Employee experience is more useful than engagement
Note: this is a sequel blog post. The first one is, ‘Is Employee Engagement a Distraction?‘
As outlined in the previous post, I believe that there are three questions that are much more important to ask than ‘are employees engaged?’
1. What are leavers costing the company?
2. Are employees able to do good quality work?
3. Do employees represent the brand and delight customers?
Let’s examine these three questions.
What are leavers costing the company?
This is critical because high employee turnover is incredibly expensive. Yes, it’s largely a hidden cost, but it’s there all right. And if employees leave in their droves, something is wrong. Yes, it can be because there are too many jobs and not enough people. But in this situation companies have to work hard to compete to attract and keep their people. Imagine your stats show that your company is losing high performers. This data is so much more business critical than some stats from an employee engagement survey.
Are employees able to do good quality work?
The quality of employees’ performance, their work, means your company has a high quality product or service. You can see this in your quality stats, your performance data. It is true that disengaged employees will not be likely to do good quality work. And people do need meaning in their work, and they need good relationships with colleagues and managers. However, focussing purely on whether they are ‘engaged’ or not narrows your focus. You might have highly engaged employees, who “bring their best selves to work” every day. But these employees could easily be poor performers, people without the skills or aptitude. Performance is important.
Do they embody the brand and delight customers?
This enables the company to retain customers and attract new, loyal customers. And hence, grow the business. You can find this information easily – CSAT, NPS. (More shameless plugs. Our CX Lab Tests are largely focussed on obtaining insight that shows the extent to which customers are – or are not – delighted. And we help to put the insight into action through our CX Implementation).
How to make improvements in these 3 areas
Rather than get distracted by employee engagement initiatives, surveys, and the like, it’s better to focus attention on these 3 areas. Understand how the company performs in each of these areas. Identify the opportunities to improve and tackle them.
Reducing the cost of leavers
High labour turnover has a variety of causes, some of which may be external. But it’s always possible to identify opportunities internally to tackle the problem. Us folk at CX Lab like to use the employee experience journey as a way to identify improvements.
You can use this framework to analyse whether employee’s needs are met at the various stages of the journey. You may find that “recognise my efforts” is a low point and needs to be addressed. Yes, it often requires an investment to make an improvement to employee experience. But run the numbers. How much is the employee turnover actually costing your business?
Take customer facing employees in the retail sector, which has the lowest cost of staff turnover of any sector or job type. Oxford Economics* discovered the cost of attracting and selecting a new retail employee is £3,874. And the cost of the reduced level of output whilst the new employee gets up to speed is on average £16,240. In total the cost per head of labour turnover in retail is just over £20k. Let’s say company X has 1,000 front line employees, and a labour turnover of 60%. This costs the business just over £12m each year. Twelve million pounds. Does that sum not have more meaning to a business than a stat such as “this year our employees were 10% more engaged…..”?! Do the math. Reduce your labour turnover to 50% and you have saved £2m per year.
*Oxford Economics report for Unum, 2014: “The Cost of Brain Drain”
Of course, sometimes there is a shortage of skilled people, leading to employees being in demand and frequently moving between jobs. In which case you have to innovate to ensure that the experience of working for your company is unique and fulfilling. And of course, that working for you is more attractive than your competitors. The employee experience journey is a great way to focus in on ways to compete.
For example, in the UK the restaurant sector is experiencing a chef shortage. Brexit will likely make this shortage worse. KMPG estimates that by 2029 the hospitality sector could have a deficit of a million workers. It’s a sellers market, where chefs can afford to jump ship whenever they see a better offer or are disgruntled with their current workplace. To compete, the smart employers are getting creative. Some top restaurants are reducing opening times to 4 days per week. This increases the quality of life of their chefs. Others are offering profit sharing. What is interesting in this marketplace is that money does not become the only factor in chef retention. Instead, restaurants are competing in other areas of the employee experience.
It’s no use having loads of long serving loyal employees if they are performing badly, are unproductive or produce low quality work. People rarely come into a new job and try to do bad work. Look elsewhere for the cause. It’s a blockage of some sort. Again, the EX journey is a helpful model. Were the right people recruited? Were they trained properly?
Giving a great customer experience
Look at two areas:
1. Your customer experience. Is it defined? Do you know what you promise customers? Is it actually clear what your brand stands for? Employees can’t possibly hope to bring the brand alive if they don’t know what it stands for. Or if they don’t know what’s important to your customers. And is your brand believable? If your employees think your brand promises are a load of hokum and mismatched with the actual product/service, then they will pay lip service to it.
2. The employee experience. As above – identify what isn’t right. Some companies treat employees in a way that is contrary to how they want them to behave with customers. It’s a lot easier for employees to deliver great customer service when they themselves are on the receiving end of similar behaviour. Take Metrobank. They aim to put personal service bank into banking, and pride themselves on consistently improving and making things better for customers. These aims are mirrored with employees. This starts from pre-joining, when job ads explain that applicants need to be the kind of people who look to find better ways to do things.
“How you are on the inside is how you are on the outside”.
This saying, coined by the inspiring Linda Moir, (who headed up the London 2012 Olympics Gamesmakers) sums it up.