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Local Service Partners

Local Service Partners are independent EAPs with which WPO has established strategic relationships for the delivery of global EAP services in alignment with the WPO models, processes and quality standards.

  • 28 November 2023
  • 8 months

How Employee Experience Impacts Organizational Health

Emily Fournier

Marketing and Communications Manager

According to the 2021 Will Towers Watson Global Survey, a whopping 92 percent of employers cited “employee experience” as a top priority for their organizations over the next three years—up from only half of employers prior to the pandemic.

Employee experience, not to be confused with employee engagement—the intended or desired outcome of a positive employee experience—can best be understood as everything the employee goes through at work, both in his or her day-to-day, as well as within the so-called “employee life cycle,” beginning with recruiting, hiring, and onboarding, all the way to separation.

It’s a vastly overlooked and undermined facet of organization’s employee value proposition, or what makes an employer so appealing to work for. While most employers and HR leaders still believe that compensation and benefits are paramount when it comes to attracting, retaining, and motivating talent, survey data consistently shows that the employees themselves regard both as less important than other components like manager-employee relationships, career growth opportunities, work-life balance and flexibility, role clarity, and positive team environments.

To put it another way, what this means is that workers are now paying extra close attention to how employers actually live out their otherwise written commitment to their employees—and their findings are troubling.

Employers Don’t Pay Enough Attention to the Employee Experience

Despite being listed as one of the top priorities for leaders and HR managers heading into 2024, the “employee experience” at far too many organizations is less than desirable. In fact, survey data from Gartner reveals that only a mere 13 percent of employees are fully satisfied with their experience. This deficit is reflected in additional findings as well; for instance, that only 15 percent of the global workforce is actively engaged at work.

A collection of pulse surveys point to various conflicts likely driving such disengagement, chief among them including a lack of sufficient management, leadership, training, and onboarding.

According to researchers at Gallup, only 12 percent of employees agree that their organization does a great job of onboarding, resulting in just a little over a quarter saying that they feel “fully prepared and supported” to excel in their new roles. Even once they’ve “fully acclimated” to the workplace (i.e. once the onboarding process has ended), only a third of employees believe that they have the materials and equipment needed to do their work right or have the opportunity to do what they do best every day.

A lack of support and recognition from managers and leaders also comes into play when it comes to poor employee experience and engagement, as employees—especially young workers under the age of 35—complain about a lack of recognition or reward for their contributions, a lack of opportunities for personal and professional growth, a lack of regular feedback, and leadership’s overall ignorance or oblivion as to what’s not working in the workplace and why. Furthermore, research finds that more than eight in 10 employees disagree that “their performance is managed in a way that motivates them to do outstanding work.”

Consequences of a Poor Employee Experience

Such disengagement, dysfunction, disappointment, and even disdain comes at a considerable cost to the organization.

In terms of monetary losses, researchers at Gallup estimate that a poor employee experience and the disengaged employees it creates cost organizations nearly $9 trillion in lost productivity. Furthermore, disengaged employees produce a 15 percent lower profitability for their organizations, for a loss of nearly $16,000 per disengaged employee, per year.

And it’s not just their presence that’s costly: experts maintain that it costs anywhere from a third to 60 percent of an employee’s salary to replace them—a task that’s a lot more frequent within organizations that have a poor employee experience. According to the latest findings, employees who don’t receive recognition are twice as likely to look for a new job, while employees who don’t feel supported are three times as likely to do so. Moreover, some of the top reported causes of turnover in 2023 include a lack of recognition, a lack of advancement opportunities, poor culture and management, and inflexibility and overwork—highlighting once again how secondary compensation is compared with employers’ day-to-day treatment of their workforce.

And that’s not all in terms of costs to the employer, as research shows that a poor employee experience can even show up within indirect costs—specifically, in excessive healthcare spending. This is because, per survey findings from Gallup, disengaged employees have a 61 percent higher likelihood of burnout and a 48 percent higher likelihood of daily stress, which consequentially increases their risk of illness and chronic health issues. As such, further research shows that organizations with a poor employee experience suffer from 37 percent higher absenteeism compared to organizations with engaged teams, as disengaged employees take more than twice the number of sick days per year compared with their engaged counterparts, averaging at more than six sick days a year.

Benefits of a Positive Employee Experience

On the other hand, a positive employee experience is proven to produce a range of benefits for the organization, including no less than higher profits and a strengthened ROI, strong communication and collaboration, improved morale and retention, higher-quality candidates, and a happier, more productive workplace.

While a disengaged workforce is bound to result in lower profits, reduced output, and a weakened bottom line, highly engaged employees, on the other hand, are shown to result in a 23 percent increase in profitability and a 21 percent increase in productivity. Further demonstrating their financial value to an organization, studies have also shown that highly engaged employees have 53 percent fewer missed days—reducing absenteeism and excessive healthcare spending—and decrease staff turnover by nearly 60 percent—saving organizations the money it would take to replace them.

