How employee and customer experiences are two sides of the same coin
By: Patrick Zimmermann
Tags: Employee Experience, Employee Engagement, Change Management, Customer Experience, Culture

It has long been established that a stellar customer experience (CX) is a major, if not the foremost, driver of business success. Businesses need customers to achieve their goals and to make money, but they also need employees too. Similarly, it is fairly well understood that employee experience (EX) is an important focus for businesses. Amongst other things, a positive employee experience leads to healthier performance (not to mention fewer challenges) in the areas of human resources and operational efficiency.

This article does not focus, however, on the importance of employee experience as a purely internal concern. Instead, I want to draw attention to the less commonly explored correlation between EX and CX — and how the former affects the latter. Both customers and employees are humans that can be motivated or disappointed in the same ways. They have emotional and rational needs, and can feel and express positive and negative emotions. In other words, there is a deep symbiotic relationship between the experiences of customers and the employees that serve them. By improving one, you may very well improve both.

Fortunately, these synergies mean that business leaders don’t need to reinvent the wheel to improve the experience their firm provides. The tools commonly used to enhance CX are almost entirely transferrable into the EX field and a holistic approach to commercial improvement IS possible.

What is employee experience, and why is it important?

EX is almost exactly as its name describes — in a nutshell, the perceptions held by a staff member as they journey through their employment from the job candidacy stage until their exit from the firm. Important components of EX include a company’s status, workspace, culture, and technology along with a great many business-specific factors. Employee engagement is also both a factor and a product of an employee’s experience. Although there are many possible definitions for this, perhaps the best comes from the O.C. Tanner Institute — that employee engagement is a top-down philosophy, which concerns the relationship between employees and a business’s culture and purpose.[1]

The term is one that has been bounded about for years, but some argue that the modern concept of EX was given legitimacy by the ethos adopted by Airbnb. In 2016, the holiday rental marketplace company created a department with the specific aim of improving employee experience. At the time of writing, Airbnb ranks 6th in the Employee Experience Index behind giants such as Apple and Google. This gives credence to the argument that EX is an important consideration for modern businesses, but let’s take a closer look at the more tangible benefits behind the theory. These can broadly be split into three categories — for the employee, for the organisation they work for, and for the customers that they serve.

For employees, the benefits of a better in-role experience are broad. It’s hard to imagine that anybody would actively seek out a role based on a poor quality employee experience, and there is a natural driver for individuals to push for better circumstances in professional settings just as much as in their personal lives. By measuring the success of EX as a factor influencing employee engagement, it’s easy to see the link between the experiences of employees and those had by customers. Figures supplied by research and consulting firm the Temkin Group show that 79% of employees at companies with above-average customer experience are highly engaged with their jobs, compared to just 49% of employees at companies with an average or lower customer experience score.[2] This suggests that the factors affecting EX and CX are similar, and it’s not hard to understand why employee engagement is important as a key factor influencing performance.

There are also direct benefits for organisations that create a quality employee experience. Beyond the almost unquantifiable advantages conferred on businesses with high employee morale, firms with a highly engaged workforce have been shown to outperform their competitors in terms of earnings per share (EPS) by 147%.[3] On a granular level, this comes to down to better employee work performance, and higher levels of discretionary effort exercised by staff who are encouraged to go beyond doing the ‘bare minimum’. Happier employees naturally lead to lower staff turnover rates, which also serves to reduce recruitment costs. The combination of these factors delivers demonstrable return on investment, with businesses that invest in employee experience ranking as four times more profitable than those that don’t.[4]

Finally, as mentioned before, employee experience and customer experience can positively influence each other. Companies that excel at creating a great customer experience have been shown to have 1.5 times more engaged employees than companies whose customer experience is lacking in one way or another.[5] On the flipside, firms that have invested in a better employee experience can look forward to a higher Net Promoter Score (NPS) — the measure of how many customers are likely to recommend the company to their contemporaries.

In all, a better employee experience interfaces with the needs of all stakeholders who are served in individual yet intrinsically connected ways.

What makes a ‘good’ employee experience

The next step is to look at what a good employee experience really is. From the outset, it’s necessary to recognise that an effective approach to this requires sustained, long-term change. As is the case with CX, consistency is absolutely key to improving EX. You would be hard-pressed to find somebody who has not criticised a current or past employer for making no more than token efforts to improve the professional environment — be that in terms of physical concerns, or even mental health support.

In this regard, it’s essential for businesses to look at the bigger picture when investing in employee experience. Just as a customer’s experience is defined by the sum of their interactions with a company, an employee’s experience begins during their time as a job candidate and only ends when they leave. Any step of their journey can impact the overall experience, and just as a poor onboarding process is unlikely to bode well for an individual’s perception of their employer, a great start could be betrayed by less satisfactory treatment down the line.

On a more emotional level, businesses that want to benefit from having a quality employee experience must understand that employees are now more interested in a company’s culture and values than in the past. It is a common mistake to believe that employees are only concerned with remuneration, and alignment with a company’s values is important to more emotionally attuned modern employees who no longer leave their work behind once they punch out and head home.[6] This couldn’t be truer now, with the COVID-19 pandemic having necessitated a shift to home working and other new practices that reinforce the need for a deeper, more qualitative, and resilient relationship between companies and their staff.

