The Growing Importance of the Employee Experience

A global study of HR leaders in nine countries sought to understand what they are prioritizing to meet employee expectations and invest in their success, what obstacles they expect to face, and how COVID impacted their company strategy.

The impact of pandemic-induced changes also highlighted the importance of the employee experience in an organization's sustainable growth and success. For example, ineffective systems and work processes were exacerbated by the pandemic and were a primary driver of employee burnout.

About three-quarters (74%) of HR leaders said their teams are more involved in their company’s strategic planning now than they were before COVID, and a similar percentage (72%) say their company’s senior executives are now more focused on the employee experience than prior to the pandemic.

The COVID pandemic forced leaders to quickly shift their businesses operations to engage with employees and customers in different ways, including a nearly overnight move to remote work for office-based employees, and increasing focus on e-commerce and digital services for their customers.

However, while these changes met the immediate needs of businesses, they were not always suited to be long-term solutions. The majority of HR leaders (87%) say it’s very or extremely important for their organizations to improve their ability to adapt to unexpected events. A previous study of IT leaders saw similar results, highlighting an opportunity for senior leaders to prepare a cohesive, company-wide plan for adapting to increasingly rapid change into the future.

“The disruption of the past few years drove home how critical HR and People leaders are for keeping a business running. They provide stability and support that employees need in times of uncertainty,” said Cecelia Herbert, Principal Catalyst and Dr of Organizational Psychology at XM Institute. “In 2023, HR leaders and organizational executives appear to have a renewed focus on strategic employee experience management, in an effort to adapt to rapid change and realize the value that comes from becoming a more human-centric enterprise.”

The study results showed that efforts to measure employee sentiment are evolving. Engagement has long been a key metric for understanding employee experiences, but a larger share of leaders now say they track well-being (66% do so), inclusion (55%) and whether employees’ experience meets their expectations (55%) rather than simple engagement (47%).

This research also reveals some common pitfalls in employee experience.

• Insights gleaned from employee listening must be met with action. The majority of HR leaders believe that the frequency of employee listening will increase over the next few years, but when asked about the effectiveness of those efforts, there’s a gap between executives and employees. While 83% of HR leaders say their organization effectively uses insights from employee feedback to improve experiences, less than half (49%) of employees say they have seen positive changes as a result of employee surveys.
• Change is a constant as companies adapt to shifting macro conditions, and even though the majority of leaders say their organizations need to improve their ability to adapt, only 25% of them list change management as a focus area for their organization. It is the least common priority for leaders in 2023.
• Managers aren’t getting the support they need to lead their teams as well as continue their own development. Managers play a key role in keeping employees engaged and focused, but just 35% of HR leaders say manager enablement is a priority this year. Additionally, managers may be missing important feedback on their leadership skills as 360 development is the least common tool for employee feedback.
• Employee-focused priorities without processes to accomplish them can create experience gaps. Training and development is a top focus area for HR leaders, which aligns with previous research showing that growth and development is a key driver of employee engagement¹. Talent attraction and hiring is another top priority, but only 41% of HR leaders cite employee onboarding as a priority, which could lead new employees to have worse experiences.

This study was conducted in December 2022 and January 2023 from more than 900 HR leaders across nine countries including Chief HR Officer, Chief People Officer, or senior leaders within the HR function such as directors, from companies with at least 1,000 employees.

Read more from XM Institute: https://www.xminstitute.com/research/global-hr-executives-xm/