pos­i­tive EX is like­ly to impact a vari­ety of busi­ness out­comes, includ­ing an increase in pro­duc­tiv­i­ty, reduc­tion in absen­teeism, decrease in turnover, increase in cus­tomer sat­is­fac­tion, and increase in sales.

To meet a vari­ety of employ­ee needs, orga­ni­za­tions are lever­ag­ing lifestyle ben­e­fits plat­forms like Fringe to pow­er their EX programs.

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