So, how can companies achieve this? In practice, improvements to employee experience can be broken down into two topics — the operational side of work, and the benefits offered. In the case of the latter, businesses would do well to understand that ‘benefits’ extend beyond their usually accepted meaning of remuneration and bonuses. A well-balanced package could include, for instance, flexible working opportunities, ongoing training, access to technology, mentoring programmes and the chance for an employee to further their own development. For maximum effect, businesses should also seek direct feedback from their employees as to the benefits they genuinely want, educate them about the benefits available at an early stage and at regular intervals throughout their employment, and monitor benefit utilisation to identify the effectiveness of the benefits package along with any improvements that can be made. Even with all of this, however, it is notable that even an excellent benefits package cannot fully compensate for unfulfilling work.

Moving back to the operational side of work, a quality employee experience is most likely to arise from work that resonates with an employee’s values and beliefs. Naturally this is helped by strong communication of company purpose during the hiring process, but employees can develop stronger emotional ties to a business during their employment too. Staff are at their happiest and most engaged when they have a clear career path and the ability to measure their progress whilst being supported in their development via training and even coaching from management figures.

In a similar vein, an employee’s experience can be greatly supported by granting them a degree of autonomy in their work. To some extent, this follows the notion that they are ‘masters’ of their craft and helps employees to engage more fully with both their work and their employer. This couples neatly with an employee’s understanding of the value of the work that they do for clients and to advance the organisation’s purpose more generally. The more they understand the customer impact of their actions, the more invested they are likely to be in their work — to the benefit of all involved. For evidence of these factors in play, you need look no further than to the shoe and clothing retailer Zappos, which seeks to equip its employees with the ability and autonomy to help clients as best they can. Following rigorous training, Zappos contact centre employees are free to do whatever is needed to resolve customer issues and to therein increase the chance of clients returning and making referrals to their friends. Paired with an active approach to recognising and rewarding good performance, giving employees purpose in their work can improve their engagement and experience, along with the experience of customers.

In essence, the factors driving an employee’s experience throughout their time at a company hark back to the basic qualities of a good professional environment. With communication, recognition, and autonomy, employees feel that they have an important part to play in the commercial life of a business — leading to higher engagement and greater satisfaction.

How to create a purpose-driven company

Distilled down, employees are seeking purpose. Businesses that can develop and deploy a clear purpose across their corporate structure give staff something to invest in, and provide a sense of identity that all stakeholders can strive towards. At its most basic, purpose is important because it makes work meaningful. In his book Conscious Capitalism, Raj Sisodia says that employees may be the most important stakeholders of all when it comes to communicating a business’s purpose — and that makes sense since a company that can expound a strong identity and sense of meaning to its employees will see that message spread to customers, suppliers, and beyond.[7]

Building a business with purpose must be a deliberate undertaking. It starts from the very top, with values being set on an organisational level and then embodied by the CEO, senior management team, and so on throughout the corporate structure. This trickle-down effect is important, since it speaks to the problem that many businesses have — managers and senior employees that are not engaged themselves. Rather than passing down a deeply seated belief and interest in the environment, culture, and future of the business that they work for, managers that do not commit to or even understand the purpose of a company instead foster an atmosphere of disinterest and apathy.

With a focus on engagement at all levels, businesses can begin to take the practical steps that will bring their purpose to life. Companies ought ultimately to have such a clear commercial intention and set of values that they can guide the behaviour of employees. The question to ask, according to the founder of culture design group GapingVoid, Jason Korman, is “If people show up each day believing this purpose statement, will it guide the execution of their roles?” By standing for something, a business can create genuine connections that energise employees and customers.

It also helps for leadership figures to keep a finger on the pulse of the business. Purpose-driven businesses benefit from an additional advantage in that they have a clear benchmark against which to measure their success. If their work falls in line with their purpose, they’re on target. If not, tracking back to their values can light the way towards a successful future. This goes as much for commercial considerations as it does for making changes to the way that employees are treated. Data-driven decision making is nothing new for modern businesses, but it can be made all the more useful when viewed through the matrix of employee experience. This is typified by the British supermarket chain Waitrose (who, by the way, welcome each of their employees into the partnership and give them a small stake in the business). Using data gathered from their workplace accident logs and other such materials, they recognised that two-thirds of the company’s occupational health interventions were related to musculoskeletal disorders. As a direct response they enhanced their benefits package to provide a fast-tracked, remote physiotherapy service that genuinely helped employees whilst saving the business an estimated 190,000 working days.[8]

In all, purpose-driven companies stand a strong chance of motivating employees, satisfying customers, and achieving better commercial outcomes. Just as many of the possible ways to improve customer experience involve changes to employee activity, improvements to the employee experience require management and organisational change — which can be greatly aided by the introduction of purpose.

Conclusion — a better employee experience is an improvement for all

Customer and employee experience are two inextricably linked fields. They each affect one another, and a sustained commitment to either is likely to result in change and improvements to both. Just as a customer’s experience of a business is shaped by the complete range of interactions between the two parties, so too is an employee’s experience formed around their entire employment, from the hiring stage right through until they leave their role.

It is important to recognise that employees and customers have different motivations. Employees might not initially have a sense of brand loyalty or an affinity for your products or services, but that doesn’t mean that you cannot deploy the tactics used to improve CX to make your firm a great place to work. All too often business leaders reduce employee experience to the sum total of the remuneration package on offer, but whilst holiday days, sick leave, pay, and flexible working options are important, a good job is so much more that the combination of these benefits.

Even without all of these considerations, employees that are more engaged perform better — and so there is a clear financial case for improving the employee experience.

If you want to find ways to improve the way your business works for its employees, or want to identify and develop purpose for your company, get in touch.