The monetary value of the employee experience: Make measurable what makes you better!

Creating a good employee experience is essential for companies in an increasingly complex working world. According to studies, the majority of companies see the need to invest in the employee experience in-house, especially in the aftermath of the pandemic. At the same time, however, it is not clear to most of them how they can make the resulting added value for the business visible (and thus justifiable to skeptics within their own rows). This calls for new approaches that go beyond simply measuring employee satisfaction and engagement.

What might these approaches look like?

First, it is worth taking a self-critical look at the measures taken to improve the employee experience. After all, in order to be able to identify any measurable successes at all, the measures selected must actually resonate with employees. Companies should ask themselves:

• Am I really investing in my employees and their needs or in my subjective idea of a good working environment?
• Do I invest primarily in measures that reward the presence of employees (fancy office, company car, gym in the office,...) or at least equally in those that open up real freedom and empower employees to act independently and take responsibility?
• What factors actually influence the employee experience? What role do managers, colleagues, new tools and technologies play?

The first two points clearly point in the direction of a new management culture that focuses on employees and their individual wishes, needs, and abilities, and places the greatest possible emphasis on self-determination in the work context. Questions and listening instead of ordering, as well as communication at eye level, are central to this. However, this cultural transformation is not an end in itself, especially since it still meets with resistance in many organizations, á la "Do we really need this strong focus on people, when employees are doing a pretty good job as it is and the business is running smoothly?"

Here, one could object: "For the time being." Because demographic trends and the associated shortage of skilled workers will continue to shift the balance of power in the labor market in the coming years. In the next 13 years, when the baby boomers retire, Germany alone will lose 20 percent of its labor force potential. 18 million people are leaving the labor market, but only 11 million are joining. One in five employees will then be gone.

At the same time, more and more people are questioning their work (and their employer) and are ready to change when their wishes and reality no longer match.

But even aside from that, how can HR managers show that it's worth investing in the employee experience again and again?

1. Put employees on the same level as the company's customers! Satisfied "internal customers" bring satisfied external customers.

Companies that perceive employees as internal customers develop a new sense both for the importance of cultivating relationships internally and for the variety of different "touchpoints" that shape employees' everyday work and thus their attitude toward the company. Companies invest a lot of money every year in order to understand (potential) customers, to win them over with precisely tailored products and offers, and ultimately to retain them in the long term. This should also be the goal with regard to the company's own employees. After all, they are the crucial interface between the company's offering and those who are supposed to buy it, i.e., the external customers. If employees enjoy their work and can carry out their tasks on their own initiative and equipped with the best (digital) tools, this has a positive effect on their dealings with customers and thus on the company's business success.

2. Make a good employee experience not only about the engagement of the employees, but about the quality of the many experiences in their daily work.

To show the impact of a good Employee Experience on business success, its role within the value chain must become visible.

Value creation does not proceed linearly, but rather weaves a network in many directions. For example, when an employee from the customer support team tries to solve a customer problem using the company’s own CRM tool and communicates with his manager in parallel. Here, the quality of the employee experience results from the complex interplay of human, digital, and physical touchpoints:

1. As an employee, do I want to find the best solution because I feel comfortable in my work environment, have a great team, and share the company vision?
2. Does the CRM tool I use run smoothly, is it unstable, or do I have only limited access to information?
3. Am I getting support from my manager in solving the problem?

An everyday situation and already three factors that shape the employee experience – and therefore also the outcome of the conversation with the customer, which in turn influences the customer’s future attitude toward the company, and with that his or her willingness to buy again, recommend the company to friends and acquaintances (=potential candidates?), and so on. Employee Experience meets Value Chain.

If you want to measure the business impact of a good employee experience, you need a comprehensive understanding of the many large and small processes in the organization, both interpersonal and technical, and their impact on employees' everyday experience. This calls for new data that identifies these experience metrics and relates them to other employee data, such as those on self-assessment, performance, satisfaction, overtime, etc., in other words, classic "engagement data."

3. Create new realms of experience by people for people within the company.

The simpler corporate processes are, the more measurable they are and the easier positive developments of the company can be traced back to specific actions in the organization. Higher self-efficacy of each individual results in increased effectiveness of the company as a whole. Strengthening this self-efficacy should be the goal of HR and EX-leaders in companies. This requires open structures and opportunities for employees to network as they please, share knowledge, learn from and with each other, and assume responsibility. If these structures are supported and enabled by smart digital tools, every new experience that employees make in the digital space leaves a valuable data trail. Taken together, all experiences then form a kind of data-supported “employee experience footprint” of an organization – an important reference for corporate success and thus a strong basis for argumentation for people managers and HR managers who are committed to people-friendly work structures.

All that costs something. In the beginning, above all, old habits and thought patterns. In the next step, also money. But one thing is clear: There is no better investment than in your employees.