The employee experience: Culture, engagement, and beyond 2017 Global Human Capital Trends

Introduction

In a digital world with increasing transparency and the growing influence of Millennials, employees expect a productive, engaging, enjoyable work experience. Rather than focus narrowly on employee engagement and culture, organizations are developing an integrated focus on the entire employee experience, bringing together all the workplace, HR, and management practices that impact people on the job. A new marketplace of pulse feedback tools, wellness and fitness apps, and integrated employee self-service tools is helping HR departments understand and improve this experience. Through new approaches such as design thinking and employee journey maps, HR departments are now focusing on understanding and improving this complete experience and using tools such as employee net promoter scores to measure employee satisfaction.¹

• Organizational culture, engagement, and employee brand proposition remain top priorities in 2017; employee experience ranks as a major trend again this year.
  
• Nearly 80 percent of executives rated employee experience very important (42 percent) or important (38 percent), but only 22 percent reported that their companies were excellent at building a differentiated employee experience.
  
• Fifty-nine percent of survey respondents reported they were not ready or only somewhat ready to address the employee experience challenge.

A productive, positive employee experience has emerged as the new contract between employer and employee. Just as marketing and product teams have moved beyond customer satisfaction to look at total customer experience, so is HR refocusing its efforts on building programs, strategies, and teams that understand and continuously improve the entire employee experience. Our research has identified 20 elements that bring this together, each of which requires focus and attention from HR and management.²

The problems of employee engagement and productivity continue to grow. Overall employee engagement, measured by Glassdoor data across thousands of companies, is flat year over year.³ This year’s Global Human Capital Trends research shows that organizations’ ability to address these issues of engagement and culture has dropped by 14 percent since last year, illustrating how complex the work environment has become. In several important areas, there is little or no improvement at all. (See figure 1.)

This year’s survey found both challenges and opportunities for improvement across multiple dimensions of the employee experience (figure 3).

Several factors make employee experience a challenge today:

• First, many companies have not yet made employee experience a priority for HR leaders, often delegating this problem to an annual engagement survey.
• Second, while some companies have created the C-suite role of employee experience officer, most companies have not assigned responsibility to a senior executive or team to design and deliver the employee experience.
• Third, siloed HR departments often find it difficult to obtain the resources needed to address an integrated set of priorities, which range from management practices to the workplace to benefits and, often, the work culture itself.
• Fourth, companies need to update their tools to engage employees on an ongoing basis (with pulse surveys at least) to help HR teams and line leaders understand more fully what the talent they employ expects and values. An employee net promoter score is another important tool in this effort.
• Fifth, many companies remain focused on “point-in-time engagement” and have not yet pulled together the disciplines of performance management, goal setting, diversity, inclusion, wellness, workplace design, and leadership into an integrated framework.

A growing challenge

Understanding and improving the employee experience is critical for companies operating in a highly competitive global economy. Providing an engaging experience will help companies succeed in attracting and retaining skilled employees. A strong employee experience also drives a strong customer experience.⁴

As organizations shift to a networked, team-based structure, the employee experience becomes both more important and more complex. People today often have multiple roles with multiple managers. A recent study Deloitte completed with Facebook found that only 14 percent of companies believe their internal processes for collaboration and decision making are working well, and 77 percent believe email is no longer a viable tool for effective communication.⁵

The challenge is not getting any easier. Productivity in the United States is rising by only about 1 percent annually, even as employees are working more hours.⁶ Research shows that the average vacation time taken is down to 16 days in 2016 from 20 in 2000, putting even more pressure on employees seeking a healthy work-life balance.⁷

Companies need a new approach—one that builds on the foundation of culture and engagement to focus on the employee experience holistically, considering all the contributors to worker satisfaction, engagement, wellness, and alignment.

The growing need for a holistic solution

Traditionally, HR has addressed issues such as employee engagement, culture, rewards, and learning and career development as separate, independent programs in individual silos. Each program has a senior HR leader, a set of tools and diagnostics, and solutions to drive and measure change.

