The Executive’s Guide to Employee Experience

Circle illustration of the various steps of employee experience, like hiring, promotion, recognition, etc.

The moment a candidate finds your job posting, the employee experience clock starts. The employee experience, including how employees interact with your company, can make or break an employee’s time with your company and create a ripple effect for hiring and retaining future talent. People matter. And in today’s competitive talent landscape, companies can’t afford not to prioritize employee experience.

Here’s everything you need to know about employee experience in 2023 and seven principles to create a top-tier strategy.

More Than a Trend: What Is Employee Experience?

Employee experience is more than just a business buzzword. In its most basic form, employee experience is an employee’s interactions with every aspect of a company, including its people, policies, technology, and culture. It isn’t a single event but rather the culmination of every interaction, big and small, an employee has throughout their entire lifecycle with a company, from recruitment to retirement.

Employee experience includes recognition and rewards, the connections employees have to their peers and organization, manager development, constructive performance management, employee insights, and more. It’s about treating employees like people who need to be cared for and nourished instead of considering them to be only money-making machines.

Forrester puts it this way: 'A great employee experience enables employees to focus on their most important work. Disruption has become the new norm, and empowering employees to grow and change is crucial for firms looking to be the disruptor, not the disrupted.'

By taking care of more than just an employee’s basic needs at work (technology, office space, etc.) and focusing on building empowering systems and programs, companies show that they value their employees as people and want them to bring their whole selves to work.

One of the biggest challenges for companies is that employee experience means different things to different people. That’s because employees have different priorities and preferences regarding what matters to them most at work, and leaders and executives have different areas of focus depending on their responsibilities.

When talking about what employee experience is, it’s also important to talk about what it isn’t. Many leaders think providing a great experience means offering free meals, on-site gyms, and letting people bring their pets to work. But perks don’t provide lasting empowerment and engagement for employees. If an employee doesn’t feel engaged or valued at work, no amount of free food will solve the problem. That’s not to say these things shouldn’t be offered, but the foundation of an employee experience strategy is the core workplace principles that shape what it’s like to work at your company.

The ROI of Employee Experience

Investing in programs that support and engage employees sounds nice, but it also sounds expensive in time and resources. However in today’s competitive marketplace, companies can’t afford to ignore employee experience.

Employees care about experience and will go out of their way—and often sacrifice pay—to have a great one. In fact, a study found that nine out of ten employees would sacrifice 23% of their future earnings (an average of $21,000 annually!) for work that is always meaningful.

Employee experience is especially important to millennials and members of Gen Z, who are quickly making up an overwhelming part of the workforce.

According to McKinsey researchers, 'Workers are hungry for trust, social cohesion, and purpose. They want to feel that their contributions are recognized and that their team is truly collaborative. They desire clear responsibilities and opportunities to learn and grow. And they want an appropriate physical and digital environment that gives them the flexibility to achieve that elusive work-life balance.'

Companies that prioritize employee experience have a competitive advantage when attracting and retaining great talent because people prioritize companies with strong cultures, work-life balance, and the tools and training to do their jobs well.

Employees with a positive employee experience are 60% more likely to stay in their organizations and 69% more likely to be high-performing employees. And research from McKinsey found that employees at companies that lead in employee experience are more inclined to surpass work expectations and have 40% higher discretionary effort.

And then there’s the ROI to the bottom line. When employees are engaged and empowered, they feel more connected and naturally put in their best effort. That leads to strong financial gains, improved innovation, and a better customer experience. So much so that companies who invest in great EX outperform the S&P 500 by 122%.

7 Employee Experience Principles

Understanding employee experience in theory is one thing, but what does it look like in practice? Here are seven crucial elements of employee experience:

1. Communications and Connections

No matter their title or position, every employee communicates and collaborates throughout the day in some form. Those interactions can make or break the employee experience. When employees have the right channels and methods to communicate clearly and connect with their co-workers, they can do their work more easily. But when those channels are siloed or broken down (or worse, don’t exist), communication stalls and employees can get frustrated.

