Why Employee Experience Matters More Than You Think

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Most small- and medium-sized businesses embrace an alchemy of traditional business measurements. These include — but are not limited to — profitability, revenue growth, customer satisfaction, adaptability, innovation and creativity. Above all, the customer experience (CX) is carefully monitored.

This fixation on CX is an element of modern business that has trickled down to growing businesses from some of the biggest names across all industries. Earlier in my career, I led the digital experience business at Adobe, and for more than a decade, I was laser-focused on CX as the single most important measure of success. Many others in my former position would repeat the same.

But what if we are all wrong?

The more we understand the levers of success across an entire business, the more convinced I am that we need to look earlier in the process in order to ensure success. It’s time for business and HR leaders to obsess over the employee experience (EX) as much or more than the customer experience.

To understand this better, my company recently surveyed a representative group of over 300 SMB owners to understand how they approach and benefit from EX programs. Although virtually every surveyed leader considered CX important to success, many still failed to embrace the rising importance of EX, struggling to understand the role it plays in their overall business success.

It’s becoming increasingly clear that a meaningful focus on EX will improve business outcomes across all areas of the company. Business leaders can embrace the benefits by developing a deeper understanding of their EX programs.

Understanding the disconnect between employee wants and leadership needs

Our survey further pointed to a simple fact: There is often a disconnect between employers and employees. This creates an “us vs. them” mentality across the organization and multiplies gaps in communication — especially for growing businesses.

Employers generally have to focus on traditional customer-based measurements of success: business performance, customer satisfaction, product innovation and providing exceptional service. On the other hand, employees care about their experiences: flexibility, purpose, open communication, recognition, growth opportunity and pay.

Finding where these values intersect is the key to building strong EX programs. The first thing to eliminate is the us vs. them mentality. Great customer experience and employee experience programs are driven by the same elements: performance management, performance reviews, compensation and career growth.

These outcomes mesh well together because supporting employee career growth could lead to new innovations that delight customers and employee flexibility can help unlock and deliver exceptional customer service. Stressed-out employees are much less likely to deliver great service, regardless of whether the company offers free lunches or an open game room.

Evaluating the benefits of employee engagement

As any HR expert can tell you, understanding and building programs based on the experiences of employees is a complex process. Most companies start with traditional measurement tools like Employee Net Promoter Scores (eNPS) or employee satisfaction surveys.

Although these are important steps to take, companies can’t simply flip a switch and turn on their EX program. The measurements are a good start, but there are things leaders can only understand by looking beyond their survey results.

Leadership should evaluate the feeling around the office. What is the virtual water cooler talk? Are people optimistic about the company and demonstrating resilience when challenges arise? Do employees ask for feedback? Are your company values fully represented and activated?

Employee experience is the foundation on which successful companies can build and scale their business — especially in times of change and disruption. The Covid-19 pandemic era repeatedly pointed to companies thriving because they emphasized EX programs and demonstrated care for their people.

Ultimately, business considerations determine outcomes, and companies that invest in great EX outperform the S&P 500 by 122%. Employees who bring their best selves to work provide inspiration that awakens us to new possibilities and propel our business forward.

Taking the next steps

The employee experience is more than free lunches, perks and offsite parties. Our study pointed to empowering our people, aligning motivations and creating shared values as keys to employee happiness. Today’s savvy employees understand the value of strong performance reviews and growth, even above bonuses and office perks.

As company and HR leaders look to build better EX programs, we recommend starting by asking three fundamental questions:

Does my organization have a clear mission and set of values that are reinforced regularly?
Have I established systems that reduce friction and increase communication for my employees?
How much time do I spend on employee experience versus other work or priorities?

We are in the early days of the EX revolution, but companies must start now or risk being left behind. Big companies like LinkedIn and Meta are investing significant resources in EX programs, and even smaller companies with fewer resources are treating EX with the same consideration as product development.

Tony Hsieh, CEO of Zappos, describes investing in employees this way: “Our No. 1 priority is company culture. Our whole belief is that if you get the culture right, most of the other stuff like delivering great customer service or building a long-term enduring brand will just happen naturally on its own.”

Employees no longer want to just be a cog in a machine. Businesses that seek to understand employee wants and use that knowledge to invest in their people will ultimately mobilize their employees to contribute directly to business success.

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