In addition to financial boosts, research has also shown that engaged employees are 87 percent more likely to feel a strong sense of loyalty to their organization, which means that they’re more likely to stay with the organization for a longer period compared to disengaged employees; are more likely to take advantage of internal promotions and career opportunities; are more likely to produce loyal and long-lasting clients and customers; and are more likely to attract better talent. In fact, surveys have found that happy employees are 70 percent more likely to recommend their organizations as a great place to work, guaranteeing a happy, engaged workforce for years to come.

Creating a Positive Employee Experience

Oddly enough, while more than 90 percent of leaders are generally aware of the impacts that a positive employee experience can have on their organizational health and performance, only a mere quarter of them have come up with a strategy for creating that positive experience, while staggeringly low engagement and satisfaction rates suggest that most of them aren’t even considering the employee experience at all.

So, what exactly constitutes a positive employee experience? And how are these aforementioned benefits curated?

In the very simplest of terms, a positive employee experience is one in which the employee is treated like the complex, dynamic individual he or she isnot like just another cog in the machine that many are made to feel like. To prevent the latter, there are two key components that employers need to prioritize: (1) the formal structure of the workplace, and (2) the immaterial atmosphere of the workplace.

Starting with the former, the “structural” aspect of a positive employee experience can best be divided into several key components:

  • People-centric policies;
  • A robust and seamless onboarding process;
  • Clearly defined roles and responsibilities, as well as a clearly outlined hierarchy, detailed list of tiers/ranks, and a clear path for internal promotion;
  • Internal opportunities for upskilling and training, learning and development, and career progression;
  • An expansive and comprehensive list of perks and benefits; and
  • A clear mission or “purpose”—especially one that is tethered to the organization’s social impact

Starting off with that final bullet, research shows that nearly three quarters of employees derive their sense of purpose from their work; that said, they no longer want to be working for organizations that they perceive to be actively harming their communities or environment. In fact, a recent survey of more than 2,000 employees in the US found that nearly eight in 10 indicated that they want to work for an organization they believe is actively trying to make a positive impact on the world.

Interestingly enough, when organizations achieve that same ratio when it comes to how many of their workers agree that the organization’s mission or purpose—and thus their jobs—are important, they can reap the benefits of a 51 percent reduction in absenteeism, a 64 percent drop in accidents or injuries, and a 29 percent improvement in quality of work. To achieve this, employers should focus on a few key defining factors, including their social impact (i.e., corporate social responsibility), ESG commitments, their mission and values statement, and their partnerships with other groups and organizations.

Tying in with this commitment to one’s social impact, another way to create an organization structure that reinforces a positive employee experience is through people-centric policies. This includes robust anti-harassment and anti-discrimination policies, as well as strong diversity, equity, inclusion, and belonging (DEIB) practices. According to BetterUp’s 2022 Employee Experience Guide insights, prospective employees are looking for a workplace that allows them to “bring their whole selves to work every day;” enables them to feel “a deep sense of belonging, connection, and purpose;” and that champions a “diverse workforce with inclusive leaders.”

Similarly, BetterUp’s report found that, in addition to prospective employees’ desire for an organization that allows them to bring their whole selves to work every day, they are also looking for an employer that encourages them to reach their full potential, upskill and learn new things, and “find purpose and meaning in their career and overall career goals.” This is achieved by offering ample opportunities for professional development, including workshops, seminars, free online courses, tuition or course fee reimbursements, and mentorship programs. As their research suggests, learning and development opportunities make up 31 percent of today’s employee experience model; thus, it is imperative that employers keep in mind that it is their duty not only to care for the people their workers are today, but the people they will become during their tenure.

And of course, there’s no better way to achieve this than by offering a robust and holistic benefits package. By investing in wellbeing programs that support the whole individual, employers can tackle or avoid some of the major stressors currently interfering with the employee experience, including financial stress and insecurity, caregiver stress and a lack of supplemental child or eldercare, stress about student loans or uncertainty about the future (for students), poor physical, nutritional, and mental health behaviors, and more. When employees can trust that their employers truly have their back and care about them as dynamic individuals—not just “cogs in the machine”—they become more empowered and more willing to really take advantage of their benefits, alleviating them of the unnecessary stress that so often gets in the way of their workday and paving the way for a smoother, better employee experience.

