Employee Experience: A Complete Guide for HR (2024)

Companies that invest in their employee experience are better places to work for, more in demand among applicants, and also more innovative. Organizations must prioritize people’s needs and expectations to compete for talent in today’s job market. This means focusing on employee experience management to improve how the workplace feels to employees.

In this article, we will take a deep dive into the employee experience and offer ways to help you improve yours.

Contents
What is the employee experience?
What are the key components of employee experience?
Why businesses need to invest in employee experience
How to improve employee experience
Employee experience examples
FAQ

What is the employee experience?

Employee experience (EX) is how employees feel about everything they encounter throughout their employee journey. From the time they apply for a job until well after they leave an employer, the entirety of their material and relational interactions shape their perception of the organization.

Employee experience is the HR equivalent of customer experience. The customer experience is an “outside-in” approach in which the customer has a central role in product and marketing-related decisions. Selling products and services that customers will buy requires empathizing with them and focusing on what they want.

Employee experience is the same idea. Employees are the organization’s internal customers, so it must understand their needs, expectations, and fears. Understanding how situations come across to employees helps you define problems and come up with solutions.

The goal is to design an experience that demonstrates care for the employees within the context of their work. This employee-centric approach fits better with the modern workplace and enables the empowerment and engagement of employees.

Companies with a great employee experience provide a streamlined work environment for their employees, which enables them to do their work well and push the company forward.

What are the key components of employee experience?

There are certain touchpoints of the employee journey that impact the overall employee experience the most. This sphere of influence on EX includes the following three key components:

Physical experience

The physical experience is related to the sensory elements of the work environment. For example, how efficient it is to navigate the building floor plan, how comfortable and functional chairs and desks are, how loud or quiet the workplace conditions are, or whether there are windows bringing in natural light or a place to eat and relax on breaks.

Physical aspects directly affect how employees feel about their work, as well as their ability to focus and carry out their duties. They can also be a positive or negative representation of the organization and its values by how they contribute to the overall employee experience.

Adapting the material work environment to create pleasant, energizing surroundings can help employees feel more creative and engaged with their jobs. Finding ways to do this can be as simple as rearranging workstations or offering remote work situations that allow people to choose their own settings.

For remote workers, physical experience is a less prominent aspect of the overall employee experience. On the other hand, hybrid workplace have been rethinking the role of the office in employee experience by focusing on the collaboration and social elements of the office spaces.

Digital experience

Technology is an essential function of the workplace. Employees use digital tools to find jobs, do their job, communicate with colleagues, and interact with HR and other services. Whether digital tools meet their expectations and make work easier or not has a direct impact on employee satisfaction.

Technology should automate mundane tasks and simplify more complicated tasks and processes. For example, job candidates appreciate not having to manually upload every function on their CV to the company’s ATS. They may be more inclined to apply if they can upload their current LinkedIn profile with one click.

The digital employee experience should be a starting point when creating, buying, implementing, and improving the technology employees by trying to understand the end-user. Two central considerations are:

  • How intuitive is it for the user?
  • Does it create value for the user?

Systems should be user-friendly and engaging. The following model, taken from our Digital HR Strategy course, shows this very clearly. Organizations need to strive for level 3.

  • Level 1: It fits the purpose of its design, but it has not been designed with the user in mind. For example, the system requires duplicate input of the same information.
  • Level 2: It is appealing and intuitive. Once you get the hang of it, you don’t have to think about what you do – and if you want to try something new, it is self-explanatory.
  • Level 3: It offers end-user value. Something that functions well, is simple to use, and solves a problem or offers people a way to connect with each other. For example, mobile technology that allows people to do their duties without going back and forth to a workstation.

Note: As you’ll see below in our real-life employee experience examples, digital tools are often incorporated into solutions that enhance other aspects of the employee experience framework.

Cultural experience

Cultural experience is the personality of a company. It includes the values, symbols, and visible behaviors that are displayed in everyday practices. In other words, it’s the intangibles that influence how the work environment feels.

Culture is about creating an environment where people want to work and can flourish. Without the right culture, the digital and physical experience may not be enough to create a desirable overall EX.

A company culture that promotes creativity, collaboration, and empowerment cultivates employees who take risks, actively innovate, come up with new ideas, and then collaborate to implement them. This type of culture also puts employees in the right mindset to embrace new systems and initiatives.

Why businesses need to invest in employee experience

It is said that good managers enable employees to do their work by removing obstacles that prevent them from doing so. The employee experience is similar. By simplifying systems and processes, it becomes easier for employees to do their work.

Companies that create a great employee experience throughout recruitment, new employee onboarding, career path development, and performance management are able to reduce complexity and stimulate collaboration.

