The Focus on Employee Experience
We want work that is more than just challenging, we want meaning, purpose and an emotional connection to our work and one that gives us opportunities to learn and grow.
—Barry Schwartz Dorwin Cartwright Professor of Social Theory and Social Action Swarthmore College
Engaged employees are a rare breed. Gallup reports only 32 percent of U.S. employees are engaged in their jobs—meaning only one in three workers is psychologically committed to their work and likely to make a positive contribution to their employer.1
Organizations have been focusing on increasing engagement levels because they see the link between employee engagement and productivity. Engaged employees come to work each day with a sense of purpose, leave with a feeling of accomplishment, are more productive, and achieve higher levels of customer satisfaction. Gallup reports that highly engaged employees have higher well-being, healthier lifestyles, and lower absenteeism than their less-engaged or actively disengaged
counterparts.2
Disengaged employees cost U.S. companies over $450 billion in lost productivity per year, while organizations with higher levels of employee engagement report 22 percent higher productivity.
According to Jim Harter, Gallup’s chief scientist, Workplace Management and Wellbeing, “The general consciousness about the importance of employee engagement seems to have increased in the past decade. But there is a gap between knowing about engagement and doing something about it in most American workplaces.”3
However, forward-looking companies from Airbnb to IBM are moving beyond a singular focus on increasing employee engagement to purposefully designing compelling employee experiences, which fuel increased levels of engagement.
Diane Gherson, chief human resource officer of IBM, sees this movement to employee experience
as part of the evolution of the HR function. As Gherson says, “Over the years, the HR function has moved from developing programs to match the competencies IBM needs, to creating a shared service model for optimizing efficiencies and now to designing personalized employee experiences.”
There are several key drivers to intentionally designing employee experiences, including the fact that all generations of employees (not just millennials, born between 1982 and 1993) are approaching the workplace with a consumer mindset. With the rise of mobile technology and a rapidly expanding on-demand economy, employees now expect a similar experience at work to the one they have in their personal life. At the same time, organizations are recognizing the need to create one seamless
experience for both employees and customers.
Gherson explains how HR systems and programs currently stack up against these increasing expectations: “For much of the last decade, HR has been about outsourcing, standardization,
globalization, and self service, all at the expense of the individual employee experience. Regrettably, when an employee interacts with HR, the experience is often a lot more like an experience with the Internal Revenue Service than Zappos.”4
HR needs to focus more on creating one seamless experience that is memorable and compelling and connects to the individual employee on an emotional level. How are organizations doing this?
According to Eric Lesser, research director, IBM Institute for Business Value, “The key to designing compelling employee experiences rests with leveraging analytics to gauge the current employee experience in a similar manner as your company measures and evaluates the customer experience.”
Lesser goes on to say, “Analytics will move a company from just reporting data to developing insights about what is important to employees and creating a value proposition based upon this.”
One interesting example of this is the IBM HR team’s award of a patent to predict retention risk for employees in key job roles. Anshul Sheopuri, People Analytics director, is the point person, leading a team in using analytics and machine learning to calculate employee retention risks. He does this by analyzing the relative importance of several employee risk factors, such as location,
compensation, employee engagement sentiment, and even manager engagement, at the aggregate level for specific countries and job roles. Then it’s the job of the People Analytics team to identify
employee groups in key job roles at risk of finding opportunities outside of IBM and to propose a program of manager intervention to prevent departures. This initiative has been reported to save IBM over $130 million, as measured by the avoidance of the inevitable costs of hiring and training
replacements. The key to the program has been not only the calculation of employee retention risk but the creation of a playbook for managers to use with potential high-risk employees for engaging them in mentoring sessions or continuing learning and development opportunities.
At the heart of the increased interest in designing compelling employee experiences is the
recognition that creating an emotional connection is what will ultimately drive the greatest levels of engagement. A study by Adam Grant, a management professor at the University of Pennsylvania’s Wharton School of Business, reinforces this.5 Grant studied a group of students who were raising scholarship money by calling alumni and asking for contributions. He asked a former student who had benefited from a scholarship made possible by fund-raising to talk to the group of students. Grant found that after the talk, the group raised 171 percent more money as a result of this explicit emotional connection.
Communicating a sense of purpose is at the forefront of the minds of business leaders today. In fact, it’s become central to the public dialogue. A recent study conducted by Oxford University’s Sạd Business School found that public conversation about purpose increased five times over since 1995.