Other benefits of investing in a holistic wellbeing program include biometric screenings and organizational assessments, both of which allow employers to scan their workplace for signs of trouble, including ill health, disengagement, conflict, and stress. This way, employers can proactively begin to improve the conditions of their workplace before their employees have to lift a finger about them. This, of course, will signal to employees that their employer cares about them enough to pay close attention to what their needs and desires are without having to be told, which will strengthen employees’ loyalty to their organization and improve their overall experience in the workplace.

A good example of how employers so often fail to do this is the mismatch between employees’ desire for flexible, remote, or hybrid working opportunities and employers’ desire for them to return to the office. New study findings reveal that a third of workers would quit their jobs if they had to return to the office—while over 70 percent of prospective talent wouldn’t consider a job that didn’t have a flexible work arrangement; and yet, more than 60 percent of full-time employees have been forced to return to the office over the past year—something that more than 80 percent of their bosses have come to regret. That said, another crucial way to improve the employee experience is by implementing a flexible work policy that offers employees some much-needed autonomy over their workday.

And when it comes to creating a workplace atmosphere or culture that upholds a positive employee experience—i.e., the “immaterial” aspect of the employee experience—there are a few key elements that matter most to employees. Chiefly, these include:

  • Strong managerial support
  • Frequent recognition and actionable feedback
  • Clear communication between managers, teams, and peers
  • A positive, good-natured culture

According to research conducted by MIT Sloan, one of the largest predictors of an organizations’ culture score is respect—or more specifically, how well managers treat their staff—and it makes sense. At the end of the day, the manager experience is the employee experience: Managers determine how seamless an employees’ recruitment and onboarding experience is; they determine the speed at which one grows accustomed to their new role and responsibilities; they’re responsible for properly introducing new recruits to the rest of the team; and they’re overall responsible for ensuring that employees have all of their questions answered at any time. With that in mind, it’s no surprise then that findings from GoodHire indicate that upwards of eight in 10 employees would quit their job because of a bad manager.

But it’s not just poor or irresponsible management that’s to blame; tying in with the second bullet, research shows that a lack of value, a lack of recognition, and a lack of concern toward employees’ professional development from management can all lead to less-than-satisfied employees, and eventually to increased staff turnover. In fact, research from McKinsey suggests that more than half of employee engagement is driven by “nonfinancial recognition” from management and leadership, whereas a lack of such recognition is the number one reason that unhappy employees give for being disengaged and dissatisfied with their job. This comes as nearly two-thirds of employees report that they do not receive enough praise at work. To rectify this, researchers stress that nearly half of ‘highly engaged’ employees receive feedback at least once a week, compared to only 18 percent of employees who are not or are actively disengaged, suggesting that managers need to start spending more time with their teams and revamp their feedback and recognition strategies.

Similar to a lack of feedback, poor communication in general is a huge red flag for employees and significantly impedes upon the overall employee experience. As Lisa Sterling, Chief People Officer at Perceptyx, recently shared with HRMorning: “Probably 80 percent of the challenges that we’re faced with as organizations, people somewhere in the organization already know how to solve those problems. They’re just not being given the voice or the podium or the opportunity to talk about them.” Not being given the proper opportunity to express their thoughts, their ideas, their concerns; not being able to ask questions and receive answers, to communicate and collaborate with and across their teams; not being able to easily reach leadership—these can all lead to the erosion of trust, respect, camaraderie, and loyalty in an organization, enervating employees and pushing them to seek elsewhere for work. Consequentially, experts have stressed the importance of using up-to-date communications software like Slack and Teams to streamline the communication process and prevent delays in sharing vital information and feedback.

Lastly, one of the most important aspects of the workplace that will define the overall employee experience is the state of the organization’s culture. New survey findings show that nearly 80 percent of employees agree that a strong, good-natured culture allows them to do their best work. Furthermore, a strong sense of belonging and good relationships with colleagues are one of the main reasons why nearly three-quarters of employees say that they enjoy their jobs. On the other hand, a recent FlexJobs survey found that nearly two-thirds of employees cited a “toxic company culture” as the main reason why they left their job in 2022—highlighting just how essential it is for employers to not only focus on the manager-employee relationship, but on the employee-employee relationship as well; in other words, all workers need to be able to trust those around them, but more than that, they need to feel equally trusted and respected as well.

When employers create such an accessible, inclusive, transparent, and empathetic environment, they can be rest assured that they are subsequently cultivating a happy, healthy, and engaged workforce, and a satisfactory employee experience.

Workplace Options helps employees balance their work, family, and personal needs to become healthier, happier, and more productive, both personally and professionally. The company’s world-class employee support, effectiveness, and wellbeing services provide information, resources, referrals, and consultation on a variety of issues ranging from dependent care and stress management to clinical services and wellness programs. Contact us to learn more. 

This content is intended for general information only. It does not provide specific direction, advice, or recommendations. You may wish to contact an appropriate professional for questions concerning your particular situation.

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