The CX Network Guide to employee experience

This CX Network guide looks at employee management, engagement and retention and the links between employee experience and customer experience

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Jerome Smail
02/28/2023

This CX Network Guide to employee experience (EX) explains the definition and purpose of EX, why it is important for businesses and what actionable steps business leaders can implement to improve EX in their own organizations.

In this guide:

What is the employee experience?

EX covers the employee’s journey with an organization, including their interactions with their employer and co-workers, their wellbeing at work and their connection with the business and its customers.

According to Simi Dubb, Metro Bank’s director of colleague experience and inclusion, EX “encompasses the physical, technological and cultural environment of [the] business, taking into consideration how colleagues see, hear, believe and feel about all aspects of their employment”.

A strong employee experience, where team members and leaders have purpose in their work, fosters employee engagement. This helps to form a virtuous circle whereby productivity and innovation increase and turnover is reduced.

The top EX trends suggest many businesses recognize the importance of EX and are investing accordingly. According to Gartner, 70 percent of organizations made additional investments in wellbeing between 2020 and 2022. On the other hand, a bad employee experience and low engagement are expensive – the cost of lost productivity due to disengaged employees, otherwise known as “quiet quitters”, is estimated to be US$400bn-$550bn.

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How is EX related to CX?

EX is directly linked to improved CX.

A study by MIT Sloan Center for Information Systems Research (CISR) concluded that “companies with a great employee experiences are more innovative and profitable and had higher levels of customer satisfaction”. The companies with the best scores for EX are “paving the way for employees to work together effectively and engage with customers in new ways to enhance revenue streams”.

Similarly, a Gallup study of business units and teams found those ranking in the top quartile for employee engagement averaged 10 percent higher outcomes for customer loyalty and engagement than their bottom quartile counterparts. Other research has found organizations that lead in their CX proposition typically see 60 percent higher employee engagement.

Customer experience managers are increasingly acting on these connections. A recent CX Network report, found that 83.4 percent of CX leaders unanimously agreed that EX has a quantifiable impact on CX.

In CX Network’s Talent Retention report, Claire Hill, customer operations director at Travel Counsellors, observed: “Ten years ago you would not join customer experience up with the people agenda as it was separate. Now I am noticing much more investment being made in employee wellbeing and an awareness of how employee experience correlates to the customer experience.”

According to CX futurist Blake Morgan, the link between EX and CX is “undeniable”. She says: “Study after study has shown that investing in employee experience impacts the customer experience and can generate a high ROI for the company.”

Employee engagement strategies and best practices

As our sister portal, HR Exchange Network reported, there are five best practice techniques that can lift an underperforming engagement strategy. They are: create a transparent workplace, encourage open communication, foster collaboration, invest in employees and promote employee wellbeing.

The power of employee perks, however, particularly in B2C, cannot be underestimated.

Spotify is a standout performer when it comes to employee engagement and its subscribers reap the rewards through innovative personalization, automation and a great customer communication strategy. When it comes to traditional employee engagement Spotify has a range of tech platforms to support collaboration and goal measurements, but the streaming platform offers a range of other competitive perks for its employees that help it stand out from competitors and motivate its huge global workfoce.

These include, but are not limited to: global paid parental leave of six months for all new parents, an employee assistance program and self-care hub and a US$10,000 a year reimbursement for top credential programs, academic degrees, technical certifications, and advanced specializations.

Another best practice tip is to show appreciation to your employees for their work. Mary Shelley, chief people officer at Tango Card told HR Exchange Network that leaders can show their appreciation to employees whenever required, by balancing formal and informal recognition and diversifying rewards.

How to improve EX and retention

One of the key signals of successful EX management is a high employee retention rate. Even after the Great Resignation, 28 percent of companies are facing labor shortages, giving even more reason for customer experience managers to prioritize retention across their teams.

Remote or hybrid working is now widespread and, in many cases, expected. While offering such flexibility is important for employee retention, it also presents challenges when it comes to maintaining the essential connection with the business.

