Employee experience: Importance and business impact

Employee experience: Importance and business impact

Have you ever wondered how your company can capitalize on employee experience and improve its bottom line? Know its importance and how it can impact your business.

Alex Villarreal

August 2, 2021

August 31, 2021

In recent times we have been experiencing the shifting of the work environment into a kind of futuristic place. Organizations focus now more than ever on why employees should want to work versus the need to work. For many, many years, organizations focused on one side of the spectrum of employee experience: Culture.

According to Jacob Morgan, author of The Future of Work: Attract New Talent, Build Better Leaders, and Create a Competitive Organization, “how employees feel when they are inside of an organization, the vibe that they get, the organizational structure, leadership style, compensation and benefits, etc. While culture is a part of the employee experience, it is only a third.

There are two more sides to the story. We have to understand that the importance of employee experience also lies in technology and the physical environment. As technology develops, organizations have offered more effective and innovative ways to connect with their employees and colleagues. In this article, we are going to dig deeper into this topic, so brace yourself.

What is employee experience (EX)?

So, what is it? Employee experience is an emerging topic to be studied in different phases to understand and conceptualize. As the competition for talent in mobile workforces continues to grow, many organizations have realized the importance of creating a positive employee experience. However, measuring or evaluating the employee experience has proven difficult for most companies because they lack visibility into their real-time workforce data.

According to the Deloitte report in 2017, earlier research in the fields of HR&OB, Industrial relations, psychology, psychometric and statistical showed that the notion of employee experience is defined as ‘A set of perceptions that employees have about their experiences at work in response to their interactions with the organization’ (IBM and Globoforce, 2016, p. 3).

Without this perspective on how employees spend their emotional resources (or, to put it more colloquially: emotional economy), it is impossible to know what issues are causing pain points and employee burnout or whether employee engagement and employee experience strategies are leading to improved business outcomes.

Employee experience stages

Employee experience (often called employee engagement) is the employee's perception of their attitude and relationship with an employer. Employee experience has direct and indirect impacts on employees' perceptions of how they feel about their place of employment, their manager, and their team members and the overall quality of life at work.

Employee experience stages employee perceptions in their workplace, through eight stages:


Recruitment is a great way to increase your talent pool, strengthen your employer brand and attract the right professionals. How can we make sure that all candidates have a positive experience when recruiting?

Recruitment is a great way to increase your talent pool, strengthen your employer brand and attract the right professionals. How can we make sure that all candidates have a positive experience when recruiting?

This stage of the employee journey can be compared to lead generation in the consumer journey. Organizations must now invest in both online and offline recruiting.


Joining a new company offers people a rare opportunity to make a fresh start in a unique social setting. It provides individuals with an extraordinary opportunity to establish an identity with colleagues and to be seen as the person they are when they are at their authentic best.

A research paper made by Daniel M. Cable, Francesca Gino and Bradley R. Stats for the M.I.T. suggests that “the standard onboarding approach used by many organizations may not be the best way to bring someone new onboard in an organization. While our fieldwork informed our understanding of the socialization practices companies use and the problems they experience in terms of work engagement and turnover.”

The same research indicates that “the best way for organizations to advance this goal is for managers to encourage employees to use their signature strengths from the very beginning, on a daily basis.”

Training & Assessment

Training's purpose is to identify the performance requirements and the knowledge, skill, and abilities required by the agency's workforce in order to achieve them. The best training will allow you to direct your resources towards the areas most in demand.

On the other hand, assessing your employees is a task that requires a delicate balance between criticism with recognition, and setting realistic goals.

As a company, looking towards the future is a tricky job to handle, however, if executed well with constructive feedback, it will motivate employees to perform better.

Just be consistent with what you are doing and abolish the idea of being biased.

Employee engagement

First, we have to be clear that when organizations think about how they interact with and approach their employees, some confusion between employee experience and engagement emerges.

Brad Denny, principal at Deloitte Consulting and co-author of “From Employee Experience to Human Experience,” explains to Forbes that “Employee engagement was very top-down, the organization deciding what employees needed. Employee experience, by contrast, brings employees into the conversation to look at the work itself, finding out what employees need to do their work, to make them successful.” 

