The following figures and some of the examples in the text are based on the publication “Demonstrating the Business Value of EX – An essential report for leaders looking to understand and improve the business impact of EX in their organization” by TI people.

It is often said: You get what you pay for. So does that automatically imply that expensive things have a higher value than less expensive things? Let’s take the average annual expenditure on employee development and wellbeing in the USA, which amounts to 200 billion USD. If you apply that figure to the 100 largest companies in the US, that would be over $13,000 per employee per year. Without question, that’s a lot, but has it made a difference? According to surveys, only 38 percent of U.S. employees are truly satisfied with their work environment. At first glance, there seems to be a gap between the investment made on the side of the company and the impact on the employee side, more specifically between expectation and actual experience. Does it make sense for companies to invest so much money in employee development and satisfaction? This is a question that many HR managers are confronted with. And they should answer with a resounding “yes”! Creating a good employee experience remains one of the most important success factors for companies in an increasingly complex working world. The critical question is how HR leaders can prove the actual business impact of the EX. New approaches are needed that go beyond recording employee satisfaction and engagement.

What can these look like?

First, it is worth taking a critical look at the measures already in place to improve the employee experience. After all, in order to be able to identify any measurable success at all, the selected measures must actually reach the employees. Companies should ask themselves:

• Am I really investing in my employees and their needs or in my subjective idea of a good working environment?
• Am I investing primarily in measures that reward the presence of employees (fancy office, company car, gym in the office,…) or in those that create real freedom and empower employees to act independently and take responsibility?
• What factors influence the employee experience? What role do managers, colleagues, new tools, and technologies play?

The first two points point towards a new management culture that focuses on employees and their individual wishes, needs, and abilities, and places the greatest possible emphasis on self-determination in the work context. Asking questions and listening, as well as communication at eye level, are at the heart of this. However, this cultural transformation is not an end in itself, especially since it is still met with resistance in many organizations: Do we really need this New Work, this pronounced focus on people, when employees are doing a pretty good job as it is and things are running smoothly? – Although 70 percent of companies see a need to address the employee experience in-house, particularly as a result of the pandemic, most of them (86 percent) are not yet clear about how they can make the added value that this creates for the business visible (and thus justifiable to doubters within their own ranks).

So how can HR managers show that it pays to keep investing in the EX?

1. Place the same value on your employees as on your company’s customers. Happy “internal customers” lead to happy external customers.

Companies that regard employees as internal customers develop a new sense both for the importance of cultivating relationships internally and for the various “touchpoints” that shape the employees’ everyday work lives and thus their attitude toward the company. Every year companies invest a lot of money into understanding their (potential) customers, to win them over with precisely tailored products and offers, and ultimately to retain them long term. The same should be the goal with regard to the company’s employees. After all, they are the central interface between the company’s product and those who are supposed to buy it, i.e., the external customers. If employees enjoy their work and can carry out their tasks independently and equipped with the best (digital) tools, this has a positive effect on their interactions with customers and thus on the company’s overall success.

2. Make a good Employee Experience not just about employee engagement, but about the quality of the many experiences they have in their day-to-day work life.

To demonstrate the impact of a good employee experience on a company’s success, its role within the value chain must become visible. And value creation doesn’t just begin when the customer clicks an “order”-button. Nor does it end when the customer has paid the invoice. Value creation does not proceed linearly, but rather weaves a network in many directions. This value network has many starting points. For example, when an employee from the customer support team tries to solve a customer problem using the company’s own CRM tool and communicates with his manager in parallel. Here, the quality of the employee experience results from the complex interplay of human, digital, and physical touchpoints:

1. As an employee, do I want to find the best solution because I feel comfortable in my work environment, have a great team, and share the company vision?
2. Does the CRM tool I use run smoothly, is it unstable, or do I have only limited access to information?
3. Am I getting support from my manager in solving the problem?

An everyday situation and already three factors that shape the employee experience – and therefore also the outcome of the conversation with the customer, which in turn influences the customer’s future attitude toward the company, and with that his or her willingness to buy again, recommend the company to friends and acquaintances, and so on. Employee Experience meets Value Chain.

The example shows: Measuring the business impact of a good employee experience requires a comprehensive understanding of the many large and small processes in the organization, both interpersonal and technical, and their impact on the everyday experience of employees. New data is needed that identifies these experiences and relates them to other employee data, such as self-assessment, performance, satisfaction, overtime, etc., classic “engagement data”.

3. Create new realms of experience by people for people within the company.

The simpler corporate processes are, the more measurable they are and the easier positive developments of the company can be traced back to specific actions in the organization. Higher self-efficacy of each individual results in increased effectiveness of the company as a whole. Strengthening this self-efficacy should be the goal of HR and EX-leaders in companies. This requires open structures and opportunities for employees to network as they please, share knowledge, learn from and with each other, and assume responsibility. If these structures are supported and enabled by smart digital tools, every new experience that employees make in the digital space leaves a valuable data trail. Taken together, all experiences then form a kind of data-supported “employee experience footprint” of an organization – an important reference for corporate success and thus a strong basis for argumentation for people managers and HR managers who are committed to people-friendly work structures.

All that costs something. In the beginning, above all, old habits and thought patterns. In the next step, also money. But one thing is clear: There is no better investment than in your employees.