The ROI of Employee Experience
Updated: Apr 25
Employee experience (EX) exists whether a company actively focuses on it or not. The amount of care, strategy and attention put into it makes all the difference in how positively that experience is perceived by employees. Companies with the best EX are consistently found on lists of the best places to work and are unsurprisingly among the most successful businesses. By always improving employee experience, a company can improve their organizational culture and bottom line in one swoop.
When any smart business owner or manager faces a business-critical decision, one of their first steps is to conduct a cost-benefit analysis. Putting employee experience under such a microscope quickly reveals that the equation is heavily tilted to one side.
Employee Experience Strategy Benefits
Employee experience is just as important as customer experience. In fact, the two are practically intertwined. If the employees are happy and engaged, the customer is too. When a business commits to employee experience, the benefits travel from the employees to the brand as a whole and to each customer.
In a recent analysis of retail stores conducted by Harvard Business Review, “stores whose customer-facing employee base was more tenured, had more experience in prior rotations, was higher skilled, and was more skewed towards full time”—in other words, stores showing the hallmarks of top-notch employee experience—saw a “45 percent increase in profits per person-hour.”
Better company culture
When employees like the place they work, they’re more engaged. Organizational culture goes beyond the work itself. It includes the people, the company’s mission, inclusivity and countless other aspects. Devoting resources to creating a welcoming culture and a culture of growth and development is always worth it. When employees feel fulfilled when they’re in the office or when they log on, you get their best work.
One of the biggest reasons an employee likes the place they work is because they like the work they do. By investing in giving employees ways to grow their skills and proving that their work contributes to company success in a meaningful way, you can make sure they’re always engaged with their work. When that happens, you get a more efficient operation.
Reduced hiring costs
Happy employees tend to switch jobs less frequently. Better retention therefore reduces the time and money spent in search of new employees. Additionally, it’s easier to recruit when you have the type of company people want to work for. So, when you do have to hire, you can expect a line of quality candidates outside your door.
A Great Employee Experience Starts with New Hires
When a company hires a new employee it’s because that person fills a need. The employer posted a job because they recognized that filling such a role would be beneficial to the company in some way. They undoubtedly reviewed stacks of résumés, interviewed a slew of candidates and ultimately chose the one they felt had the skills and experience that could make the biggest impact. Yet after all that, many employers don’t give the onboarding process proper attention. It’s unfortunate because onboarding is one of the most critical moments in shaping employee experience.
Even the most highly skilled employees are not turnkey pieces of a team. A concerted effort to smooth their transition into a new role is essential. This step is often skipped because leaders are crunched for time—which might be part of the reason they were hiring in the first place—or they simply don’t have the experience necessary to properly onboard a new team member and they don’t know where to begin.
They may also be unaware that a little investment in transforming a lackluster onboarding environment into a brilliant one can pay huge dividends!
Download Perfecting the Employee Onboarding Experience, a comprehensive guide to transforming your employee onboarding experience.
Employee Onboarding’s Impact on Employee Experience
Onboarding a new employee is more than just a series of meetings, getting a computer and login information and getting the employee handbook. A successful onboarding experience can help employees feel valued, engaged and productive. And that’s not just a theory! The data on onboarding’s effect bears it out:
According to the Society for Human Resource Management, companies with a strong onboarding program report higher retention rates. Their research states that 69 percent of employees staying with the company for at least three years compared to only 44 percent at companies without a structured onboarding process.
New Hires are more productive
Companies with best-in-class onboarding saw a 54 percent increase in new hires who felt “fully productive” compared to those at companies with a poor onboarding process according to a report by the Aberdeen Group.
In a survey by Gallup, only 12 percent of employees strongly agree that their organization does a great job of onboarding new employees. However, employees who go through a great onboarding experience are 69 percent more likely to be engaged in their role compared to those who go through a poor onboarding experience.
A better onboarding experience can also benefit business leaders by creating more time for them to perform their own critical tasks. There may be a slight downtick in productivity by leaders in the early stages of onboarding, as they spend more time showing new hires the ropes. But the sooner a new employee can get a clearer picture of what they need to do and how to do it, the sooner managers and other leaders can go back to their typical duties. Seemingly, bringing any new team member on board will allow for tasks to be spread across a greater number of people, which can help foster a better employee experience across the board.
Employee Experience in the Long Run
Employee experience isn’t just something to focus on when a new hire starts. It’s an ongoing effort. It’s not a sprint. It’s a marathon. That doesn’t mean it’s a grueling slog. In fact, it’s anything but! By deeply ingraining the elements of high-quality employee experience in your everyday workplace environment, it becomes more natural. It’s not something everyone has to make a concerted effort to do day in and day out. It’s the wonderful way things are done all the time—as long as that’s what’s instilled from onboarding on. And as with the lines on your reports representing retention and employee satisfaction, your bottom line will steadily climb.
Transform your employee onboarding experience with our step-by-step guide: