Last updated: How does employee experience impact business performance?

How does employee experience impact business performance?

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Countless studies confirm what many of us know intuitively or from firsthand experience: Positive employee experiences have a positive influence on the success of a company.

It stands to reason. If people feel valued and rewarded, if they feel a strong connection to the company culture and have a pleasing physical work environment, they’re more likely to feel engaged throughout the employee lifecycle, which includes recruiting, onboarding, training/development, promotion, and exit.

A positive employee experience gets results

In a study conducted by Gallup that analyzed the differences in performance between engaged and actively disengaged business/work units, those scoring in the top quartile on employee engagement significantly outperformed those in the bottom quartile on these crucial performance outcomes including:

  • 41% lower absenteeism
  • 24% less turnover (in high-turnover organizations)
  • 59% less turnover (in low-turnover organizations)
  • 10% higher customer ratings
  • 17% higher productivity
  • 20% higher sales
  • 21% higher profitability

Clearly, engaged employees drive business success.

Today companies must enhance employee experiences and drive engagement to have a positive influence on the success of your organization, not only from a financial perspective, but from a social point of view as well.

Good employee experiences → high performance

Psychologists began studying employee attitudes in earnest around the 1930s as a means to better understand employer/employee relationships and improve job satisfaction.

As methods for assessing employee satisfaction have become more complex, so has the realization that just being “satisfied” isn’t enough to truly motivate employees and unlock their full value within an organization.

To encourage high performance, employers need to understand what’s important to employees and then act based on that understanding.

In the past, the employee/employer relationship was more transactional – issuing a paycheck for work performed. Today, the relationship is more nuanced.

While compensation is still an important aspect of the relationship, many want their work to have purpose and meaning and relationships with managers that can help then grow.


Work doesn’t work like it once did.
Win, retain, and grow talent in a changing, competitive landscape. Real-life proof points →HERE.


Strategies for better employee engagement

Researchers say companies need to make three changes in order to provide employees with the best experiences to boost engagement:

  1. From functional job execution to purpose-led empowerment. Instead of compliance to narrow job descriptions, leaders must recognize empowered employees as a critical enabler of company strategy and success and invest in strengthening the connection of employees to the mission of the organization.
  2. From disinterested surveys to collaborative understanding and action. Companies must shift from periodically measuring employee satisfaction to gathering candid insights that drive conversations with managers.
  3. From HR-driven programs to employee-engaging leaders. The individuals who lead people and teams must be ready to fulfill their personal responsibility to engage employees every day instead of relying on the periodic motions of HR programs.

If strong employees deliver high performance, how can organizations fortify their workforces? Organizations must invest in their experience management know-how, focusing on strengths-based programs that boost workplace culture, technology, and competency.

Company culture and the CX effect

Employee experience plays a substantial role in how effective, efficient, motivated and productive your employees are. But the benefits of great employee experience don’t stop at the employee level.

Research shows that customer experience leaders have more highly engaged employees than do their peers. When employees feel cared for and supported, they go above and beyond for the customers they serve.

Your company culture influences how connected your employees are to your organization. An experience management program can help you create a culture that fosters employee loyalty. But to succeed, there needs to be a strong belief across the organization that nurturing the employee experience is something a good manager does.

This mindset is key to progress. So it’s important both to create organization-wide buy-in and foster a belief that new ways of working are truly valued by the organization’s senior leaders.

Bottom line: Everyone wins

Engaged employees are among a company’s most valuable assets as they trigger a virtuous cycle, which drives good customer engagement and superior business results. Embedding employee experience initiatives into an organization’s people strategy is critical.

Organizations must focus on changing the way they provide value not only to their customers, but also to their employees. Creating a positive working environment is one way to do this, and it goes beyond free food and ping-pong tables.

It’s about supporting your people by understanding every aspect of their experience – including family, time, and health factors that affect performance.

In the same way CX data is used to understand customers’ needs, employee experience data can help to understand employees’ values.

The workforce today is becoming increasingly diverse, global, and complex, with many types of employees including full-time, part-time, freelancers, and contractors, from multiple generations and locations. One size does not fit all.

Adopting a segmented approach to a people management strategy can spot gaps in employee experience initiatives, increase retention and engagement, and ultimately, happier employees.

Harnessing the power of analytics is key. In the same way marketing professionals have leveraged data to measure effectiveness of consumer engagement strategies, HR can identify employee experience gaps—the difference between the experience an organization believes it’s delivering and the actual experience delivered—to take quick action.

Work doesn’t work like it once did.
Win, retain, and grow talent in a changing, competitive landscape. Real-life proof points →HERE.

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