This is reinforced by PwC Next Gen research, a global study of over 40,000 millennials and non millennials that found the emotional connection to work and its purpose drives retention in the
workplace.6 Millennials in this study reported that working at a company with a strong, cohesive, and team-oriented culture was important to their workplace happiness, even more so than non
millennials.7
Employer Rating Sites Put the Spotlight on Employee Experience
Millennials expect employers to think about how their company provides an emotional connection to work. But isn’t that what we all want out of work? A growing number of employer rating sites
promote themselves as making it easier to find the match between what we want as an employee and what the company offers. Employer rating sites have become a global phenomenon, as shown in Table 1.1.
Table 1.1 Samples of Global Employer Rating Sites
The global rise of employer rating sites such as Glassdoor, JobAdvisor, RateMyEmployer, and others has increased the importance of how a company communicates its purpose, vision, values, and culture. These websites allow employees to rate organizations based on such factors as culture, engagement, employee training, and management. Interestingly, 61 percent of job seekers seek company reviews and ratings before making decision to apply for a job.8
Just as TripAdvisor popularized for travel and Amazon.com for books and other products, now everyone, including current, former, and prospective employees, can publicly rate organizations, share their engagement level, and provide specific feedback. On Glassdoor, anonymous feedback is provided by a simple three-point rubric of Pros, Cons, and Advice and a summary rating of one to five stars. For Pros, raters are prompted to “Share some of the best reasons to work at the
organization.” For Cons, raters are asked to “Share some of the downsides of working at the organization” and then are prompted to offer “Advice to management.”9
With job candidates and employees now empowered to provide instant feedback on employers,
we are seeing the “yelpification” of the workplace, where, at any time, employees can rate a
company’s culture and management just as they rate a hotel, restaurant, or movie. In much the same way that marketing departments have become customer-centric, human resource departments are now equally focused on understanding their employees’ needs and wants. This means applying a relentless focus on transparency and responsiveness in the workplace.
As more employees use an expanding set of these employer rating sites, power is shifting from the employer to the employee. The question then becomes what should companies do about this?
Research firm Monitor 360 took a close look at the Glassdoor.com feedback for Starbucks and found some interesting insights. In the world of retail, Starbucks is regarded as a champion of employee engagement, recruitment, and retention. CEO Howard Schultz claims that Starbucks’s relationship with its people and its culture constitutes a sustainable competitive advantage. At the time of this writing, Starbucks had a 3.8 out of 5.0 rating on Glassdoor, compared with 3.3 for Peets Coffee and 3.0 for Dunkin’ Donuts. How did Starbucks garner better relative ratings about its
employee experience? Certainly, Starbucks increased its perks, such as full health benefits for part- timers and tuition reimbursement for Arizona State University’s online courses. But are these the real reasons? Monitor 360’s analysis of over 5,500 employee reviews of Starbucks on the Glassdoor site revealed a number of distinct narratives that employees shared about Starbucks. Many of the
narratives focused on the pride employees feel in working at Starbucks more than the discrete set of benefits offered employees. Of course, they favored the healthcare and tuition benefits, but just as importantly, they were emotionally connected to Starbucks’s mission to “inspire and nurture the human spirit—one person, one cup and one neighborhood at a time.” One of the strongest narratives was stated by a Starbucks employee: “Working here is more than a job—I’m proud to come to work and to serve excellent coffee to my community. My team is fun, the company gives me health and dental, free coffee, and parking, and I have flexibility to pick my own hours.” On the day we checked, another reviewer posted, “The culture of Starbucks is far superior than any other place I’ve
worked.”10 What Starbucks learned from this analysis was that purpose-driven narratives tied to the company mission and values should be consistently communicated across the entire employee life cycle from recruitment to development and engagement.11
In an article for the Huffington Post, Sophie Sakellariadis explains how companies can process the information from employer rating sites and build proper responses, stating, “Companies should consciously design their communication and engagement initiatives around the unique narratives their employees hold to and be responsive in addressing their unique concerns.”12
What can other companies learn from the Starbucks experience?
1. Carefully listen to employees to better understand what motivates employee engagement.
2. Build reviews of your main employer rating sites into your people process. Reach out to
employees who were just promoted or have just completed a new-hire onboarding program and invite them to provide their feedback.
3. Assign a team to analyze the data and provide insights to the organization on actions to take in responding to employee feedback.
4. Use the data from analyzing employer rating sites to inform your HR strategy.
5. Capture content from employer rating sites to audit and authenticate your employer brand so it is real and speaks to prospective and current employees.
