Keeping employees happy is high on HR leaders’ priority lists, and rightly so. More than 3.8 million people — 2.4% of the workforce — quit their jobs in June 2022. Each of those employees left behind a business that relied on their work.
The higher the turnover, the greater the impact on a business’s bottom line. New data show replacing an employee costs an average of $4,700. The overall effects of understaffing can bring that number much higher, sometimes up to four times the employee’s salary.
Even without understaffing, the employee experience affects business performance. Team members’ relationships with their jobs affect everything about how they work. This, in turn, affects the company’s overall output. When a company improves its employee experience, it can reach new levels of success and innovation.
What Is the Employee Experience?
The employee experience is a team member’s overall experience of their job and employer. It incorporates everything they think, feel, and notice about their working life, from onboarding to departure.
Each team member will have a different employee experience, including those who share a job title and direct supervisor. One person might love that the team gets along well. While another feels left out and perceives their coworkers as cliquish.
Teams and organizations also have collective employee experiences. An overall perception exists of how a company’s employees view their workplace, and that perception offers insight into what works and what doesn’t.
Why the Employee Experience Matters
The employee experience affects more than just whether employees will stay or go. A better employee experience means a higher quality of work, more innovation, and ultimately more success for the business.
More Engaged Employees
The quality of an employee’s experience affects their engagement. According to a McKinsey & Company study, team members with positive employee experiences are 16 times as engaged as those with negative experiences.
More engagement translates to higher company earnings and faster growth. Gallup research shows that the most engaged employees drive 18% more sales, 81% better attendance, and 41% better work quality than their least engaged counterparts.
The connection has to do with energy. Engaged employees dedicate more mental energy to their professional lives and employers, making them more likely to have innovative ideas. A company with more thoughtful and engaged employees can move forward faster.
Higher Retention Levels
A more robust employee experience encourages top talent to stay. Compensation helps, but data show that people leave their jobs for reasons related to their overall experiences — toxic culture, work-life balance, and flexible policies. By creating a better experience, employers can increase the likelihood that their best people will stick around.
Stronger Organizational Performance
According to the McKinsey report cited earlier, employees put forth approximately 40% more effort when their employer focuses on the employee experience. This makes them more likely to exceed performance expectations.
Individual performance improvements add up quickly. In a study published in the Harvard Business Review, a significant boost in employee experience directly affected company profits. When a team moved from the bottom to the top 25% across all employee experience dimensions, they generated more than 50% in additional revenue. That translated to 45% higher profits per person-hour.
What Makes a Good Employee Experience?
Each employee values different aspects of their employer, depending on their goals and life circumstances. However, certain significant aspects of work tend to carry more weight given their impact on employee lifestyle. Employers looking to improve the employee experience should begin with these dimensions.
Interpersonal and Social Interactions
Work is a social experience. Working-age adults spend more time with coworkers than with friends or family members who aren’t their children. And the quality of those interactions impacts the quality of the employee experience.
Social capital — more positive relationships, stronger community, and more satisfying social interactions at work — correlates directly with job satisfaction and success. Employees who report better social experiences at work are typically more likely to feel engaged and report high levels of wellbeing.
Employees with high social capital also give themselves higher job performance ratings. Prior research shows that they don’t only feel more successful; they are more successful. Organizations perform better financially when their employees have better social experiences.
Employees feel more positive about their work experience when their employer empowers them to learn and grow. In a 2022 survey, 68% of workers said that employer-sponsored upskilling would inspire them to stay with their organizations throughout their careers.
More than half of respondents expressed a need to expand their skills within the next year. But 29% didn’t feel optimistic about the opportunities available. This kind of disappointment affects an employee’s perception of and relationship with their job and employer.
Conversely, when employees have opportunities to learn and grow professionally, they have better employee experiences overall. They appreciate having an employer that values them and may put forth additional effort in return. This extra effort pays off in improved performance and a desire to excel.
Workforce development also has a direct effect on a company’s potential. Employees stay updated with industry best practices, giving the organization a competitive edge.
Scope of Work
Every position has a scope of work — an agreement between an employee and a company that establishes expectations. Employees perform best and feel most confident when they understand what’s expected of them.
When leaders expect their employees to perform well, team members adjust their self-expectations accordingly. Employees rise to the occasion and achieve higher standards.
The process also reinforces the connections between employees, their managers, and the company. The leader becomes a stronger role model, empowering employees to see themselves as high-achieving team members. They feel more confident in their role, and the entire employee experience improves.
Meaning and Purpose
The culture of work has shifted dramatically since the COVID-19 pandemic. The clear separation between life and a job has blurred, and people expect to bring their whole selves to work. They also expect their jobs to provide a meaningful and purpose-driven experience.
According to Gartner’s research, today’s employees live self-reflective lives. They continuously ask themselves whether their jobs value who they are and involve them in meaningful actions.
When employers encourage a sense of purpose, employees feel more connected and have a more positive experience at work. If employees believe their workplace sees them as simply a pathway to revenue, they’re more likely to disengage and have a negative employee experience.
Compensation and Benefits
Employee compensation looms large in a challenging economic climate. A 2022 study revealed that covering monthly expenses is workers’ top concern, up from the number-nine spot in 2021. Retirement readiness climbed from fifth to second place, and personal debt is now in the top 10.
Only 61% of survey respondents feel they’re compensated fairly, while 64% believe they receive competitive benefits. Both numbers were higher in 2021.
When employees are dissatisfied with their compensation, their relationships with their jobs and employers suffer — often to the point of attrition. Low salary is the second most common reason people quit their jobs, just behind a toxic company culture. Poor benefits and limited time off also made the top 10.
To improve the employee experience, companies must evaluate whether teams are satisfied with their compensation, including benefits.
Technology and Environment
Employees also have a better experience when they have the tools to do their job. A 2021 Salesforce survey showed that employees who are dissatisfied with work technology are half as likely to feel happy with their work. They’re also twice as likely to be burned out. Yet, according to the Harvard Business Review, only 30% of employees feel their workplace technology meets their expectations.
Technology is a key aspect of the physical work environment. Whether employees work at home, in the office, or both, their tech and non-tech surroundings impact their feelings about the experience.
As technology facilitates or impairs an employee’s ability to work, so do elements such as desk and space layout, lighting and sounds, and physical reminders of accomplishments. Employees feel more positive about work if they feel at ease and ready to do their best work.
Improve Your Employee Experience With Resourcing Edge
The employee experience incorporates every aspect of work and the workplace. All of it matters, from the quality of onboarding and training to the ease of signing up for health benefits.
Strengthening the experience means looking at every interaction employees have with the organization and their workday. It means considering where the experience can improve and what steps will have the greatest effect.
Resourcing Edge can help. As an experienced developer of human capital management solutions developer, we’ve improved the employee experience for numerous companies, including Wells Fargo, Chase, MetLife, and United Healthcare.
We create convenient and employee-friendly solutions for every touchpoint: benefits enrollment and claims, paycheck direct deposit, performance review processes, and more. The goal is to create a workflow that works for everyone in the company, from executives to employees.
Take the first step toward an employee experience that brings the best people to your door and keeps them there. Check out our solutions and get your customized free quote today. Your people deserve it, and so do you.