In the era of an extensively distributed workforce, investing in employee experience isn’t just a best practice; it’s critical to the long-term success of your organization.
What is employee experience? Simply put, it is the sum of all experiences an employee has with their employer over the duration of their relationship. It includes everything from recruitment and onboarding to career development and employee exit.
A negative employee experience translates to increased employee churn, reputational brand damage, lower customer satisfaction (CSAT) scores, and poor bottom-line results. On the other hand, exceptional employee experience drives revenue and enables employers to hire and retain the best talent. A 2021 Employee Experience survey conducted by Willis Towers Watson shows more than 9 in 10 (92%) employers indicate that enhancing EX will be a priority over the next three years— up from 52% prior to the pandemic.
Workforce dynamics have entirely transformed over the course of the pandemic, and hybrid work is touted to be the new normal— a world where some employees will return to the office while others will continue to juggle between their homes and the office. Over the past year, organizations have gauged the struggles of working remotely and their impact on employee engagement. In turn, they have started investing in employee experience platforms. Analysts size the nascent employee experience platforms market at $300 billion in annual spending.
What is the return on investment (ROI) on employee experience platforms? How much is it worth?
The answers to these questions lie in measuring ROX. Return on experience (ROX) is a new metric that has recently grabbed the attention of the C-suite leaders. ROX measures the various factors that have a direct influence on employee experience.
Let’s explore further.
An employee experience platform is a unified portal that integrates powerful tools for communication, collaboration, knowledge mining, learning, and well-being within the everyday workflow— bringing the right information to the right people at the right time.
As discussed above, the ROI on employee experience platforms is measured in terms of ROX. ROX delves deeply into the employee experiences your organization offers and helps gain control over employees’ relationships with your brand.
With a more significant insight into the tangible results that employee experience platforms deliver, leaders can make intelligent and more informed investments into improving the platform and boost bottom-line results.
Employee experience matters because all of the individual moments of an employee’s experience play a role in how a worker feels about an employer’s purpose, brand, and culture. These feelings directly affect employee engagement, retention, performance, and development.
Here’s looking at the returns that a well-designed EX platform and positive employee experiences can accrue for organizations—
Every new hire is a long-term investment, from the cost of recruiting and onboarding to the millions spent on training. Indeed, the price of losing an employee to voluntary turnover is high and significantly affects the company’s bottom line results.
Working from home has had a detrimental impact on the emotional and mental well-being of employees. Gallup’s research revealed 36% of employees felt disengaged at the workplace, and 13% felt actively disengaged (i.e., they shared their miserable experiences and unhappiness with colleagues).
Disengaged employees are not loyal to their organization and are at a higher risk of quitting soon. On the other hand, a highly engaged workforce can reduce a company’s turnover rate by 25-59%.
Customer and employee experience is truly interlinked. An engaged, motivated, and highly enthusiastic workforce is likely to serve customers far better. Gartner also advocates the concept of total experience (TX)— which combines multi-experience, customer experience, employee experience, and user experience to transform business outcomes.
In a survey conducted in March 2020, 90% of consumers said it is important to them that brands take care of their employees and treat them well, even in tough times.
Moreover, in a study by Forrester Consulting of 900 global HR decision-makers, 75% said their employee experience initiatives had improved their ability to provide a good customer experience.
Investing in employee experience simplifies recruitment and helps organizations attract the best talent.
Employer rating sites (e.g., Glassdoor) and positive word-of-mouth identify companies that value employee experience. Additionally, highly engaged employees refer skilled people to the company, helping the organization save recruitment costs.
Satisfied employees work harder (91% vs. 73%), stay longer (87% vs. 66%), and recommend their company to job seekers (84% vs. 59%) than their less satisfied peers – leading to better bottom-line results for the company.
The Forrester research, as mentioned earlier, reported 62% of HR leaders seeing a positive impact on brand reputation and 53% observing an improvement in competitive differentiation.
Leaders can generally correlate referral volume to CSAT metrics like improved engagement and better Net Promoter Score (NPS).
Employee experience platforms empower employees to do better quality work that results in lower costs. The same Forrester Consulting study found that 38% of the respondents reported improvements on cost savings KPIs, and another 50% said that employee experience initiatives helped them hit their growth targets. Moreover, 77% experienced increased revenue, and 61% reported improved profitability.
Moreover, as discussed earlier, improved employee experience drives customer satisfaction and may help attract new business to the organization. An analysis by Aon Hewitt says that for every 1% increase in employee engagement, organizations can expect to see an additional 0.6% growth in sales.
In a hybrid working setup, employees must process significant amounts of information daily. Information overload is one of the most pressing issues in today’s highly digitized business landscape.
Research by Mckinsey shows employees spend 1.8 hours every day— 9.3 hours per week, on average, searching and gathering information. When calculated for a very large organization with thousands of employees, this amounts to a significant amount of man-hours lost in unproductive work.
Employee experience platforms provide cognitive search engine functionality that connects all internal and external apps together to help employees access relevant organization-wide information from within the portal.
Intelligent search engines display personalized content recommendations and smart results based on the user’s role, location, interests, and past activities— increasing employee productivity and efficiency and delivering huge cost savings and returns on investment.
80% of the information generated by businesses is unstructured and gets locked in siloed and disparate tools. Often, employees spend hours trying to find or recreate this information— leading to an enormous loss of productivity and under-utilization of potentially valuable data.
Employee experience platforms provide knowledge mining tools that leverage AI to ingest, enrich, and explore unstructured data. Such tools simplify the discovery of unstructured knowledge, understand data better, and improve search relevance— helping knowledge workers increase productivity, delivering higher returns on investment in EX platforms (ROX).
ROX (%) = Value of benefits gained from investment in EX / Cost of investment in EX initiatives X 100
Let’s take a simple example.
An organization invests $100k to enhance employee experience and boost loyalty. As a consequence of this investment, they achieved 15% reduced voluntary employee turnover, saving $65k in reduced onboarding costs and higher productivity.
Moreover, the organization observed a rise in employee satisfaction (ESAT) scores by 2 points— equalling $50k more revenue.
In this case,
Organizations with more advanced technology and organizational practices see a return of 3.73% on their EX investments compared to a return of just 2.24% from counterparts with less mature EX practices.
At Acuvate, we help clients deliver a positive employee experience and drive ROI with our autonomous SharePoint intranet called Mesh 3.0.
Mesh is a digital employee experience platform that hosts a plethora of powerful features under one roof. These include –
These capabilities help remote employees communicate and collaborate seamlessly, retrieve relevant information at the right time, receive personalized news and updates, access organization-wide learning resources, connect socially with peers, and align themselves to the vision and goals of the organization.
As a Microsoft Gold Partner, we help clients implement VIVA, Microsoft’s employee experience platform, and create wholesome, end-to-end engagement in Teams.
VIVA empowers people and teams to be their best from anywhere and consists of four modules—VIVA Connections, VIVA Topics, VIVA Learning, and VIVA Insights.
As Microsoft Teams has become the primary place to collaborate for employees worldwide (145 million daily active users), VIVA Connections provides a gateway for organizations to deliver Mesh 3.0 to employees where they already are, i.e., Microsoft Teams. In short, Mesh 3.0 integrates with VIVA via VIVA Connections to deliver holistic employee experiences.
Mesh 3.0 also complements the other three modules of Microsoft VIVA and brings together knowledge, learning, and insights on a unified platform.
To know more about Mesh 3.0, please feel free to schedule a personalized consultation with our experts.
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