According to Dery and colleagues (2017), a survey of 281 executives the year before showed the difference between the top and bottom quartile on employee experience:

  • The top quartile produced 51% of revenue from new products and services introduced in the last two years, versus 24% for the bottom quartile.
  • The industry-adjusted Net Promoter Score (NPS) was 32 for the top quartile versus 14 for the bottom quartile.
  • The top quartile showed a 25% greater profitability compared to the bottom quartile.

These findings indicate that these kinds of companies can innovate faster by bringing products to the market quicker. In addition, they seem to be able to create a better customer experience. This shows that if the organization enables employees to do superior work, they can serve customers at a higher level.

Positive employee experiences lead to engaged employees, and engaged employees are five times more likely to recommend the organization than those who are not engaged. While an employee-centric mindset is important to designing a good employee experience, the sweet spot is where employee needs and organizational strategy meet. That’s where HR should focus its efforts.


Janet Clarey, Director at McLean & Company

Harvard Business Review researchers studied the correlation between employee experience and customer experience. They analyzed three years of data shared by a large global retail business. The researchers found that if a store’s employee experience metrics progressed from the bottom quartile to the top one, its revenue would increase by more than 50%, with profits improving almost as much.

In summary, employee experience investments make great business sense. Research by Jacob Morgan of 250 organizations shows that companies that invest in their employee experience outperform their competitors that don’t. Not only do they grow 1.5x faster, pay better, and produce more than double the revenue, but they are also 4 times more profitable.

Explore further23 Key Employee Experience Statistics You Should Know in 2024

How to improve employee experience

Since a better employee experience contributes significantly to an organization’s success, it should be a central focus for HR leaders. Here are nine employee experience management best practices to keep in mind:

1. Apply employee experience design methodology

Take the approach that employee experience is about meaningful interactions between employees and the organization. This enables you to craft experiences that will help your employees be their most productive and engaged selves.

The employee experience design process should keep the employee perspective at the forefront. This can be done by asking questions like the following:

  • What is the meaning of this experience, and how will it impact employees and the organization?
  • What is the specific type of employee who will be the consumer of this experience?
  • What are the touchpoints in this experience, and how will employees interact with them?
  • How do we best facilitate the interactions to deliver the experience optimally?

2. Focus on the full employee life cycle

The employee experience encompasses the entire relationship employees have with the organization. This employee life cycle can be broken down into the following seven stages:

  • Attraction
  • Recruitment
  • Onboarding
  • Retention
  • Development
  • Offboarding
  • Happy leavers

Building a great overall EX means that your employee experience strategy must cover each of these stages. Neglecting one or more areas of the employee life cycle can affect how people feel about the organization in the other stages of their journey.

3. Foster total wellbeing

People are looking for an employer that will show them respect by acknowledging that they have a life outside of work and individual needs to be met. According to an ADP Research Institute study, many people would even take a pay cut in order to find this. Offering support for employees’ physical, mental, financial, and career well-being shows them that they are valued as human beings as well as workers.

When you foster total wellbeing in the workplace, it contributes to a positive employee experience and results in increased retention, engagement, productivity, and reduced absenteeism.

4. Prioritize digital employee experience

People are accustomed to having helpful technology at their disposal in their personal lives, and they expect the same at work. Slow computers or making duplicate entries on multiple spreadsheets will frustrate most employees.

Shaping the digital employee experience by providing the tools they need to do their job, as well as training and support for those tools, will make their jobs easier. This can help employees be more productive and keep them engaged with their work.

5. Collect and act on employee feedback

For the best advice on how to improve employee experience, go to the source. Feedback mechanisms, such as employee experience surveys and measuring Employee Net Promoter Score, help you form a connection with employees by showing them that you value what they have to say.

Employee feedback allows you to measure their morale, as well as perceptions and attitudes about what they’re encountering day-to-day. Hearing what they have to say lets you see what satisfies them and also detect early warning signs of low employee engagement. With this insight, you can create an action plan to reinforce what’s working and make the necessary changes that employees will find meaningful.

Dive deeperMeasuring Employee Experience: A Practical Guide for 2024

HR and company executives must understand the contributing factors affecting their organizations’ employee life cycle. In understanding what it takes to not only retain employees, but keep them energized and motivated, leaders can curate the employee experience, giving their people autonomy and ownership over their professional development.


Janice Burns, Chief People Officer atDegreed

6. Encourage employee autonomy and decision-making

Employees like to make their own decisions about how to get work done. When they have this freedom, they will feel more committed to their jobs and come up with ways to become more productive.

Foster a sense of ownership and accountability in your employees by empowering them to take initiative. Here are some ideas:

  • Build trust between supervisors and direct reports by allowing employees to experiment and take risks without fear of shame or blame. Support this with boundaries that hold employees accountable but keep choices within certain parameters.
  • Put naturally autonomous people in charge of projects or teams to set the tone for others.
  • Provide the tools and resources teams need to be more innovative.
  • Give credit to teams that produce strong results.

