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What is employee experience and why is it important?

A positive employee experience can foster strong company culture and drive business objectives.

According to a 2021 Willis Towers Watson global survey, 92% of employers said enhancing employee experience is an important priority for their organizations for the next three years. Why? 

Employees have a lot of choices for where to work. They expect a workplace experience that makes them excited, valued, and happy to be there. Many employees will walk away if their expectations aren’t met. And that can be costly for employers. It’s estimated that the US spends up to one trillion dollars in turnover expenses every year. Aside from turnover cost, a poor employee experience can hurt a business’ reputation, decrease productivity, and reduce employee morale. 

In this blog post, we’ll go over what employee experience actually means and why it’s so important for businesses. Then we’ll leave you with key tips to improve the employee experience at your workplace.

What is employee experience?

Employee experience is made up of the interactions that your employees have at work. This includes the technology they use, the people they work with, and the environment that they work in. That means employee experience is the sum of three core ingredients: technology, culture, and the workplace.

An employee’s experiences with their company may also change over time. For example, an employee who goes into work and plays with three office dogs, gets lunch with their favorite coworker, and completes a major project might say that their experience on that day was incredible. But, if you zoom out and look at the experience over a course of 6 months, that experience will fluctuate. So it’s important to think about employee experience at the organizational level rather than the individual one. 

The key to understanding employee experience at the organizational level is to have specific and measurable indicators. This can include things like employee satisfaction, productivity, engagement, and retention.

Why is employee experience important?

For businesses to succeed, they need to prioritize employee experience. Employee experience affects more than retention and turnover like we mentioned before. It is woven into many other business success metrics, including productivity, culture, and even revenue.

That’s because a business is more than a product, service, or building space.  People are at the heart of a business. When businesses invest in and care for their people, they can expect tremendous returns. 

Here are 5 reasons why employee experience is important for business success.

1. Creates more engaged and productive employees

Happier employees lead to better performance. According to a study conducted by Oxford University, happier employees are 13% more productive. And needless to say, more productive employees can drive better business outcomes. 

Companies like Google have had great success by putting employee experience first. According to a study by a team of professors at Warwick University, Google’s employee satisfaction rate rose by 37% after they invested more in employee support.

2. Attracts and retain top talent

Before a candidate decides to apply for a position with your company, they’ve likely researched it through Glassdoor or LinkedIn to learn more about how employees like working there. They’re looking for specific call-outs of a great employee experience where employees feel heard and valued. They’re searching for perks in the workplace, high-quality technology, and a supportive culture. 

Not only do those requirements help attract candidates, but they also help retain employees. In fact, 62% of people listed a toxic company culture as the main reason they left their job last year. Creating a positive employee experience can have significant effects on attracting top quality talent and retaining them.

3. Creates a strong workplace culture

One of the core pillars that makes up employee experience is the workplace culture. A strong culture that supports, empowers, and celebrates employees can create a positive employee experience. And a positive employee experience can drive a deeper sense of community at work.

When employees feel a sense of belonging or a meaningful connection to their teams, they’re more likely to contribute better and more thoughtful work. Plus, according to a report by BetterUp, a sense of belonging among employees can lead to a 56% increase in job performance and a 50% decrease in the risk of employee turnover. 

4. Improves employee well-being

A poor employee experience can be a lot of things. It can be one that leaves your teams stressed because technology doesn’t work. It can be a toxic work culture. Or even a workplace that doesn’t support productivity and creativity. No matter the case, this drains your employees, and makes them feel burnt out and unhappy.

On the other hand, a positive employee experience can improve employee morale and well-being in and out of the workplace. Plus, when employees feel engaged, refreshed, and valued at work, they are more likely to contribute higher-quality work. Research shows that when people work with a positive mind-set, performance on nearly every level – productivity, creativity, engagement – improves.

5. Reduces turnover rate

A low turnover rate means that your employees like where they are and want to stay there. Turnover can be costly from a financial standpoint, and from a reputation standpoint as well. High turnover rates can also drain your HR and recruiting team’s resources. When you don’t retain your top talent, you risk meeting your company goals as well. 

When you invest in creating a great employee experience, you’re telling your people that you care about how they feel at your company and you want them to stick around for the long-haul. 

How to improve employee experience

Now that we’ve walked through a few reasons why the employee experience is so important for businesses to master, let’s talk through a few ways you can improve your employee experience. You might already be excelling in this area, but it’s important to keep iterating and improving on your current plans. 

Here are a few ideas to get you started:

1. Provide learning and development opportunities

Investing in your employees’ education and skills can be a great way to improve their experience at work. Employees will feel like a valuable and important part of the workforce and excited to bring their new skills to the table. 

Offer a training stipend for employees to take classes on topics they’re interested in. Or bring in trainers from various skill sets to host team-wide training. 

2. Focus on manager training

The old adage that people quit bosses, not companies might have some truth to it. According to a report by GoodHire, 82% of American workers said they would potentially quit their job because of a bad manager. Communication and relationships between managers and employees is a key part of a good employee experience. Employees spend the majority of their time working with their team and managers. 

Conduct training for managers and leadership to make sure the leaders in your organization are providing an upstanding work experience for their employees.

3. Use the workplace to set your employees up for success

Employees returning to the office have new needs for their workday to help them be their most creative, productive, and collaborative selves. That could look like plenty of snacks and coffee on tap to keep them fueled for the day. Or it could look like plenty of comfortable workspaces to get into the creativity-zone.

Employees are expecting more of their workspace. So consider how you might make changes to your workplace policy or upgrade your workspace to set your employees up for success. 

Tools and technology are what drive the operations of a workplace. It can be frustrating for employees to have to switch between apps to book a desk or find a meeting room. Part of a great employee experience is being able to get what you need for the day and get started on your work. Especially in a hybrid model, where technology such as WiFi and Zoom meetings are what connect employees to their colleagues.

Evaluate your current workplace tools and determine whether you need to make an upgrade to a more seamless workplace platform.

A positive employee experience can drive success for businesses. Companies should invest in high-quality technology, a comfortable workplace, and a supportive company culture. Making the workplace a more supportive and empowering place can help improve the overall work experience for employees and leaders alike.

Curious to learn more? Check out our solutions for creating a great workplace experience.

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Maria Akhter
Author Bio Maria Akhter

Maria is a content marketing manager at Envoy, where she helps workplace leaders build a workplace their people love. Outside of work, her passions include exploring the outdoors, checking out local farmers' markets, and drinking way too much coffee.