Seven Proven Reasons HR Leaders Must Invest in Employee Experience

Seven Proven Reasons HR Leaders Must Invest in Employee Experience

Business magnate Richard Branson famously said, “If you take care of your employees, they will take care of the clients.” Taking care of employees isn’t a sudden change in policies, nor is it about making everything warm at work. Instead, it improves the overall employee experience, making a difference in how they feel at the workplace months, even years after onboarding.

This post addresses the critical factor of creating an excellent employee experience and lays out seven ways to achieve that.

What is Employee Experience?

Employee experience (EX) is employees’ perception of their journey in the organisation across all touchpoints — onboarding till exit.

It includes three aspects:

  1. Technical – Were the tools and technical processes employee-friendly?
  2. Culture – Did the employee like the company’s work culture? Did they connect to the company’s vision and policies?
  3. Workplace – Was the work environment comfortable? Did the workplace have all necessities?

How is Employee Experience Different from Engagement?

Employee experience is often confused with engagement, but they are different. Engagement focuses on bringing changes that make employees enthusiastic about work. But employee experience is the overall vision behind engagement. 

Why Invest in Employee Experience?


Employee experience adds significant value to a Company’s growth. But, unfortunately, as companies deal with multiple priorities, it sometimes takes a backseat. A positive employee experience attracts better talent, increases productivity, and boosts sales. And these aren’t assumptions. Research proves it. Numbers show a massive contribution of EX to overall profitability and demonstrate why it is worth prioritising. So let’s dig into it.

1. Reduces Employee Turnover

Employee turnover is the number of employees that leave the organisation in a specific period. Turnover affects a company’s profitability. More people leaving the organisation means more hiring. The hiring process comes with recruitment and training costs.

New employees go through a learning curve before getting fully productive. Also, the productivity of existing staff gets affected, as they would spend more time taking interviews or conducting training. As a result, overall employee turnover costs a huge amount to the company.

Companies investing in employee experience and working towards improving work satisfaction have less turnover. However, a study by IBM shows 44 % of employees intend to leave organisations with poor EX.

A leading hotel chain Hyatt continuously invests in training staff. They encourage employees to find creative ways to solve problems. As a result, on average, employee tenure in Hyatt is above 12 years. They are doing it right, and retention numbers prove it.

2. Better Customer Experience

While leadership takes continuous efforts to improve the customer experience, it is essential to note that employee experience and customer experience are closely linked.  For example, you often go back to the same shop where the shopkeeper smiles and greets you well. These common human traits also run the overall business world. Likewise, customers like to deal with businesses where the staff is welcoming and cheerful.

Good customer experience gets you loyal customers, which are the backbone of any business. Happy employees take pride in representing their company. And they also go the extra mile for customers. For customers, employees are their primary touchpoint.

An excellent example of how happy employees create happy customers is Starbucks. Starbucks continuously takes the initiative to empower its employees. For example, they provide health benefits, stock options, support education, and high-end training. These efforts are visible in top-notch service in Starbucks cafes. As a result, employees take pride in representing Starbucks.

3. Increases Profit

Research By MIT shows companies with high employee experience are 25 % more profitable. Better EX affects the company’s profit in multiple ways. Let’s see how:

  • Happy employees -> Increased productivity -> Increased revenue
  • Happy employees -> Good customer experience -> Increased revenue
  • Happy employees -> Less employee turnover-> Decreased expenses

Increased revenue and decreased expenses indicate the overall profit increases. Gallup reports also show engaged employees boost sales by 20% for the company. 

A real-world example is Wegmans, a popular grocery chain in the U.S., which spent 50 million dollars per year on the development of employees. As a result, their annual revenue shot up to 9.2 billion from 7.9 billion.

4. Improves Productivity

Happy employees take up challenging work, collaborate well with the team, and are 122% more productive. The higher the productivity, the lower is the operating cost. In addition, they create the right atmosphere at work for the entire team. Happiness is infectious, so coworkers also enjoy working with them.

When an employee feels a sense of belongingness at work, they put their best foot forward. Salesforce also reports employees who felt more belongingness at work were 5.3 times more likely to perform their best work. 

In another study on happiness and productivity, participants were divided into groups – A and B. Group A got happiness shots like short comedy clips or snacks. Group B continued work as usual. Can you guess the result? Group A was more productive than B. It proved a positive state of mind has a direct impact on productivity.

5. Increase in Innovation

With digital advancements, customers are upgrading to the least time-consuming or most accessible options continuously. For example, grocery delivery initially started with a one-day turnaround time, and now it is reduced to less than sixty-minute delivery. Therefore, companies need employees who can develop innovative ideas and think about creating unique changes.