7. Commit to DEIB

The unique perspectives gained from a diverse workforce benefit an organization by fueling ingenuity. Invest in creating a positive and inclusive work environment where people want to collaborate because they believe they belong and have a voice.

For example, promote diversity in hiring and leadership and provide training and resources to address bias and discrimination. Programs such as mentorships and employee resource groups can also nurture a culture that values and celebrates diversity.

8. Develop strong leaders and managers

Business leaders and managers have a pivotal role in shaping employee experience at your organization. Competent leaders who are authentic and empathetic help create positive experiences for employees.

Top leadership must have a visible presence to employees and take part in supporting a healthy company culture that’s connected to organizational values. Managers should be equipped to coach employees as well as direct their work. This means having constructive one-on-ones and communicating with a personal touch and genuine concern for employees as individuals.

9. Recognize and reward excellence

Employees need a sense of purpose and to know that what they do matters to the organization. It’s important to show them that you appreciate their contributions and achievements.

Celebrate milestones, new roles, promotions, and even retirements with private acknowledgments or public recognition events. Highlight accomplishments by rewarding employees with bonuses, promotions, and non-monetary incentives like extra vacation time. This will let them know they are valued and make a difference.

According to Linda Shaffer, Chief People and Operations Officer atCheckr, competitive compensation and meaningful rewards and recognition are key elements of employee retention.

“By offering competitive salaries, benefits, and bonuses that reflect the organization’s commitment to providing a fair workplace for employees and designing an engaging workplace with meaningful rewards and recognition, organizations can ensure that their people are engaged, motivated, and committed to the success of the organization, creating an environment in which everyone thrives,” says Shaffer.

Building a great experience for your employees is a long-term process. However, the sooner you start building and strengthening the foundations of the physical, digital, and cultural experience, the sooner your business will benefit from engaged, committed employees.

Employee experience examples

Let’s take a look at how three companies addressed digital, cultural, and physical experience issues to improve their holistic employee experience:

A multinational consumer goods company

A multinational consumer goods company had a complex IT structure in place that required too much time for employees to accomplish basic tasks. They had to access multiple sources to follow up on HR queries and cases. A unified structure was needed to handle employee requests across numerous functions, such as IT, HR, and legal.

The organization replaced their antiquated system with a cloud platform query management tool that consolidated all inquiry tickets in one place and integrated a self-service portal and chatbot. This saved money, reduced error rates, and simplified how employees access the services they need.

Jackson + co*ker

Employees at the headquarters of healthcare staffing firm Jackson + co*ker enjoy perks such as childcare services, a company gym, and on-site restaurants. However, a survey revealed that they sought more consistent recognition.

Leaders decided to implement a standardized recognition and rewards program through a digital platform. It allowed managers to recognize the efforts of their team members, as well as peers to recognize positive behaviors in each other. It also included virtual activities for team-building and promoting health and wellness.

Employees took to it quickly. Only a few months in, every employee took part by either recognizing a colleague or being recognized at least once. The company’s next employee engagement survey showed a 6% increase to 89% of employees who felt appropriately recognized for their work.

Discover more examples9 Inspiring Employee Experience Examples To Boost Your EX

One Workplace

Commercial interiors provider One Workplace has a flexible working culture that helped them transition during the 2020 pandemic quarantines. When offices re-opened, the company re-imagined the workplace experience by giving employees options to accommodate what made them feel safe and work best.

A new mobile app allowed employees to locate open spaces to work throughout the office or be connected while they worked remotely. With this technology, employees can reserve desks, locate amenities, order meals, and access wellness information and services.

A final word

Employees drive the business success and customer satisfaction, which makes employee experience vital to gaining a competitive advantage in the market. Countless factors contribute to how employees perceive their employer, but the key influences are the physical, digital, and cultural conditions the organization offers.

HR must help leaders take a good look at the state of these three aspects from the employee perspective and find ways to make improvements. When employee experience considerations are put front and center, employees are engaged and treated the way they should be. This empowers them to contribute more to the organization.

FAQ

What is the employee experience?

Employee experience is how employees feel about what they encounter and observe over the course of their employee journey. It relates to the physical, digital, and cultural environments of an organization.

Why is employee experience important?

Research shows that companies that invest in their employee experience outperform their competitors that don’t. They grow faster, pay better, produce more than double the revenue, and are more profitable. What’s more, strong employee experience makes an employer more attractive in a competitive job market.

How to improve the employee experience?

Organizations must take an employee-centric approach to decision-making and focus on creating a favorable work environment by meeting a broach spectrum of employee needs.

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Employee Experience: A Complete Guide for HR (3)

Erik van Vulpen

Erik van Vulpen is the founder and Dean of AIHR. He is an expert in shaping modern HR practices by bringing technological innovations into the HR context. He receives global recognition as an HR thought leader and regularly speaks on topics like People Analytics, Digital HR, and the Future of Work.

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