The employee sees the picture differently. Starting as potential hires and recruits, employees look at everything that happens at work as an integrated experience that impacts daily life in and outside the workplace, including overall physical, emotional, professional, and financial well-being. Candidates assess future employers from the very start of the talent acquisition experience and make quick judgments about what life will be like for them in the organization, based on how they interact with the enterprise during the recruiting cycle.

This integrated view increasingly leads to employees demanding a holistic, end-to-end—recruitment-to-retirement—experience from their employers, whether they are full-time employees, contingent workers, or even crowdsourced talent. This also requires a radical change in emphasis on the part of employers.

HR and business leaders face both the demand and the opportunity to rethink the roles, structure, tools, and strategy they use to design and deliver an integrated employee experience. Models such as the one in figure 4 represent a starting point to address a variety of issues: meaningful work, the purpose of the organization, employee talent development and growth, rewards and wellness, the work environment, fairness and inclusion, and authenticity among management and leadership.

Getting the design and delivery right

In recent years, we highlighted trends relating to the overwhelmed employee, simplification of work, and design thinking. Developing an integrated employee experience across multiple dimensions will require HR and business leaders to combine insights in all of these areas. Business and HR leaders can leverage the experience of marketing, product development, and sales executives who are working along similar lines to design integrated customer experiences.

Employees expect not only a better-designed experience but new models of delivery. In a world where employees can manage much of their lives on a handful of smartphone apps, they expect every element of their employee experience, from work to development to rewards, to be accessible and easy to use on their mobile devices.

Focus on employee feedback is improving, but not fast enough

Creating a holistic approach to the employee experience demands better tools and programs to capture employee feedback continuously. A new breed of pulse survey tools, performance management tools, and open survey tools is making this possible. Today, 22 percent of companies survey employees quarterly or more often, 79 percent survey employees annually or less, and 14 percent never survey employees at all.

The neglect of regular employee feedback helps explain other challenges companies face today, including shortcomings in driving culture and purpose and providing a healthy work-life balance. This year, only 23 percent of companies believe their employees are fully aligned with the corporate purpose. And, while 84 percent have some program to measure work-life balance, just 23 percent claim their solutions are excellent.

Companies in Nordic countries, the Americas, and Central Europe lead the way, with those in Asia, the Middle East, and Africa still significantly behind.

As one forward-thinking retail executive noted, “We used to prioritize our stakeholders as shareholders first, customers second, and employees third. We now realize we had it backward. If we put employees first, they in turn take care of our customers, and they in turn take care of our shareholders.”

There’s an app for that

An explosion of digital and mobile tools has emerged to help HR design and deliver a great employee experience:

• Productivity and collaboration apps: New tools are moving well beyond traditional email to improve productivity and engagement. Products such as Facebook’s Workplace, Slack, Microsoft Skype for Teams, Google G-suite, and solutions from companies such as Basecamp, Trello, Asana, and 15Five can support collaborative team-centric work and offer engaging platforms for learning, goal alignment, performance management, and traditional HR processes.
• Engagement and feedback apps: New pulse survey tools are flooding the market, replacing traditional annual engagement surveys.
• Performance management apps: A new breed of continuous performance management products that include feedback tools has emerged from vendors such as Reflektiv, BetterWorks, Zugata, Highground, Workboard, and SuccessFactors.
• Well-being apps: A new market of wellness apps brings together competitions, fitness, groups, wearables integration, and micro-learning from vendors such as Limeaid and VirginPulse.
• Employee service platforms: These tools offer an integrated employee experience for transactional and service needs, integrating chatbots and natural language processing with case management, content management, and easy-to-use mobile and web portals.

While all these tools are valuable, the fact that each of these markets is separate illustrates that the focus on end-to-end employee experience is still new. With few integrated toolsets on the market, organizations have to bring together independent HR and technology managers to build an employee experience strategy and program.

The centrality of the employee experience

Looking across all 10 trends we discuss this year, it’s clear that employee experience is a central theme in 2017. Leadership, organization structure and teams, career mobility, learning, diversity, employment brand, and HR services, all affect an employee’s experience.

High-performing companies have found ways to enrich the employee experience, leading to purposeful, productive, meaningful work.

