What is employee experience? What does it mean?
Employee experience is a journey that the employee goes through from the moment the employee joins the organisation until the moment they leave. If you think about customer experience, it is a similar concept to following the journey of a stakeholder that the company is trying to retain and engage.
Employee experience is not a component of employee benefits, but rather a holistic experience that makes up the employee journey with multiple touchpoints and stakeholders (i.e. employee’s performance evaluation, employee’s on-boarding process and many more of such experiences).
Why should companies manage the employee experience? And why is this important to the employer and especially to SMEs?
Singapore has the highest employee turnover in the Asia Pacific with close to half of employees planning to quit their jobs within a year based on a recent Workday survey. Employee turnover is a costly affair whereby the bulk of the cost is the time required for existing employees to recruit and retrain new hires.
According to Josh Bersin of Deloitte, there are three components to the total cost of voluntary turnover for each employee who leaves an organisation, and he believes the cost of turnover is 1.5 to 2 times of the employee's annual salary.
The direct cost per hire, which is more visible, is the cost of the new employee’s training and the expense to source for the new employee. In addition, most companies surveyed did not include or calculate the loss of productivity that will cost a lot more. Together, both will outweigh the cost savings from the interim reduction in labour costs.
Unfortunately, he did highlight that more than 50% of executives surveyed would pay attention to the direct savings that would, in turn, increase the company’s profitability.
In conclusion, the cost is conservative given that there are other indirect costs that were not included such as the loss of client relationships, institutional knowledge, employee engagement and previous training invested in the exiting employee.
The loss of these indirect costs is being magnified for SMEs with smaller headcounts as there is higher reliance on each individual employee to contribute towards the overall success of the business.
What can an employer do to improve the employee experience?
There are dozens of ideas to improve employee experience which range from a simple short-term solution, such as improving employee benefits by implementing flexible benefits, to a long-term programme such as creating more learning and growth opportunities for the employees. The only question lies with what will work for your company, since each company operates in a different culture and with different demographics. Employers should find ways to identify what will work for them as one size does not fit all.
Depending on the number of employees, employers could consider conducting a company-wide survey or focus groups with the employees. Below are some of the commonly asked employee engagement statements which will allow the employer to assess the overall employee experience in the company3:
1) I would not hesitate to recommend this organisation to a friend seeking employment
2) It would take a lot to get me to leave this organisation
3)This organisation motivates me to contribute more than is normally required to complete my work
Getting the data analysed by an expert is essential. Otherwise, the company will not be able to optimise the trends and findings from the survey. For example, coming up with a hypothesis based on the highest and lowest percentage of the results is not sufficient. The data needs to remove responses which do not make sense before that to provide a more accurate insight.
The actual work begins in resolving issues that surface through the findings. Some of the common problems are communication, leadership and career progression within the organisation which drives engagement. The survey will be able to uncover the symptoms which pinpoints the actual issue. HR will need to investigate and speak to the ground staff to further understand the problems. The overall report of the employee experience based on the survey will be a good starting point to review the entire employee experience and prioritise segments of employee experience that require immediate attention.
What will happen to SMEs who do not invest in employee experience?
SMEs will continue to face a high turnover which leads to the need of recruiting continually. The employee landscape has changed drastically due to the changing demographics of Singapore’s population and rise in other forms of employment opportunities. The ManpowerGroup 2018’s Talent Shortage Survey reported that 56% of the employers in Singapore are having difficulty filling jobs. The medium-sized companies are said to have the most problem in recruiting.
Nellie Yeoh | Manager | Management Consulting Services | BDO Consultants Pte Ltd
Nellie is a firm believer in cultivating a win-win relationship between the employer and the employee. Prior to BDO, Nellie was a Senior Consultant at ORC International where she explored employee engagement through research programmes such as employer branding, 360/180 feedback surveys, employee journey analysis, etc. Nellie brings along more than 14 years of HR and operations experience. She started her career at the chamber where she gained extensive experience in building strong relationships with different stakeholders within the business community.