Positive Employee Experiences Boost Bottom Line

There’s a strong link between employee experience and an organization’s financial outcomes.
By: | August 20, 2018 • 3 min read
positive employee experience

A new report published by IBM and Globoforce titled The Financial Impact of a Positive Employee Experience confirms what most HR professionals have known for years—that there’s a strong link between employee experience and an organization’s financial outcomes.

The study included several hundred organizations and more than 22,000 workers across 45 countries and territories. Among its key findings is that organizations scoring in the top 25 percent on employee experience report nearly three times the return on assets and double the return on sales compared to organizations in the bottom quartile.

Only 22 percent of respondents stated that their organization does “enough to provide opportunities to recharge” while 49 percent say there is “sufficient recognition of the good work that employees do.”

Likewise, the research identifies six levers that help drive a positive employee experience: meaningful work; empowerment and voice; feedback, recognition and growth; coworker relationships; organizational trust; and work/life balance.

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“Meaningful work is consistently the most important driver of a positive work experience,” says Sheri Feinzig, director of both IBM’s talent-management solutions consulting and its Smarter Workforce Institute.

Both employee engagement and employee experience are important, she says, adding that one does not replace the other.

“When you have a positive experience and a highly engaged workforce, that’s when you get the best outcome,” says Feinzig, explaining that engagement relates to how employees feel about their organization while experience focuses on their day-to-day work tasks. “This poses tremendous opportunities for HR to have a bottom-line impact on organizational success. HR is in the driver’s seat to make these things happen.”

But to do so, HR needs to work with business leaders and managers to effect positive, measurable change involving the holistic employee experience, says David Mallon, vice president and analyst-at-large at Bersin.

“We’re talking about the all-in, day-to-day, lifecycle of an employee,” he says. “Find the moments that matter in those journeys . . . and how you can improve them through the eyes of workers.”

A first step for some organizations is tackling onboarding. It’s like using “training wheels”, Mallon says, because this workforce segment can quickly be identified, surveyed and teach HR what needs to be improved.

However, not all organizations target employees from the get-go or consistently solicit their feedback, which is a big mistake. Instead of evaluating workplace practices on an organization-wide level, he says, some HR professionals are looking at their impact on individual teams and other workers on the ground and all the ways—big or small—they can be improved.

“The reason we’re taking [a look through] this holistic lens is because we bought into the notion that a happier, more well workforce equals happier customers and better financial outcomes,” Mallon says.

Still, not everyone agrees about the meaning of a positive employee experience. Is it the same for sales professionals and factory workers?

“The employee experience is different for different parts of the organization,” says Ken Oehler, global culture and engagement practice leader at Aon. “Think about what the employee experience is worth for different parts of the employee base.”

Approximately one-third of organizations responding to Aon surveys are experimenting with alternatives for annual employee-engagement surveys, such as conducting more frequent pulse surveys on expanded topics, he says. HR is also creating more touch points to engage in continuous dialogue with employees and accelerate measurement across core, life cycle events, such as selection processes.

Just as important, organizational leaders need to develop an agile mindset by better understanding the business link between what employees are seeing, thinking and doing.

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