Kathleen Vegh works for a company where leaders value engagement so much that they made it a part of her title. As senior manager of employee engagement at Hyland—a software firm based in Westlake, Ohio—Vegh is tasked with strengthening employee relationships and creating a positive work environment to keep the company’s more than 3,200 workers happy, healthy and engaged.
Sometimes that might even mean recognizing that the very concept on which her position is built—engagement—is becoming less relevant.
Over the past five years, Vegh and her team have started looking beyond the typical team-building and worker appreciation events thought to drive employee engagement. Rather than offering cookie-cutter solutions, they decided to take stock of what it’s really like to work at Hyland day in and day out.
“The difference was going bigger, higher, further to say there are so many facets that make up an employee’s experience with the company,” she says. “Engagement can fall under that, [but] experience goes further. It takes into account everything.”
Vegh’s title may not have caught up yet, but her new philosophy is in line with a growing movement within HR. Just as business owners have long studied the customer experience, which encompasses every interaction customers have with an organization, many leaders are looking to build better workplaces by focusing on the employee experience, or EX.
The difference may seem subtle, but the change is not just about adopting the latest buzzword. “Employee experience has come into vogue because it’s such a practical concept,” says Burt Rea, director of human capital consulting at Deloitte. “It’s the day-to-day moments that matter to employees.”
A New Paradigm
Words can lose their meaning—and some experts say that’s just what happened to the term “employee engagement.”
“For most companies, engagement has become the idea of investing in perks like free food and new programs and initiatives,” says futurist and author Jacob Morgan, who wrote The Employee Experience Advantage: How to Win the War for Talent by Giving Employees the Workspaces They Want, the Tools They Need, and a Culture They Can Celebrate (Wiley, 2017). “But that doesn’t change what it’s like to work there. It’s the same culture, the same leadership style; you just put some bells and whistles on it. That wasn’t the intention, but that’s what it’s become, unfortunately.” Morgan spoke last month at the Society for Human Resource Management’s Talent Conference & Exposition.
While there's still debate over whether engagement is a worthy aspiration for companies, one thing is clear: Employees aren’t feeling it. Despite the millions of dollars organizations routinely pour into boosting the measure, a mere 33 percent of workers reported being engaged in 2016 and employee engagement as a whole rose only 3 percent from 2012 to 2016, according to data from Gallup’s 2017 State of the American Workplace report.
‘It’s the day-to-day moments that matter to employees.’
Experts say viewing employees through a customer lens will get companies closer to the results they desire. Impactful EX initiatives focus on employees’ beginning-to-end experience with your company, from their days as a job applicant to their last paycheck and, in some cases, all the way through retirement. “It’s the whole life cycle of the employee, from recruiting to onboarding to how I’m paid to how I interact with leadership,” Rea says.
“It’s like an audit of the current work environment,” says Amanda Andrade, SHRM-SCP, chief people officer at Veterans United Home Loans, a VA loan provider headquartered in Columbia, Mo., with nearly 2,400 employees in more than 20 states. Veterans United is a consistent presence on various “best places to work” lists, a sure sign of an employee experience focus. “[We look at] who we say we are and want to be, where are the disconnects and the strengths,” Andrade says. “Then we make a plan to capitalize on the strengths and fix the disconnects.”
What Has Changed
The EX movement began in the tech sector, which has been competing for highly skilled workers for many years. Now it’s spreading to other industries as the labor market tightens across the board. EX is also an outgrowth of the expectations and demands of modern workers, especially members of the Millennial generation, who won’t hesitate to switch jobs in search of a better organizational fit.
“Today’s workforce has shifted,” says Rachel Barker, product marketing manager for employee experience at Provo, Utah-based software firm Qualtrics, which has 1,700 employees. “We hear stats all the time—like $11 billion in annual losses due to employee turnover and one-third of workers are slated to switch jobs in the next six months. That tells us … we need a new approach.”