Benefits of a strong work community: Employees want to belong at work—it’s part of our natural human desire to build communities and connections. Yet 40% of employees say they feel isolated at work, which leads to disengagement and a lack of commitment to the organization. And with more employees working remotely, that sense of isolation poses an even greater threat.

A strong work community brings out the best in employees and helps them feel valued, connected, and engaged at work. Harvard Business Review research found that belonging is linked to a 56% increase in performance and a 50% decrease in turnover risk. Employees that are part of a strong work community also receive double the raises and 18x more promotions.

2. Recognition and Praise

It’s human nature to want to be recognized for a job well done. A culture of recognition offers support and helps employees know their contributions are seen and appreciated. When employees receive meaningful and authentic praise through words, rewards, or formal recognition, it builds trust and security and keeps them engaged in their work.

Peer-to-peer and top-down: Authentic recognition comes from the top down (leaders to employees) or is peer-to-peer (among colleagues). It’s one thing for an employee to receive praise from a manager who is removed from a project, but it’s another to get heartfelt thanks and recognition from someone who was in the trenches with you and understands the day to day of your work. A great employee experience is built around both types of recognition and praise, which feels more honest and transparent than a leader checking a box to thank an employee that month.

Data-backed benefit: Recognition and praise are considered softer aspects of employee experience, but there’s no denying the hard proof of their impact. One study found that more than 91% of HR professionals believe recognition and rewards make employees more likely to stay in a company.

Southwest Airlines is known for its strong employee focus. But things moved to the next level when it unveiled a strategic employee recognition program. Recognizing and praising employees significantly boosted staff engagement and motivation and helped Southwest employees feel significantly higher job satisfaction, loyalty, and drive to do well.

3. Values-Based Culture and Purpose

Purpose is the why behind your company. Why do you do what you do? But it also applies to each employee. Why do they show up to work? Why did they choose to work for your organization?

Culture is what it feels like to work for your company. Your values, beliefs, and behaviors determine how employees and management interact, perform, and handle business transactions. Every company has a culture, whether or not they realize it. But to be effective and positive, a culture must be intentional, with values and behaviors that support the overall purpose.

Create a purpose that resonates with everyone: Employees want a sense of purpose in their work and a connection to the bigger picture. Research from McKinsey found that 70% of employees say their sense of purpose is defined by their work.

Zappos is known for investing in its employees and providing a clear sense of purpose. Former CEO Tony Hsieh said, 'Our number one priority is company culture. Our whole belief is that if you get the culture right, most of the other stuff like delivering great customer service or building a long-term enduring brand will just happen naturally on its own.'

A purpose that resonates with everyone is clear and direct. It gives employees a sense of where the company is headed, why it is moving there, and how it will get there. When employees truly understand the purpose, they’ll want to be along for the ride.

Emphasizing values every day: Setting a purpose and creating company values isn’t a one-time thing—they manifest themselves through how employees act and work every day. In the most successful companies, the values are part of every employee’s daily walk and talk, not just inspirational words they see printed on a poster. Leaders set the tone by really living the values, making them a regular topic of conversation and use them to fuel goals, business decisions, and metrics.

4. Employee Growth and Learning

Employees don’t want to stay stagnant in their careers. Without a sense of progress and growth, employees can easily grow tired of their work and become disengaged or burnt out. Providing opportunities for growth and learning through training programs, mentorships, tuition reimbursement, and other opportunities shows that companies care about employees and want them to grow within the company.

Employee development: Investing in their future is one of the best ways to show you value and believe in an employee. Employee development is a win-win: employees gain valuable skills to up-level their careers, and companies get upskilled employees that are more loyal to the organization and capable of stepping into bigger roles. Providing employee development transforms the employee experience and plays a huge role in retention and engagement. A notable 74% of employees say a lack of employee development opportunities is preventing them from reaching their full potential. And other research discovered 40% of workers are leaving their jobs because they are unhappy with career development opportunities.

Manager development: Stepping into a manager or leadership role is a big career move. But the vast majority of new managers don’t get the training they need to succeed—or any at all. One survey found that more than 91% of managers received little or no formal training. When managers make such a huge impact on the experience of their employees, prioritizing their support and development should be paramount.