MIT research shows companies having high employee experience are twice more innovative as others. Employees who are happier and connected to the company’s vision look for creative ways to improve. They think long-term (stay long-term) and are an asset to the company.

Google encourages employees to work how they like. They promote flexible work hours and having fun at work. Offices have dedicated spaces for playing video games, taking naps, or even playing ping pong. They strongly believe happier employees are more creative. That also shows in the company’s stature of work.

6. Eases Recruitment

A survey By American Psychological Association shows that employees working in companies investing in employee well-being are more likely to recommend the workplace to others. Candidates look for more than pay nowadays. They check for reviews on culture, connect with previous employees to get feedback. Excellent reviews mean more likely candidates will not turn down the offer.

Millennials and GenZ also change jobs more often. So, if onboarding wasn’t smooth, or they did not connect with company culture. Then, they can leave, even within three months.

A study also shows how employee experience helps in hiring:

  • Positive word of mouth and online reviews builds a reputation.
  • The overall interview experience and smooth technical process in the interview create a positive impact.
  • If the work culture is good, existing employees also refer their colleagues and friends.

 7. Builds Reputation

Branding is non-negotiable in today’s age. For example:

  • A social media post where an employee talks about their recent team outing. 
  • The company got featured in Best places to work. 
  • Or something as simple as an employee discussing their company culture with friends. 

Every bit adds to an overall brand image and makes them a reputable employer.

Even customers today are very responsible. Imagine going to a restaurant and seeing the manager shouting at the staff. Chances are, you will never return there. The same example applies to any company with a bad reputation. One social media post criticising company culture brings the entire company into scrutiny. It will not only repel talent but customers as well.

Having a brand reputation also reduces recruitment costs. For example, if a candidate has offers from two employers, they will choose the one with a higher reputation. However, a study also shows companies with a bad reputation have to pay at least 10 % extra to attract talent. 

Ways to Improve Employee Experience

By now, it is clear how essential nailing employee experience is. These are some tried and tested ways to improve employee experience:

1. Invest in Technology

A simple process of submitting documents that earlier meant sending a courier or meeting HR in person is now a simple scan and upload. So, automating or upgrading existing processes reduces the back and forth, making work smooth for staff.

2. Promote Communication

Waiting a year for having an annual feedback session with employees is an obsolete method. Instead, there should be frequent one-to-one meetings with managers or group discussions with HR where employees can bring up their points.

Many IT companies are also building Yammer portals– an internal communication platform. It acts as social media only for the company’s employees. Trainee to leadership, anyone can post or comment or indulge in conversations with each other. It brings everyone to the same platform. We need such healthy communication practices for the long run.

For instance, ICICI bank discarded cabins to initiate more openness in conversations. So, employees across grades now sit on the same level and work together as a team.

3. Recognise Good Talent

Many companies are switching to a half-yearly year appraisal cycle than annually. Because a lot can happen in a year, they want to ensure their employees are continuously engaged and rewarded. So, it is an excellent strategy to retain talent.

Apart from the appraisal cycle, giving a quarterly or monthly award is another way to acknowledge good work. Employees who feel their work is getting noticed are more likely to perform better. Also, they are less likely to leave the organisation.

4. Improve the Working Conditions

Working conditions include the physical workspace, team bonding, stress levels, and overall work-life balance. A comfortable seating space with good light is a fundamental prerequisite. An added perk could be like a foosball in the cafeteria, Table tennis lounge, or a weekly one-hour game session. Who minds having a bit of fun at work?

5. Invest in Employee Wellness

Healthy Employees are happy employees. Invest in Employee wellness by promoting work-life balance and also understanding mental health. A few ways to encourage employee wellness are:

  • Dedicated mental health programs
  • Annual checkups
  • Counselling sessions
  • Supporting healthy food
  • Partnering with wellness brands and conducting fitness programs

6. Take Feedback

Conducting surveys, having one-to-one meetings, and ground visits are good ways to take employee feedback. First, let employees tell what they wish to be improved. Then, easily prioritise the ones with high reporting numbers.

It Begins At Home

Excellent customer experience, revenue increase, or brand-building undoubtedly starts with investing in employees first. Employee experience gives organisations a competitive advantage. It is a key to attracting talent, reducing attrition, and building a brand.

That’s all from our side. How do you think employee experience helps in company growth? Let us know in the comments.

At All Things Talent, our experienced editorial team churns out valuable resources and relevant insights on HR Challenges, Recruitment Trends, Talent Retention, Talent Management, Simplifying Hiring Processes, HR Industry Trends, Hiring Practices, and more.


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