Over the years, HR pros have tried myriad initiatives to attract top talent and improve retention, with mixed results. Challenging work and competitive compensation aren’t enough on their own. And freebies and entertainment don’t seem to be the ticket, either.
“You adapt to the perks. They lose their impact,” Morgan says. “A relationship based on gift-giving—that’s a dangerous relationship to be in.” He calls this employee engagement style “Pinocchio’s Island”: It’s the cliché of workplaces with pingpong tables, rock-climbing walls and free food. “Don’t build your employee experience strategy on giving people perks and benefits,” he advises. “They’re a tactic, not a strategy.”
So what’s the secret? A meaningful employee experience breaks down into finding the optimal balance of three areas, according to Morgan: culture, technology and physical environment. It’s what he calls the “employee experience equation.”
Others have slightly different takes on the EX formula. As part of Andrade’s cultural audit approach, for example, she divides the employee experience into the social, emotional and visual aspects of work. Social is about interacting with others, emotional is how one feels about the job, and visual refers to the actual work environment. “When you walk through the office, what does the furniture look like? What message is in the trappings?” she says.
The Employee Lens
But no matter which dimensions you focus on, creating the optimal employee experience starts with putting yourself in your workers’ shoes. Picture yourself as a new hire, a fledgling manager or an employee who just gave birth to her first child. What are your interactions with the company like? Can you get the information you need quickly? Are the company’s communications effective? Is the required paperwork onerous and redundant? Are the processes convenient? All of these routine touchpoints contribute to employee experience.
When choosing technology, an EX approach involves putting the employees who use your tools front and center in your purchasing decisions—which feeds into the creation of an employee-centric culture. By contrast, traditional strategies for selecting organizational systems were largely based on what worked best for the employer’s budget, internal processes or bottom line. “Creating a great cultural environment requires having tools that focus on employees’ needs instead of business requirements and making sure the tools are consumer-grade,” Morgan says.
In addition, EX efforts focus on a continuous flow of feedback and information between leadership and employees. “It’s a more holistic approach,” Andrade says. “The lines are blurring between work and life with technology and flexibility and the way the workforce is motivated.”
HR and other business leaders are often afraid to ask for feedback for fear of being inundated with unrealistic requests and questions they can’t answer. “They’re reluctant to ask because they think that they then have to do all the things [employees] ask for,” Rea says. “They feel like they don’t have all the answers. Employees interpret that as holding back info.”
It’s better to seek input and simply be transparent about what you don’t know, experts say. That said, some ways of soliciting feedback are more effective than others. For example, it’s not a good idea to rely solely on the standard annual employee engagement survey.
Measure What Matters
“Companies are obsessed with getting a high engagement score, but they don’t understand why they’re doing it,” Morgan says. Surveys are often too long (he cites one example that has 115 questions) and capture employees’ feelings only at that particular day and time. “It just doesn’t give an accurate picture of what it’s like to work there.”
One CHRO told Morgan that a surefire way to boost engagement scores by 10 points was to give the survey on a cloudy day one year and a sunny one the next. While that might sound like a joke, there is real research showing that surveys are often skewed by factors that have nothing to do with what they’re measuring. For example, a 2014 study of more than a million online restaurant reviews found that ratings were negatively influenced by poor weather on the day reviews were written, according to a recent article in The New Yorker magazine.
The most successful EX strategies for capturing feedback rely on a combination of surveys; face-to-face encounters with individuals or small groups; and mechanisms for collecting immediate, anonymous and unsolicited feedback at any time.
“We do a lot of surveys, casual conversations with people, focus groups, one-on-ones, stay interviews,” Andrade says of Veterans United’s strategy.
HR leaders at Hyland take a similar approach but zero in on one key question—“How likely would you be to refer a friend to work at Hyland?”—instead of barraging employees with lengthy survey instruments. “That takes all things into account,” Vegh says. Employees can respond to that question at any time year-round via Hyland’s intranet. By getting constant feedback, “we can make changes throughout the year,” Vegh says. The employee engagement team (a segment of the HR department) also meets regularly with top performers to find out what makes them stay, what the company does well and what it can do better.