Employee experience means giving employees the tools they need to thrive, especially when moving to a new role. Systemized manager development programs not only give managers the skills and confidence they need to lead, they also provide the company with a steady stream of leaders who understand its culture and align with its values and mission.

5. Employee Wellbeing and Support

Employees spend more time at work than anywhere else, so it’s important to create a supportive and healthy environment. Who wouldn’t want that? But a great employee experience also acknowledges that employees are more than just employees—they are people with lives outside of work, families, hobbies, and goals. A great work experience helps employees thrive and grow in other aspects of their lives.

Bring life back to work: The old mentality around work was that employees clock in, leave their personal problems at home, and then clock out.That’s no longer the case. Today’s employees want to bring their whole selves to work and share their personalities and interests, their wins and their challenges. The line between work and life is blurring to create a supportive environment where people can be vulnerable and honest and get the support they need, even for everything that happens outside working hours.

Creating a healthy work environment: Research from Gallup found that all generations of employees rank 'The organization cares about employees' wellbeing' in their top three criteria for a place to work. For millennials and members of Gen Z, it's their number one workplace priority. A healthy work environment supports healthy habits and provides psychological safety and an inclusive mindset for all employees.

The Gallup report included the following insight: 'Many talented workers are leaving for workplaces that align with their personal belief system and show an authentic concern for individual employee wellbeing. People want a good job and a life well-lived. With record-high resignations and a labor shortage, some leaders now realize that they need to provide more than check-the-box wellness programs and perks to retain their best.'

6. Management Development and Performance Tracking

A strong employee experience requires guidance and systems for performance tracking and management. Providing a supportive culture and environment doesn’t mean letting employees get away with sub-par performances; it means providing a better system for measuring and managing their performance. When approached with the right tone and mindset, performance tracking can be a positive experience that helps employees grow and improve.

Better meetings: We’ve all sat in meetings that could have easily been conducted via email. Research finds that an incredible 70% of meetings are a waste of time. When done well, meetings encourage collaboration, team building, and productivity. But too often, they are too long and unproductive. Providing guidance for better meetings can significantly boost employee morale and help them use their time in better ways.

Updating traditional performance management: The old notion of annual performance reviews is becoming increasingly outdated and replaced by real-time conversations and a new approach to performance management. Many companies encourage leaders to hold shorter, more frequent check-ins instead of waiting for a one-time annual meeting to provide feedback and discuss growth opportunities. Tracking performance management through dashboards and digital systems gives managers and employees a look at performance levels and real-time feedback.

7. Employee Feedback and People-Data Analysis

Like all areas of business strategy, employee experience is continually improving and evolving. What employees value or prioritize may change, or an initiative might not be as impactful as originally thought. Data provides valuable insights into the effectiveness and ROI of people initiatives. Listening to and applying employee feedback to continually refine the experience strategy also gives employees a voice and shows them again just how much they are valued.

Exit surveys: Some of your best insights can come when employees leave the company. They may not be counted among your ranks, but you can learn about their reasons for leaving, what contributed to their feelings, and suggestions they may have to improve the experience. Employees often speak more freely on their way out, so look to exit surveys for their candor and openness.

Turnover information: Why do employees leave when they do? Is there a certain time when employees are most at risk for leaving? Look at turnover information to find weak spots in the employee lifecycle. You may discover high turnover around the one-year mark or around the holidays, signaling that your one-year check-in process or policies around busy seasons may need to be adjusted.

Prioritizing Employee Experience Doesn’t Need to Be Complicated

Employee experience is vital for modern companies to compete to attract and retain great talent, but it doesn’t have to be complicated. There are numerous moving pieces, but don’t overthink it. Focus on what matters most to the employee experience: employees!

Providing a great experience starts with understanding your people, treating them like humans, and appreciating their work. With that foundation, you can create an impactful and comprehensive employee experience strategy.

Still not sure where to start? Motivosity can help. Our leading employee recognition and experience tools help you be there for your people and create an employee experience they won’t forget. Click here to learn more.