Why should Employee Experience be part of your 2020 HR Budget?
It’s hard to find a conference for senior HR leaders these days that does not have an employee experience (EX) stream. You can look at it from almost each HR angle, and you will find a very compelling use case for EX management: Employment Value Proposition. Recruiting. Onboarding. Learning. Performance Management. HR technology. HR operations. We can easily build a logical bridge between these core ‘products’ of HR teams offered to the business and the management of employee experience. And all these use cases of EX are so obvious that in our ‘2019 State of EX’ research 90% of HR practitioners agreed that EX is a top priority for their companies’ HR leadership teams. So – is employee experience finally the umbrella under which HR practitioners of the world shall unite? A second data point from our research raises some doubt: In 2019, only 12% of HR practitioners have plans in place to execute their EX priority. So as compelling and uniting as EX may be as a concept – we are just getting started with managing it actively.
Fig 1: Source: TI People research ‘The state of employee experience 2019’, July 2019, n = 521
HR practitioners, our research shows that many intend to build it in to their 2020 plans (‘plans’ being budget and time commitments) and that the foundational idea of creating EX in co-creation with employees (design thinking) will and should be a cornerstone of these 2020 plans.
The 8 pragmatic benefits of Employee Experience…
To support HR teams to justify their EX investments, here are the business benefits we can prove from clients of ours:
Engagement is the result, where very often EX is the cause. So, managing EX enables us (finally) to take effective action on engagement.
For EVP, if we measure the employee experience, we can prove that we deliver against our employment value proposition – and can even link it seamlessly to the customer value proposition.
In recruiting, a better candidate experience will improve our offer acceptance rates and time to fill an open position.
A better onboarding experience will get new hires faster to 80% of their full productivity, and it will decrease the attrition rates in the first 18 months.
A better learner experience will drive self-led, bite-sized learning – a pre-requisite for the huge up- and re-skilling challenge of large companies.
If managers have a better experience with their tasks in performance management, they will likely manage team performance more effectively.
A better end-to-end experience with that encompass new, cloud-based HRIT systems will increase the (mission-critical) adoption of these new systems.
A more effortless experience will give time back to managers and employees, so has a very direct and measurable impact on business results.
From our work we have identified the most impactful ‘moments of truth’ for each of these eight EX benefits to actively manage. Designing these moments (in co-creation with the employees), sharing the design across local businesses, and measuring the EX in these moments will make HR and line manager act in ‘business partnership’ in its best sense.
… and nothing less than engagement and culture
In addition to these eight, there is yet another, more transformative reason to invest in EX in 2020: Engagement and culture. The basis and foundation of these magical moments is the company’s mission, values and culture. The shared and aligned behaviours of the company are what makes it a compelling place to work and brings the magical moments to life in a unique and compelling way. In the past, engagement and culture have given us headaches (and some may even say good excuses for not acting). Here is why: CHROs are held responsible for engagement. It’s in fact their second most common KPI (after cost), and rightfully so. As a result, HR teams are spending a lot of money measuring engagement. But while we can measure it, we can’t actively manage it, because most of the engagement is in the hand of line managers.
Fig 2: TI People research ‘The state of employee experience 2019’, July 2019, n = 521 HR practitioners
From our recent research we know that 92% of HR practitioners agree that while engagement is the result, very often EX is the cause. By actively managing employee experience, we will ultimately, and finally be able to manage the engagement of our employees and managers alike. As we are laying out in this article, the same line of thought holds for culture. If we manage EX at the most important ‘moments of truth’ for employees and managers, we can change the behaviours of line managers owning these moments. It is possible to change the behaviour of these line managers and the way they act. If we can prove with data that managers are creating a bad experience at a specific moment. That proof will make managers change how they act. It is in that sense that managers take on a responsibility for improving EX. And through the behaviour change comes mindset and, ultimately, culture change. Even better is when EX moves all the way to democratising the culture and it is owned by the employees (while facilitated by HR in most companies). This can be done through co-creation and rather than HR defining the solutions, HR will be working with employees and line managers to define the problems, prioritise and then help design the solutions.
Fig 3 How EX has an impact on behavioural change, and culture
Build your case!
And now – HR teams of the world, unite! Build your specific case for investing in the experience of your employees and managers. You can do so either in some of the eight specific use cases above. Or more holistically by managing engagement and culture through the 32 ‘moments of truth’. All you need is a continuous EX improvement model centred around the measurement of EX: ‘Design / Share / Measure / Act’. With it, the business value of EX will drive your HR teams’ budget in 2020.
Online training on building a digital HR strategy
If you’re interested in learning more about how to build a digital HR strategy and what to include in your roadmap, then you might be interested in our online training course on digital HR, where we walk through the critical areas to include in your digital HR strategy in more detail. You can also read more about the WHAT and the HOW of building a digital HR roadmap in this blog post.
ABOUT THE AUTHOR
Volker Jacobs is the CEO and founder of TI People and an Executive Director and co-founder of Insight222 Limited. Volker holds degrees in economics and information sciences, has worked for U.S. and European consulting companies and started his own HR management consulting business that he sold to CEB. At CEB, Volker held a senior management position with a global responsibility for HR consulting and HR technology before co-founding TI People.