There are many tools available to automate surveys and analyze data. The team at Veterans United uses some provided by high-end vendors like Great Place to Work and some developed internally on SurveyMonkey. Qualtrics leaders developed their own employee experience survey tool, which they now market externally. And those at Hyland use Net Promoter, the assessment tool the company’s customer service team has used for years, to analyze employee experience.
Remember, there is such a thing as asking for too much feedback. “[Some employers] disengage their employees with all these feedback requests,” Barker says. “The organizations don’t have time to act and improve on anything before the next one goes out.”
EX teams can also use survey tools to drill down on an issue raised in a broader context. For example, when survey results at Hyland revealed that employees were overwhelmed by too many communications channels, the company followed up with a targeted 10-question survey focused solely on communications methods.
At Veterans United, survey feedback from new hires showed that they often felt disconnected during the lag time between accepting the job and their start date. This led the HR team to revamp the onboarding process to include more touchpoints between offer letter and orientation.
One of the worst things you can do is ask for input and then ignore it. That creates a negative employee experience that leaves workers thinking, “Why did you even ask me?” Vegh says.
Commit to sharing the feedback you receive and your plans for responding to it, including how you will prioritize the follow-up. “Let them know, ‘It’s great that you want all these things. We’re going to focus on these two to start,’ ” Rea says. Form cross-sectional workgroups to dig deeper into the issues of greatest importance to your workforce.
To create the best EX, use a variety of methods for sharing information and do it consistently. “We like to switch up our communications style,” Andrade says. For example, her team makes use of Monday morning videos distributed on the company intranet, an internal blog, a closed employee Facebook group, letters and videos from the CEO, and hard-copy “bathroom blogs” posted inside stall doors (talk about a captive audience!).
Hyland’s leaders spend time at every quarterly business meeting reviewing employee survey results and other key data. VPs and department leaders are encouraged to discuss major issues with their teams and close the loop. The message is “Here’s what we heard from you, and here’s what we’re doing about it,” Andrade says.
This is no once-and-done project. Employee experience is not so much an initiative as a methodology. “Every function of HR is impacted by this, but it goes beyond HR,” Rea says. “It’s a shared responsibility between all areas.” And while “employee experience” is the lingo du jour, experienced professionals say the mindset behind the words matters most. As Vegh says, “If you’re truly aligned to build a human-centric environment, you’re going to be successful.
Building a New Ship
One way that experts recommend HR folks get in the EX mindset is to, well, stop thinking like HR folks—or at least the way the function has been traditionally defined. “Never before have we needed HR to not be HR more than we do now,” Morgan says. He emphasizes the need for HR pros to change their focus from transactional functions like compensation, benefits and legal compliance to transformational leadership. “Human transformation is what [HR’s] responsibility is,” he says.
By that, he means “unlocking the potential of the people [and] transforming the organization.” EX is a means to that end. “It’s a notion of mining and extracting as much as you can from your employees,” Morgan says, not in terms of productivity but rather for data on what top performers want—so you can use that information to attract and retain the best talent. “You need to get the pulse of what is going on in the world of work and bring it back to … make some kind of change.”
This won’t be possible without a huge shift in priorities—which is why Morgan recommends HR leaders spend roughly 20 percent of their time on traditional “HR stuff” and 80 percent on “transformational stuff.”
“You’re never going to get anywhere if you’re just patching up holes,” he says. “There’s no transformation in just keeping the ship afloat. You need to move toward building a new ship.”
And who knows? If you follow this advice, your future may even hold a promotion to a new role: senior manager of employee experience.
How to Transform EX at Your Organization
Experts recommend the following six tips for building an employee-centric workplace:
Jennifer Arnold is a freelance writer based in Jacksonville Beach, Fla.