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Major factors impacting Employee Engagement
The workplace and the ways in which we work are changing at a rapid rate. The rise of digitisation and automation, increased access to information, and the globalisation of markets are among the trends challenging traditional approaches to work, company cultures, management and jobs. Extensive research in employee engagement shows a positive correlation between employee engagement, productivity, retention and profitability. Tactics to engage are often intermittent and companies need to look at how they engage employees in a more holistic and consistent way; through the Employee Experience (EX). Here we explore the major factors impacting employee engagement, productivity, what EX is and why it’s a crucial driving force for better brand advocacy and customer service.
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The lines between employees and technology are blurring with developments in Artificial Intelligence (AI) and a changing workforce in this cognitive age. For businesses to embrace this shift they will need to bring the Employee Experience (EX) into focus instead of solely focusing on customer satisfaction and reliance on engagement metrics.
Organisations everywhere are looking for strategies to stay competitive, relevant and grow — by simply doing what they’ve always done, in relation to employee engagement, is likely to prove unsuccessful in the long term.
Today millennials and Gen Zers, in many sectors, make up the majority of the workforce. For these workers the 9-to-5 workday is a thing of the past, and today’s millennials confess to being online and working almost constantly. They hold different work values and attitudes that have significant consequences for work culture and leadership.
In order to attract and retain millennials and Gen Z, a holistic employee experience is required. A positive employee experience will result in a positive employer brand, a perception which is becoming just as important as the customer brand.
Rather than diminishing the role of people, in the cognitive era people are at the forefront of working with and realising the benefits from new technologies to achieve more than was ever possible before. In fact, the cognitive era is just as much the human era. It is a time when work can be a more rewarding experience for employees.
The Growing Need for Employee Experience
Smart companies have become adept at finding ways to effectively tackle the customer experience; smarter companies are now learning how to master the employee experience.
Employee experience isn’t about any single thing, but rather it’s the culmination of countless experiences gleaned over time. Day-to-day employee experience tends to be in constant flux and therefore in need of constant care and attention. All of this makes it even more difficult to get a fix on the full meaning and significance of what is an ever-changing process.
What can be said is that the employee experience is ultimately about people, and while it can be characterised in countless ways, it’s made up of three basic elements:
An overall set of employee perceptions across time and touch points
A collection of environmental factors: cultural, technological and physical [derived from Jacob Morgan’s research]
A broadening of traditional HR functions that recognise the correlation between employee engagement and customer experience
By focusing on these three aspects, organisations can take significant steps toward actively designing and shaping compelling experiences for their employees.
We are all familiar with employee engagement and the difficulties of creating inclusive initiatives and internal communications around these. Most employee engagement initiatives though are focused intermittently and spike engagement for a short-lived period then dip again until the next engagement session. They seem to be short term fixes with short term strategy.
Technology also makes it easy to create an “employee survey” and call it an engagement program, which allows a company to fulfil an apparent organisational need with a “check box” approach. But metrics on their own don’t drive change or increase performance. Many of these survey-only tactics measure employee perceptions and provide metrics instead of improving workplaces and business outcomes. Though most approaches are well-intended, with an ultimate goal of improving the workplace and performance, too many contribute to a status quo that is not helping the business.
In Gallup’s latest research report, The State of the Global Workplace, organisations with low engagement scores experienced 18% lower productivity, 16% lower profitability, 37% lower job growth and 65% lower share price over time. Overall, just 10% of employed residents in Western Europe are engaged — that is, involved in and enthusiastic about their work. By adopting an employee-centered focus, this promotes improved business performance. Retention is also a key factor in maintaining a productive team – when employees are engaged; they grow with the business.
Businesses that orient performance management systems around basic human needs for psychological engagement, such as positive workplace relationships, frequent recognition, ongoing performance conversations and opportunities for personal development, get the most out of their employees. Strategies that allow individuals to identify, develop and use their natural talents so they become strengths have the potential to dramatically improve workforce productivity.
In many cases, making better use of employees’ strengths will require businesses to grant workers greater input and autonomy to use their strengths. This approach often requires a profound shift in management perspective, as traditional manager- employee power dynamics give way to more personalised relationships through which managers position their team members for maximum impact according to their individual strengths. The resulting sense of empowerment benefits both the employee and the organisation. Employees who strongly agree that their opinions count at work are more likely to feel personally invested in their job. Higher levels of autonomy also promote the development and implementation of new ideas as employees feel empowered to pursue entrepreneurial goals that benefit the organisation — that is, to be “intrapreneurs”.
