What is employee experience in 2022?
HR leaders have been fighting employees’ corner for years, championing the importance – and value — of a great employee experience.
The pandemic has proven them absolutely right, as employees en-masse re-evaluate what they want and need from their careers. And vote with their feet if those needs aren’t met.
No more loitering on the edge of the corporate agenda, EX has shouldered its way to the top of the conversation.
We wanted to explore what that really means for HR leaders and employees for the year ahead. Where are your peers investing to improve the employee experience? And most important, what do employees say has the biggest impact on their experience?
We spoke to over 1000 employees and 250 HR leaders in companies with more than 100 employees, to answer those questions. Here's a summary of our findings.
Intense scrutiny on HR to drive business value through EX
We know you know employee experience matters. Our findings were pretty definitive, with 99% of HR leaders saying they believe a good employee experience has a positive impact on the bottom line.
And little wonder. Research proves this correlation again and again.
For example, the Employee Experience Index – a comprehensive study of 22,000 workers across 43 countries – found organisations in the top quartile for EX report nearly three times the return on assets and double the return on sales compared to organisations in the bottom quartile.
Our report backs that up, showing employees who rate their experience as good are way more likely to be extremely invested in your organisation’s success than those who rated as poor: 44% vs. 3%. That’s a difference of 1366%.
HR’s rallying cry has been getting louder for years. And business leaders are finally paying full and rapt attention, recognising the huge impact employee experience has on bottom line outcomes. At last, 94% of HR leaders say their leadership team is fully onboard with employee and culture issues.
This awareness brings much-wanted new investment – 75% of HR leaders told us they’ll be investing more into employee experience over the next 12-months.
But it also brings heavy scrutiny, as CEOs look to HR for reassurance that EX is under control. Especially given the pandemic’s disruption, and concerns around the impact of remote working.
The question is, is employee experience under control?
You may think so, but our research suggests HR are overly optimistic compared to employees. 88% of HR leaders in our research rated their EX as very good or somewhat good, but only 65% of employees said the same. That’s a 26% difference – a worrying disconnect that suggests improving EX is an even more urgent priority than you think.
It’s no wonder, then, that 60% of HR leaders said improving ROI from EX initiatives is their major priority. Moving the needle on employee experience means making sure you’re investing into the right places, so you’re getting maximum bang for your buck.
Let’s look at where HR leaders are investing this year — and, more illuminating, where employees wish they were investing.
Where are HR leaders are investing to drive the biggest EX gains?
We asked HR leaders where they’d be investing over the next 12-months, to improve the employee experience. They said:
- Satisfaction surveys (61%)
- Rewards and benefits (55%)
- Technology/software (52%)
- HR skills (51%)
- Staff/talent (43%)
- Diversity & Inclusion (35%)
- Culture (27%)
- Physical workplace environment (16%)
- Improved manual processes (11%)
These are all valid areas for investment – and testament to the vast spectrum of factors that impact EX. But unless you’ve got unlimited budget (ha!), how do you narrow it down?
Looking at what employees say improves their experience is a good start – and when we do that, there’s one clear frontrunner: better technology. Using XCD's HR reporting and analytics solution provides a simple way to gain these vital insights into their organisation and make more informed, well-rounded data driven decisions that have the interests and needs of employees at its core.
Our research saw employees explicitly calling this connection out, with 77% saying poor technology has a negative impact on their experience at work. And employees who rated their workplace tech as advanced were 193% more likely to say their employee experience was good.
We found workplace tech was especially important to employees who are extremely invested in their company’s success and who often go above and beyond. Your most passionate top-performers care most about having advanced tech that empowers them, rather than snarling up their time and stalling progress. Employee Relationship software can be extremely useful in providing a self-service HR solution that empowers employees and provides a clear internal line of communication between teams and colleagues.
Aside from immediate colleagues, few things tangibly impact employees’ day-to-day experience more than the tech they interact with. Nowhere is that truer than HR technology, sitting at the heart of the employee experience web.
The top factors that employees said would compel them to go above and beyond: rewards and incentives (39% and, for those aged 16-24, development and career progression (41%). Great tech is a core enabler for both of those.
A word of caution
Increasing your HR tech maturity might seem the obvious answer to these findings – and in many ways, this is low hanging fruit for improving employee experience. Mirroring the seamless, simple, and intuitive consumer experience for your people is a win. Harnessing technology to drive change where it matters is a win.
But it’s not a silver bullet. There are hidden pitfalls to be avoided in HR tech implementation.
For instance, the CIPD’s research found the impact of improving workplace tech can be a mixed bag. In particular, they identified a dramatic difference in employees’ feelings around technology change depending whether it was mandated or collaborative.
Only 35% of employees had been consulted on the introduction and implementation of new workplace tech. Where employees hadn’t been consulted, only 20% felt positive about the impact on their experience – but where they had been consulted, that leapt by 250%, to 70%.
If you’re considering levelling-up your HR tech ecosystem this year, make sure you involve your people in the process. Like any HR initiative, collaboration and conversation drive adoption far better than mandates.
Our findings show how central great tech is to the employee experience – but never forget that employee experience is about employees. Change must start with putting your people first; inviting them into the conversation and understanding what they want and need.