Innovative companies look to employees themselves for inspiration. Cisco, ⁸ IBM, GE,⁹ Airbnb,¹⁰ and many other companies have used hackathons to collect employee ideas and design new approaches to performance management, workplace design, benefits, and rewards. These open, collaborative approaches engage employees directly in designing a “perfect” employee experience.

Many leading firms are incorporating design thinking to improve the overall employee experience. Nike, Commonwealth Bank of Australia, Telstra, Deutsche Telekom, and several other companies have redesigned their onboarding, recruitment, and employee self-service applications. In each case, the company developed a new set of mobile apps, new user experiences, or new service delivery solutions to improve and simplify life at work. ¹¹ HR should lead these conversations.

Companies are now carefully studying the workplace itself, seeking a flexible, collaborative, humanistic environment. Facebook’s new campus is beautiful, personalized, and filled with places to eat, collaborate, exercise, and work together.¹² Apple Inc., Google, LinkedIn,¹³ and workplace design companies such as Gensler,¹⁴ Steelcase,¹⁵ and Leesman¹⁶ have introduced innovative new workspaces that bring together recreation, collaboration, and individual work in novel ways.¹⁷

Lessons from the front lines

Ford Motor Co., with nearly 200,000 employees, is going through a transformation, with a mission to “make people’s lives better by changing the way the world moves.”

With a focus on innovation, Ford is expanding its business model to fortify and transform its core automotive business while growing in the areas of electrification, autonomy, and mobility. These innovations are broad and deep, including investments in autonomous vehicles, mobile apps to facilitate car sharing and parking (FordPass),¹⁸ big data solutions to help people find open parking spaces and faster routes,¹⁹ and “experience centers” to help customers experience all the digital solutions available through Ford automobiles and connected electronics.

These changes, driven by CEO Mark Fields, also require a change in the way executives think about their people. As the company moves from a product to consumer focus in its products and services, it is also moving from a product to employee experience focus in its workforce solutions. While Ford is tackling this across all its core business processes, the HR team is leading the way, looking to deliver high-impact, innovative workforce solutions and experiences that improve workers’ lives. As Felicia Fields, group vice president, HR and corporate services, puts it, “Our mission is to make employees’ lives better by changing the way we think about work, feel about work, and the way we do our work differently.”

For a company so established, global, and complex, this is not easy, and the only way to revolutionize the employee experience is to practice design thinking at scale. As part of Ford’s broad HR transformation initiative (which includes implementing a new global HR operating model and technology platform and focusing on digital HR apps), the company embarked on a global listening tour to understand what is effective and what is problematic in its employee experience.

Over the last year, starting with a three-week global people strategy lab in which HR leaders from around the globe participated—and that included reviews with Fields and the executive team—Ford developed a new people strategy, HR vision, integrated plan, and business case. As part of its efforts to define its vision, the HR team deployed a companywide polling process that let employees contribute ideas, share their experiences, and rate and rank which HR products and services they felt were most important. The company also conducted workshops around the world, attended by more than 200 HR leaders, and leveraged regional focus groups with employees and people leaders across all areas of Ford’s business.

As a result of this broad and open feedback process (this was the first time Ford had done this on such a wide scale), the HR team is learning about what employees really want, what problems and challenges they face at work, and how HR can better enable and empower them in their day-to-day work.

To turn this design thinking process into actionable results, the team then segmented the workforce into three customer groups (employees, people leaders, and business/union/works council leaders), and developed a set of more than 30 customer-oriented “moments that matter” for each of these three segments. These “moments” were developed as personal statements, such as “enabling me to be successful in a new role,” “reinforcing my impact through feedback and development,” and “knowing where I stand and that my perspectives are valued.” Through these “moments,” the HR team is now working to create simpler, integrated, customer-focused processes and tools.

Ford found that many employees felt that people processes were overly administrative, complex, and not always useful in getting their work done. People leaders felt that HR business partners were overwhelmed by operational tasks, negatively impacting the time they could spend engaging and developing their teams. To address these issues, the HR team is now developing products and services that are more integrated and focused on the employee experience, tools that are more intuitive and user-friendly, an interaction model that allows the workforce to interact with HR through multiple channels, and programs that are “fit for purpose.” It is working to simplify everything HR does. All of this is aimed at improving the employee experience and freeing HR professionals to support strategic business needs.