Chip Bell, author, consultant and founder of the Chip Bell Group, says strong employee retention and engagement are easily built in organizations that have a clearly communicated purpose.

“This is a cliché but I think it is still true: the organizations that are trying to keep people in today’s challenging economy are those that have an attachment to a noble purpose. Those who say, 'this is who we are, not just what we do'.

“People put a lot of effort into things they believe in so this starts with asking how we get people engaged in our mission not just our task. This requires leaders who can set an example to lead with vision and purpose. Whatever the label is, it represents the idea that work has a higher calling than being a means to an economic end,” he says.

McKinsey & Company also says connections with employees can be strengthened by offering them a strong sense of purpose and belonging.

Online clothing retailer Zappos utilized the customer service skills of employees to help the public during the pandemic. The company created a customer service line to answer questions and help find solutions for those who contacted them.

With business slower and call volumes down, the hotline gave the company’s customer service reps meaningful tasks between their regular calls. It also offered reps the chance to help others and connect with them, which according to McKinsey is one way that people can help satisfy the psychological need for belonging.

Measuring improvements in EX and retention

In addition to the HR department’s data on recruitment, absenteeism and attrition, there are several metrics that can help track the success of an EX program.

Bain’s Employee NPS (eNPS) is based on the same principle as the Net Promoter System (NPS). Although Bain describes the system as “an emerging science”, most eNPS adopters ask: How likely would you recommend this company as a place to work? A follow-up question, however, “can yield even more information as the best predictor of energy, enthusiasm, and creativity”. Bain suggests a variant of: Please indicate your level of agreement with the statement, 'My job inspires me'.

Customer ratings and surveys are not just about sentiment – they can also be utilized to identify stand-out performers. It is an established approach in the contact center, with customers often asked to opt-in to end-of-call surveys that ask about the quality of the service received and then link that rating directly to the employee who served the customer.

Even beyond the contact center, however, CX leaders can ask – or even track – who customers interacted with during their experience and how that interaction met their needs. Sometimes organizations ask for employee, service and experience feedback through a unique code. Alternatively, they can ask customers to provide a receipt number during post-sale surveys.

Essential skills and professional development in CX

Another key step towards EX success is providing people with everything they need to do their jobs to the best of their ability and to realize their potential. As Henry Ford is quoted as saying: “The only thing worse than training your employees and having them leave is not training them and having them stay.”

That means making sure employees have the necessary physical resources, but it also requires that training and mentoring is available to provide teams with all the customer service skills they will need to succeed.

In a further reinforcement of the EX/CX connection, many of the key customer service skills are also the attributes required for providing a positive employee experience – such as good communication, empathy, adaptability. And, of course, a willingness to learn.

In leadership, David Hicks, president of TribeCX and facilitator of CX Network’s CX Masterclass, says the top skills required of customer experience managers in 2023 are “the ability to work across an organization, the ability to understand and interpret the ambition of the business and tech translation.”

He says: “Getting an organization to build its CX ambition seems to be relatively easy, but ensuring it is persistently and consistently delivered is less easy.”

The future of work in CX

In recent years, BT’s principal innovation partner Dr Nicola J. Millard, has conducted extensive research projects to investigate the latest workforce trends in CX, particularly for contact center agents.

In early 2020, Millard surveyed 300 agents in the US, UK and India with the resulting data confirming that agents, their team leaders and managers were struggling. Responding to the trends uncovered here, Millard conducted a second, longitudinal study, with 40 UK-based agents, managers and team leaders to see how their sentiment was evolving.

She says: “Faced with complex and emotive demand, contact centers are having to be innovative. Not all these innovations have worked, so having the humility to admit that this is the case and learning from mistakes is key to future progress.”

Millard says the future of customer service will see widespread adoption of augmented reality (AR) for remote diagnostics and, pushing further out, CX delivery in the metaverse.

Watch Nicola Millard discuss EX with Travel Counsellors' director of customer operations and CX Network board member, Claire Hill.