Jacob Morgan, a prolific author on Employee Engagement, explains organisations need to look for long term impact by redesigning the experience to create a place where employees want, not just need to work. Jacob’s extensive research has been through interviews with inter-disciplinary specialists in psychologists, innovators, economists, HR experts across sectors including tech, startups, retail, manufacturing, education and professional services. As a result, he has created the world’s first Employee Experience Index. From this research, he has identified three environments that matter most to employees: cultural, technological, and physical.
From his analysis of ‘best of’ companies in America, those that invested most heavily in employee experience were included 28 times as often among Fast Company’s Most Innovative Companies, 11.5 times as often in Glassdoor’s Best Places to Work, 2.1 times as often in Forbes’s list of the World’s Most Innovative Companies, 4.4 times as often in LinkedIn’s list of North America’s Most In-Demand Employers, and twice as often in the American Customer Satisfaction Index. Compared with other companies, the experiential organisations had more than four times the average profit and more than two times the average revenue. They were also almost 25% smaller, which suggests higher levels of productivity and innovation.
The ROI of investing in employee experience is significant and translates into higher productivity, profit and revenue per employee, stock price performance, and much more.
So what is the ideal employee experience at work?
1. An Overall Set of Employee Perceptions
What is certain is that the employee experience, however you personally define it on any given day, impacts the way you think about the work you do and the people for whom you do it. EX is therefore a matter of crucial importance, not only for your personal and professional wellbeing, but for the wellbeing of your organisation.
Measuring employee engagement isn’t the same as improving it. Although employee experience and employee engagement are inextricably linked, it is becoming abundantly clear that companies focused on engagement alone haven’t been doing enough to understand the factors motivating it, employee experience chief among them.
Successful EX design focuses on HR products and services that strengthen the emotional connections people have to their work. While such designs are often co-created so as to produce mutually desired results across multiple touch points, “there’s no magic formula” according to Sir Richard Branson. In a 2010 interview with HR Magazine, the renowned entrepreneur remarked, “The key is just to treat your staff how you would like to be treated”. Think of it as the Golden Rule for creating an exceptional employee experience.
2. A Collection of Environmental Factors: Cultural, Technological, and Physical
Culture can be defined by the way an employee “feels” at work in relation to what’s expected of them on a day-to-day basis. It’s the aura given off by a company’s structure, hierarchy, and leadership, and it takes into consideration traditional work factors like compensation and benefits. For years, culture was thought to be the sole aspect of an employee’s experience: the belief was that if an employee showed up and did satisfactory work, he or she would in return be happy to receive a living wage and paid vacation each year. Needless to say, this one-dimensional, old-fashioned approach is no longer valid as employee values have shifted over time. The days of focusing solely on culture are over. Even in this day and age, the definition of culture is shifting too to embody shared values, behaviours and attitudes in more dynamic ways.
Airbnb’s mission is to create a world where you can belong anywhere, and they believe that central to achieving this mission is creating memorable workplace experiences across the entire employee life-cycle, which is why they made the move to set up an employee experience function. They believe this is different to the more traditional HR set up, in that the focus is much broader. This wider scope includes the office environment, facilities, food, and CSR. In addition, it includes a group of employees that they call “ground control”, who are tasked to help bring their culture to life via a range of activities such as internal communications, events, celebrations, and recognition.
The technological environment is all about the tools an employee needs to do their job. Advancements in digital technology have greatly changed the ways that people work, and as technology continues to make exponential advancements (in Artificial Intelligence, Virtual Reality, 5G mobile technology), it will continue to influence industry in profound ways. More and more employees are enabled to work remotely and flexibly; but no matter the setting, organisations are expected to provide the best tools available in order for their employees to do their jobs. That includes finding new and better ways to facilitate communication and collaboration, collect and share feedback, and—perhaps most importantly—make data actionable. In an interview with The Drum, Chris Patton (UK & Ireland head of marketing for Fujitsu) said that businesses are using more innovative tools to enhance their employee’s experiences, the same way we see technology improving the customer experience.
The physical environment is everything you can see, hear, smell, touch, or taste in the working space environment. These factors, which include temperature, air quality, and office lighting, all affect employee concentration and directly influence the wellbeing, performance, and productivity of your teams. Workers who are satisfied with their physical surroundings are simply more likely to do better work. The physical environment is thus of crucial importance, especially for desk-bound employees who spend long hours inside their organisations. Those in charge of designing physical spaces need to make certain that they offer a motivational atmosphere that promotes creativity and productivity.
Efforts that foster engagement through technology need to be made so that remote workers can do the same with their virtual surroundings, encouraging a culture of inclusiveness that makes information and discussions open to everyone, no matter where they are.