This design thinking is folding into the company’s four-year HR transformation program, which was approved because of its strong alignment with Ford’s business transformation agenda. Ford’s people strategy and the HR transformation are now considered integral to the company’s focus on innovation and a new way of doing business.

Many complexities remain, of course. Ford’s workforce is located in more than 40 countries, each with unique local regulatory needs. Since manufacturing plants and labor relations vary from location to location, designed solutions must be flexible and localized in many ways. The company is shifting its organizational focus from the “matrix” to a “network of teams,” compelling HR to look at new ways to facilitate networks, collaboration, coaching, and career mobility to allow faster innovation. And of course, making processes simple is hard in itself when the company operates on multiple continents and develops a wide range of products, subassemblies, and electronic offerings.

The lesson from the Ford experience is simple: By focusing on the employee experience, HR leaders can improve employee engagement, empower teams and leaders, and develop workforce solutions that will be useful and compelling to employees. As Ford continues to accelerate its transformation into a digital enterprise focused on improving mobility solutions around the world, the transformation of the company’s employee experience will be critical to the company’s success.²⁰

Start here

• Elevate the employee experience and make it a priority: Recognize that the integrated employee experience is as valuable and can have as much (or more) of an impact as the customer experience strategy. Articulate a differentiated employee experience, and ensure it coordinates all aspects of the work, workplace, and workforce experience. Include the concepts of wellness and well-being in your strategy.
• Designate a senior leader or team to own it: Assign a senior leader for employee experience and orchestrate the functions of engagement, learning, career development, organizational design, analytics, and culture into a coordinated team so that HR can focus on the entire employee experience. Programs such as leadership development, performance management, workplace design, and rewards now fall into the domain of the integrated employee experience.
• Embrace design thinking: Study, listen to, and learn what employees are doing every day and discover new ways to simplify work and improve productivity, performance, and engagement. Develop employee personas and use them to develop journey maps.
• Consider experiences for the entire workforce: All segments of the workforce—candidates, full-time, part-time, freelancers, gig employees, and even, often, alumni—will expect elements of the employee experience to be designed to attract and engage them.
• Look outside: Use information from Glassdoor, LinkedIn, and others to spot areas of opportunity and weakness. Visit peer companies and look for fresh ideas about how to redesign the employee experience. Investments in benchmarking generally pay for themselves many times over in productivity and a reduction in turnover.
• Enlist C-suite and team leader support: The involvement of senior executives and team leaders is critical, as daily management and engagement impact the overall employment brand. Senior leaders can be accountable for the employee experience through goals, rewards, and other performance programs.
• Consider the impact of geography: Even though the trend is global, successful approaches will vary by geography. International companies should understand cultural differences in how employees perceive the work experience. Cultures that are more collective or group-focused require different engagement programs than those that are more individual-focused.
• Measure it: Move beyond annual or biannual engagement surveys to regular pulse surveys and open feedback systems. Use candidate interviews, stay interviews, ongoing performance conversations, and exit interviews as ways to build a complete, real-time understanding of the issues your employees face. Consider instituting an employee net promoter score, which yields one number on the value of the employee experience that can be regularly measured and tracked.

Fast forward

In a world being transformed by digital technologies (“There’s an app for that”), increasing transparency (“What does Glassdoor say about us?”), and the rising demand for talented professionals and workers with fast-changing skills, employee experience will become an increasingly important dimension of competing for and engaging your workforce. Employee brand and reputation—the story that employees in the external world tell about your company’s employee experience—will be a critical competitive differentiator. Just as companies now measure customer experience through net promoter tools, social media monitoring, and customer segmentation, so will HR rigorously monitor the health and productivity of its employees. Real-time feedback tools will explode as pulse surveys and always-on feedback systems become commonplace and the definition of employee expands. We will design and monitor the experience of contractors, contingent, and gig workers too.