There are four critical elements to engagement:

  1. Enablement: providing the tools to get the job done
  2. Energy: physical, mental, emotional, and spiritual
  3. Empowerment: the transfer of power from manager to employee
  4. Encouragement: a word, a bit of recognition, a gesture of appreciation, or a display of gratitude

Multi-rater assessments

Multi-rater assessments offer individuals and organizations a unique opportunity for enhanced feedback. To capitalize on the opportunity, the organization must clearly define the objectives, train the raters, and design a process that encourages open discussion.

At Erudit we offer a multi-rate platform that keeps up to date with the activity of your company in an integrated model including the employee, manager, co-workers, staff members, and sometimes customers. The idea being that these individuals will provide insights and their collective comments will provide greater feedback for the recipient.

Surveys [CTA Erudit AI]

Throughout the workplace research conducted by Gallup researchers, both qualitative and quantitative data have indicated the importance of the supervisor or the manager and their influence over the engagement level of employees and their satisfaction with their company. 

Here at Erudit, we believe It is a useful review in the retention stage of the employee life cycle since it allows us to identify how involved and committed the senior staff feel with their work. Greater employee engagement has a positive effect on the entire business:

  • Higher performance:  Studies show that commitment to the business unit can help improve customer experience, productivity, and financial indicators.
  • Less attrition: Engaged employees are 87% less likely to leave the organization, avoiding the costs of hiring new staff, giving them all the training they need, and waiting for them to reach peak productivity.
  • Higher Revenues: As published by Bain & Company, companies with highly engaged employees had 2.5 times more revenue increases than those with low levels of engagement.
  • Better customer experience: 70% of engaged employees say they understand how to meet customer needs; instead, only 17% of unengaged employees say the same.

Internal surveys

Items measuring aspects of the supervisor's environment can directly influence most of the variance in lengthier job satisfaction surveys and longer employee opinion surveys.

Organizations should conduct surveys of employees on a regular basis. Regular feedback shows employees that the company cares about how they perceive their work environment.

Exit surveys

We know that your company is fantastic, but no matter how excellent your culture is, people will eventually leave, and asking them to complete a survey asking them to complete an exit survey as part of the offboarding process is essential. 

Exit surveys are designed to help employers build more attractive and fruitful work cultures, so employees stay longer and feel more engaged. Set up some time to give employees who are leaving our expert-certified employee exit surveys and find out what you're doing right and where you might need more improvement.

Employee experience journey

According to digital HR tech, an employee journey is “the time an employee spends at a company, starting when the employee applies to the organization and ending when the employee quits the organization.” And the time between those two moments is what creates the employee experience

Employee experience journey mapping is a methodology that helps organizations get employee feedback and employee ideas to improve employee engagement.

Employee journey maps are used to assess the employee experience from the employee's point of view, what they need to do their jobs well and how management can help them have an even better work-life.

Digital employee experience: Why is it important? Millennials, Gen Z

It's not just about workplace technology, and it's about the employee experience. Workplace technology is an essential part of the technical aspects required for employee experience. But it is only one part of employee experience and employee engagement that matters to organizations.

According to Gallup, Gen Z and millennials now make up nearly half (46%) of the full-time workforce in the U.S. In 2018, Gallup asked Gen Z and millennials what they look for most in an employer, and their answers could be summed up into 4 themes:

  1. Above all, “Gen Z and millennials want an employer who cares about their wellbeing. The year 2020 brought employee wellbeing into the foreground. If the people in your organization aren't healthy both physically and emotionally, your organization isn't healthy either”.
  2. Gen Z and millennials want their leaders to be ethical. Older generations may associate ethical behavior with personal character. Younger generations are concerned with people and the planet.
  3. Older millennials want open, transparent leaders. Millennials in their 30s may have more of a "trust but verify" approach to corporate positivity. If you have many millennials in your organization, they may want more facts, data and third-party validation to feel confident in your leadership.
  4. Gen Z and younger millennials want leaders who support a diverse and inclusive workplace. In other words, younger generations wish for environmental, social and governance (ESG).

Benefits for the organization

As Covid-19 ripples across the globe, Future Workplace has uncovered that the focus on employee experience is increasing among HR and Business Leaders.

A survey Forbes conducted titled, The 2020 HR Sentiment Survey, revealed that Employee Experience ranked first with 50% of respondents, and this was followed by a greater focus on using technology and artificial intelligence to automate routine tasks, performance management, and people analytics at 41%, 35% and 32% respectively. Employee satisfaction has improved by 20% and manager satisfaction by 30%.

