Here is the video of our founder, Pavla Bobosikova, talking about the importance of improving employee experience during an economic downturn:
Employee experience is a concept that sometimes gets neglected or thought of as “too fuzzy”. However, exceptional leaders know that employee experience directly impacts the business’s bottom line across areas such as productivity, the effectiveness of onboarding, absenteeism, and employee turnover.
It is no secret that exceptional employee experience can help you save money. Low engagement costs the global economy an estimated US$7.8 trillion and accounts for 11% of GDP globally.
As Gallup puts it, “Well-being at work isn’t at odds with anyone’s agenda.” AllVoices offers an engagement calculator that lets companies calculate their estimated savings by improving employee experience at their company. A company of 100 employees can be losing half a million dollars by not paying attention to employee experience, and these are the conservative estimates. Regrettable attrition is particularly costly for most companies and roles. If an employee leaves within the first two years, an employer can lose 50-150% of an employee’s salary.
More importantly, creating an exceptional employee experience can help your company make more money. Companies with exceptional employee experience report 23% higher profits. Why? Three reasons:
Put simply, happy employees make happy customers.
Today's economic environment is leading to a crisis of talent in the workplace. Companies have had to let go of or make drastic changes to the work experience for their employees. These changes can be costly and lead to a poor overall experience for those remaining employees. Creating and maintaining an exceptional employee experience during a time of economic uncertainty is critical.
Employee experience is how employees internalize and interpret their interactions with their organization and the context that underlies those interactions. The different categories of Employee Experience, depending on the school of thought, are DEI, opportunities for growth, collaboration, communication, workload, trust in leadership, alignment with company values, clarity on company direction, and relationship with the direct manager.
Besides the human component that prioritizing people's happiness is an inherent good, a positive employee experience breeds happy employees, which builds a more robust work culture and impacts business performance (Gartner). Employee sentiment also impacts the bottom line. Happy employees are more productive, take fewer sick days, and stay with a company longer. Employee happiness is directly linked to customer loyalty.
Did you know: Happy employees are up to 20% more productive at work.
The list of companies having to do layoffs continues to grow in 2022. In our 2022 State of Layoffs study, we found that North America had more layoffs in Q2 2022 than at the height of the pandemic (Q2 2020). The choice to turn to layoffs again in 2022 results from slower economic growth and rising labor costs.
Layoffs are complicated, and these decisions heavily impact people's lives. Ultimately, they occur because a company has failed to address its position in the current market conditions - which is no simple task.
Difficult times are when the most focus should be on the employee experience, both those who stay and those who leave. During layoffs, three things happen that impact the company, employee morale drops, trust in leadership waivers, and everyone is wondering if they will be affected if a second round occurs.
Better.com is an example of how not to do layoffs. CEO Vishal Garg admitted, “We made $250 million last year, and you know what, we probably pissed away $200 million.” Garg is criticized for his arrogant leadership style and careless handling of the layoffs.
When layoffs are the only answer, they must be done right. The Hard Thing About Hard Things by Ben Horowitz highlights the need for visibility, accountability, and communication when layoffs occur. These traits allow for the cultural continuity required to survive a round of layoffs as a company.
How exactly do leaders make this happen? Prioritize maintaining culture by focusing on clear communication, supporting those impacted, and strengthening the relationship within the remaining team. Your People team and management need to have answers prepared ahead of time. There should be no room for speculation and uncertainty surrounding the circumstances of the layoffs.
Remember that those who are laid off can remain champions of your company if the situation is handled with discernment.
Companies must start investing in tools that will add value by improving the employee experience and ensuring that employees have a voice, even in downturns.
The key is to focus on what matters—not just your company's bottom line but also your employees' happiness and well-being.
Here are some ways you can create an exceptional employee experience during this time of economic uncertainty:
Invest in people processes and tools to collect employee sentiment and understand how people feel about their jobs. Make sure there is an avenue for employees to share feedback with management. Feedback lets you learn what's working well and what could be improved.
Provide opportunities for career development beyond their current roles, so they feel like they're growing within your organization. Growth opportunities help them feel like they're making progress toward their long-term goals and keep turnover low during hard times when people may feel like they need more change than they can at their current jobs.
Give employees regular opportunities to give feedback on their experience working for your company.
Make recognition a constant practice within your organization.
So how do you create an exceptional employee experience during economic uncertainty? Well, you cannot improve what you cannot measure. It helps if you used the right tools (eNPS), had the right processes, and used data to make informed decisions. You also need to be proactive and engage your employees in ways that are meaningful for them.
Employee Net Promoter Score (eNPS) a scoring system designed to help employers measure employee satisfaction and loyalty within their organizations
Based on a customer loyalty score, the Net Promoter Score system from Bain & Company, Satmetrix Systems, Inc., and Fred Reichheld gauges customer loyalty.
A fundamental eNPS score is calculated in the following way:
Question: How likely would they recommend the organization as a place to work?
Promoter = Strongly Agree, Agree.
Promoters are highly satisfied and likely to recommend your organization as a place to work.
Passive/Neutral = Neutral
Passives are employees who are satisfied enough to be content but may not be entirely engaged.
Detractors = Strong Disagree, Disagree.
Detractors are unlikely to recommend their organization, which may indicate employee dissatisfaction.
(# of Promoters - # of Detractors) / # of Respondents = eNPS
An eNPS score can range from +100 (all promoters) to -100 (all detractors).
Learn more about eNPS methodology here.
The best way to build a company culture is to put systems in place that allow people to be successful. As an employee, you want your manager to support you and help you reach your goals. As a manager, you want your employees to achieve their goals to be successful and happy.
Collecting feedback — Using tools like eNPS (employee net promoter score) to gather data about your company.
Acting on feedback — Being proactive with feedback and communicating action plans to employees. Tying action to core values.
Feedback loops— Consistently use quantitative and qualitative data from feedback tools to refine employee experience.
Feedback is extremely valuable. Traditionally, feedback was self-reported data only shared between the employee and the HR team. We are now moving towards embracing passive and active feedback to provide more accurate and rich employee experience insights for leaders.
At WFHomie we are incredibly excited to be at the forefront of this change.
The current economy is a good reminder that the best way to ensure the success of your business is to hire and retain the right people.
The good news is that there are many ways to attract and retain great employees. The bad news is that many companies out there compete for the same talent.
Your people improve your business.
The more effectively you attract and retain top talent, your business will perform better. Even during economic uncertainty, having the right people and a good experience will keep your business thriving.
Use data to improve your people.
There are many ways to measure employee engagement, but what matters most is how engaged employees feel about their jobs and employers. Ask them if you want to know how engaged your team members are!
Begin with eNPS, a cornerstone of people analytics; it is the perfect place to start. Learn more about how to implement this practice and more with WFHomie here.
These tools help identify areas where improvement is needed and provide strategies for addressing those needs.
Happy employees, and engaged employees, will lead to creating better business outcomes for organizations.