WeWork is a global network of workspaces designed for collaboration and community, that describes itself as a “movement toward humanising work”. It’s chief product officer, Shiva Rajaraman, describes how they are developing products that are “delivering against how people will work in the future”. This means thinking about how technology can make workspaces more responsive and “liquid” to people’s needs. For example, it has taken the concept of ‘checking in’ to your work environment to create products such as a chair that ‘remembers’ the height someone likes to sit at, or a desk that will adjust to whether the user prefers to be sitting or standing. They also utilise sensors to analyse corporate spaces and detect the way in which their people are using the space. This in turn can inform how “managers structure teams, as well as things like how they use space to help strengthen company culture.” For Shiva, “once you can measure it you can optimise it”.
3. A Broadening of Traditional HR Functions
It has long been understood that creating a positive customer experience (CX) is pivotal to the success of a business. As a result, marketing teams have become more and more adept at creating compelling customer experiences. But there is a counterintuitive concept behind this line of thinking: successful customer experiences depend upon putting your employees first, not your customers.
Employees are on the front lines of brand representation, and organisations are finally realising that the same focused attention aimed at developing customer relations should be shown to their workforces. It’s something of a cliché that corporate leaders refer to their employees as being their most valuable asset; but despite the sloganeering, many continue to focus on approaches that send the opposite message to employees. The customer, it seems, is not always right, and businesses that act on this realisation by actively putting their employees first, consistently see that it ultimately leads to better customer service.
Leading organisations in the EX movement are now aiming to provide their people with positive touch points at all stages of the employee life cycle. This transformation is part of an idea that has been described as “the consumerisation of HR”, and it encompasses how companies are beginning to apply a consumer and digital lens to their HR functions through the creation of social, mobile, and consumer-like employee experiences.
How agencies are adopting and realising EX?
Netflix set the bar when Patty McCord created their definitive Freedom & Responsibility Culture slide deck a few years back. Over 124 slides, the comprehensive deck covers their nine values and the seven aspects of their culture, one of them being “Courage”, where they want their employees to embrace change and risk-taking for an adaptable culture. Their core company values empower their employees to transform the company and have impact, whilst embodying purpose.
Adobe is one such company at the forefront of this type of employee-first strategising. In 2016, they created a Customer and Employee Experience department. The press release announcing this move is an excellent summary of the ideas that prompted it:
“Researchers such as Gallup have proven the correlation between higher employee engagement and positive customer ratings. Realizing this critical connection, we at Adobe have combined two previously disconnected parts of the company into one new entity. Our new Customer and Employee Experience organization combines our customer experience organization—the people who are on the front lines of helping our customers utilize our products—with our human resources and facilities organization, the team that was focused on our people and their workplace environment. We believe we’re one of the first companies, at least in the technology industry, to combine these functions. The unified focus of this organization is the people that are essential to our business, our customers and employees, and the understanding that people want the same fundamental things:
To be treated with respect for their needs and their time
To find the information they need quickly
To feel invested in a long-term relationship, whether it’s with the employer or the brand
Taking this kind of active HR management approach to employee experience design—one that reaches across hierarchies and departments—is an effective means for bringing a company’s brand to life. An ideally designed EX will mirror a company’s unique brand attributes.”
Employees who have established an emotional connection with their companies will be far more likely to inspire positive customer experiences.
Other companies that are challenging the status quo include LinkedIn and Accenture, who both host HR hackathons, where employees help deconstruct and rebuild the People and HR functions to reflect the work that they really do (and need to do). Airbnb treats its physical space like software: the company is constantly experimenting with different layouts and floor plans, and employees get to volunteer to design and build their conference rooms, with a modest budget. The employee experience is a positive and powerful – and ultimately human – experience, in which employees are able to invest more of their whole selves into the workplace and essentially personalise their experience.
EX leads to better Employee Engagement
Looking at the data, it’s clear that there is a significant return for organisations that focus on employee experience over the long term, not just engagement in the here and now. The bottom line is that a well-considered and wisely implemented strategy in regard to EX—one that takes into consideration employee perceptions, environmental factors in the workplace, and a consumer-style approach to HR—is certain to lead to greater levels of employee engagement, enthusiasm, involvement, retention, and employer brand loyalty.
Through a holistic approach to EX; ensuring your employees feel part of a team with shared values and engaged in purpose, employees will be engaged and involved. Tailoring employee experiences around physical engagement breaks down the barriers between management and teams. Through our unique insights, we help brands create personalised experiences that communicate and engage with their audiences. The power of live and on-line experiences are impactful ways to make employees active participants and advocates in your organisation.
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