The Future Workplace Experience: Five Principles to Live By
While companies are reimagining the “place of work” by providing access to a host of amenities such as gym facilities, subsidized massages, and gourmet food, some are moving beyond just creating
“trophy workplaces,” to focus more expansively on creating what we call the Future Workplace Experience. The essence of this is to integrate all the elements of work—the emotional, the
intellectual, the physical, the technological, and the cultural—into one seamless experience for the employee. This is shown in Figure 1.1.
Figure 1.1 The Future Workplace Experience
What Does Make the Future Workplace an Experience Mean?
What goes into creating compelling employee experiences? Mark Levy, chief human resource officer (CHRO) and global head of Employee Experience at Airbnb, explains: “At Airbnb we bring our vision of belonging anywhere to life. This vision creates a total experience for employees, spanning the food they eat together family style, to our award winning workspace, to the care with which we recruit and train them. For example, our Airbnb space has moved from open space floor plan to a
‘belong anywhere working environment’ where an employee can work from any number of
workspaces: what we call the kitchen counter, the dining room table, or the living room, to work alone or congregate with the folks they’re working with to create this sense of belonging.” The
engagement scores from a recent Airbnb employee pulse survey show the impact of the Airbnb focus on employee experience:
• 90 percent of Airbnb employees recommend Airbnb to a friend or colleague as a great place to work.
• 86 percent of employees state they are proud of the culture at Airbnb.
• 83 percent of employees state they feel a sense of belonging at Airbnb.13
These internal engagement scores are consistent with the public ratings received by Airbnb on Glassdoor.com. According to the Glassdoor ratings, 93 percent recommend the company to a friend, 95 percent approve of the CEO, and the company has a 4.4 overall rating on the 5-star scale.14 What’s interesting here is that Levy is not bearing the sole responsibility for enhancing the employee
experience. His scope of responsibilities reflects his expanded vision, and his role as CHRO and global head of Employee Experience at Airbnb blurs the lines between the functions of marketing, communications, real estate, social responsibility, and human resources.
Levy is responsible not only for typical HR functions such as recruiting, talent management and development, HR operations, and total rewards, but also for “facilities, food, global citizenship, and a secret sauce of community managers called ‘ground control,’ which is the network of community managers who engage with Airbnb employees daily.” The goodwill that these ground control employees generate is the key to improving employee satisfaction and connection to work. As Joe Gebbia, cofounder of Airbnb, says, “Everything at Airbnb is a continuation of what it’s like to be a guest in somebody’s house.”
Taken together, our five characteristics of the Future Workplace Experience tap the full engagement potential of a company’s global workforce.
Emotional Experience: How Companies Provide Flexibility, Purpose, and Meaning in the Workplace
Workplace flexibility, together with being a purpose-driven organization, taps into the core values of what motivates employees to feel connected to their job. Clearly, flexible workplace policies
allowing employees to work when and where they want are fast becoming employer criteria that cut across all generations of employees. According to a survey by online job site Career Builder, the typical nine-to-five job will soon be dead. Career Builder asked 1,000 U.S. employees in fields that typically have traditional work schedules (such as IT and financial services) about their work habits.
The survey found that 63 percent of survey respondents thought a fixed nine-to-five workday would soon be obsolete. Additionally, Career Builder’s chief human resource officer, Rosemary Haefner, says that “about half of the research sample said that they check or respond to work e-mails outside of the office, and nearly two in five said they continue working when they leave the office.”15 All of this demonstrates how work is becoming more of a mindset than a fixed place, time of day, or location.
Phyllis Moen, a professor at the University of Minnesota, and Erin Kelly, a professor at MIT, ran an NIH-funded study to examine the interplay among work, family, and health. In an experiment with a technology company that preferred to remain anonymous, which the researchers called TOMO, they divided workers into two groups. The first group was randomly assigned to be the control group where the workplace flexibility policy was simply “at the discretion of the manager.” The other group, the experimental one, participated in a new workplace flexibility initiative where employees could work wherever and whenever they chose as long as projects were completed on time and business goals were met. Not only were managers trained to be supportive of the new workplace flexibility policy, but they were also provided with a special iPod that buzzed twice a day to remind them to think about the various ways they could support their employees as they managed both their work lives and their home lives. (The special iPods highlights a creative use of technology-driven prompts in the workplace!)