Talent retention

Something important is that companies are made by people, even though there are technologies embedded in their internal processes. Therefore, it is natural to assume that if your company's team is made up of engaged people, aligned with the company's values and who perform well, the company will certainly grow.

The benefits of talent retention are:

  • Construction of a more pleasant working environment.
  • Guarantee of greater engagement.
  • Productivity increases.
  • Fluidity in decision making.
  • Helps in the company’s economy.
  • It guarantees the intellectual capital of the organization.

Company's belonging

To better understand this basic need to belong, BetterUp researched the role of belonging at work and the outsized consequences of its absence. Data showed that belonging is a close cousin to many related experiences: mattering, identification, and social connection.

The unifying thread across these themes is that they all revolve around the sense of being accepted and included by those around you. If workers feel like they belong, companies reap substantial bottom-line benefits. High belonging was linked to a whopping 56% increase in job performance, a 50% drop in turnover risk, and a 75% reduction in sick days. For a 10,000-person company, this would result in annual savings of more than $52M.

Employees with higher workplace belonging also showed a 167% increase in their employer promoter score (their willingness to recommend their company to others). They also received double the raises and 18 times more promotions.

Business impact of EX

Strengthening the employee experience has numerous benefits associated with employee job satisfaction leading to higher profits and better marketplace positioning. These include the following:

  • More engaged, productive employees. Disengaged employees can cost companies billions of dollars each year due to lower productivity and profitability and increased absences. In contrast, engaged employees are more productive and bring other advantages such as improved retention rates and workplace safety.
  • Lower absenteeism rates. Unhappy employees are more likely to be absent from the workplace, negatively affecting morale, productivity and finances. Happy employees have lower rates of absenteeism.
  • Increased quality of work. According to research from Harvard University psychologist and happiness expert Shawn Achor and others, happiness levels influence job success more than IQ or skill set. For example, a "happy" brain sees more possibilities and is more creative.
  • Improved customer relations. The employee experience affects all areas of the business, including the customer experience. Indeed, many industry experts believe CX is a direct result of EX. Happy employees are more likely to convey better moods and emotions while interacting with customers. They also tend to exhibit more dedication to and understanding of products and services, enabling them to give better support to customers.

How to know when to improve your EX?

Based on Josh Bersin’s approach, “the importance of employee health and wellbeing is more important than ever before.” Due to the current pandemic, many employees are experiencing higher stress levels, while organizations are doing everything in their power to keep their people healthy and safe. 

  • Make work more meaningful:  Organizations must understand the drivers among their people and make work more significant to them. Furthermore, it is crucial to communicate about the organization's corporate and social responsibility initiatives. 
  • Encourage and drive good employee-manager relationships: Managers account for over 70% of the variance in employee engagement. To motivate their people, managers need to give clear directions and goals, communicate frequently and openly to build trust, provide on-the-spot feedback, and actively listen to employees and act based on results.

Useful tips when designing an employee experience strategy

The scope of the employee experience has transcended the boundaries of HR and is now a company-wide initiative to create wellbeing, productivity, engagement and growth. Business leaders now have to think about all the experiences that impact their employees, not just in the workplace. Here are some useful tips when designing an employee experience strategy

  • Create and sustain inspiring workplace culture and environment: Many employees struggle to stay motivated and balance their private and professional lives. Luckily there are many different software solutions offered on Erudit AI that can assist organizations in improving their virtual working environments and keep their employees motivated, inspired, and connected.
  • Offer opportunities to learn and grow: Even though compensation and benefits are still the leading motivators for employees, they are just a short-term employee engagement and retention strategy. In other words, employees want different types of benefits related to their career growth and development.
  • Improve internal and leadership communications efforts: Internal communications has become an essential strategic business function nowadays. Keeping employees informed and up-to-date with the latest rules, regulations, processes, and procedures is crucial for keeping employees safe and healthy and motivated and productive. 
  • Invest in employee health and wellbeing: As mentioned earlier, employee safety, mental and physical wellbeing have become priorities for companies worldwide. Moreover, this is now considered one of the essential pillars of employee experience in the workplace. 

Want to know more about how to improve the employee experience in your company? Erudit AI can be the answer. Contact us!