The results of the Moen and Kelly experiment supported the view that workplace flexibility is much more than creating a new policy; rather it is about changing an entire culture. The study found that employees in the experimental group met their goals as reliably as those in the control group.
However, what’s most interesting is that employees in the experimental group reported being happier, sleeping better, and experiencing less stress. This reduced stress level also cascaded to their families and children, who also reported less stress in their own daily lives. And a year following the
experiment, the employees who experienced the new workplace flexibility reported less interest in looking for a new job and leaving the company than the control group.16
The importance of workplace flexibility cannot be overstated. As companies expand into emerging markets and across time zones, the nine-to-five office will be slowly replaced with a work-from- anywhere mindset. But workplace flexibility has to be embedded in the culture rather than be considered the exception or seen as a perk for doing a good job. For companies that want to be
magnets for top talent, workplace flexibility is smart business, as well as an important recruiting and retention tool.
Workplace flexibility is a benefit desired across the generations. According to the Future
Workplace “Multiple Generations at Work” study of 1,800 multigenerational employees, almost one- half of each generation responded that a flexible working environment is very important to them.17 In its “Connected World Technology Report,” Cisco found that workers value flexibility over almost anything else.18 Those surveyed selected flexibility as the second most important factor, after salary, when considering a job offer. In fact, 66 percent of American millennials said they felt that an
organization that adopts a flexible, mobile, and remote work model has a competitive advantage over one that requires employees to be in the office from 9 a.m. to 5 p.m. every weekday.19
While multiple generations of employees expect and want workplace flexibility, employers are seeing the benefits of workplace flexibility as a strategic lever to deliver business results. American Express’s Blue Work program marries work-style preference with workspace. The Blue Work program has identified four types of workspaces: hub, club, roam, and home:
• Hub-based employees have jobs that require face-to-face time in one of the company’s office locations.
• Club employees go into a hub office no more than three times a week, because they either work part time or work some days from another location, such as home, a client’s office, or another American
Express campus. Club employees check into a hub office and are given space to use that day.
• Roam employees are almost always on the road or at customer sites and seldom work from an American Express office.
• Home employees are based in home offices—set up with assistance from the company—on three or more days per week.
As reported in Forbes, American Express’s Blue Work program is not just a real estate program but also embeds training on how employees can be successful as remote workers. Reflecting this, the Blue Work program includes a series of training programs to guide both employees and managers through the productivity hurdles that can accompany the transition to virtual work. Some of the topics included in the training are “How to Use New Technology Tools,” “Tips/Tricks to Be a Mobile Employee,” and “How to Lead in a Mobile Environment.”
The results include a savings of $10 million to $15 million annually in real estate costs and a realization that workplace flexibility is not just an employee perk but a strategic initiative.20
Providing Purpose at Work
Beyond providing choice and flexibility, forward-looking companies are also intent on providing purpose at work. At SunTrust Banks, Inc., where over 26,000 employees work across the southern United States, the company has moved from being mission driven to purpose driven, where the
purpose is promoting financial well-being for SunTrust’s employees and clients. A survey conducted for SunTrust by a Nielsen/Harris poll among 2,049 adults found that 40 percent do not have $2,000 saved for an emergency, a third have no retirement savings, and 70 percent feel a moderate to high level of financial stress.
This lack of financial confidence led to the creation of a campaign known as “Lighting the Way to Financial Well-Being.” For the bank, success goes beyond financial performance to also include the impact the bank has on the lives of clients, communities, and teammates. SunTrust chairman and CEO William H. Rogers, Jr., eloquently sums this move to a purpose-driven company when he says,
“People respond well to a company that’s bigger than itself.”21
Many companies that have traditionally been mission driven are now moving to being purpose driven. Tom’s Shoes became one of the best known brands to millennials through its purpose-driven call to action, where for each pair of shoes sold to a customer, Tom’s Shoes buys a pair of shoes for a child living in poverty. At SunTrust, “Lighting the Way to Financial Well-Being” positions the bank to be a leader in purpose-driven organizations by building financial confidence into its employer value proposition and creating an offering for both its customers and employees.
According to SunTrust’s chief human resources officer Ken Carrig, “SunTrust believes so strongly in the importance of financial well-being that the company sparked a movement, called OnUp, to help people one step at a time build their financial confidence.” OnUp had its debut with a commercial during the 2016 Super Bowl. Before sparking this movement, SunTrust began to fulfill its purpose with its employees first by offering a comprehensive, behavior-changing learning program. “The financial fitness program features eight learning modules that help teammates and their families set