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Positive benefits in the new experience economy

While creating a positive employee experience (EX) has been on the agenda of companies for years, the concept – and that of the experience economy in general – has come of age in the Covid-defined working arena

In a time of huge skills shortages, high staff turnover levels and spiralling wage inflation, creating a positive employee experience (EX) is becoming a top priority for employers as they try to keep hold of talent.

According to a report in 2021 by advisory firm Willis Towers Watson, a huge 92% of employers across all industries intend to prioritise EX over the next three years, compared with only 52% prior to the pandemic.

As to what EX actually means, market research and advisory company Gartner describes it as: “The way in which employees internalise and interpret the interactions they have with their organisation, as well as the context that underlies those transactions.”

In other words, it is about how an employer’s day-to-day culture, mores and values translate into each individual staff member’s experience of working life and how they feel about it and react to it. This means getting EX right is important not only to reduce the risk of employees leaving, but to optimise organisational performance (see box below).

The importance of culture and values

Creating a positive EX is not a simple proposition, particularly in a hybrid working environment, due to the many interrelated elements of which it consists.

Andy Brown, chief executive of leadership and engagement consultancy Engage, says: “There’s a ladder of things that matter to people, and nice benefits and a pay rise get you on the first rung in retention terms. But to move higher up the ladder, deeper cultural and values-based considerations come into play, such as how leaders behave and growth and development opportunities.”

Providing tech employees specifically with effective growth and development options makes them 9.4 times more likely to stay put, adds Brown. Having an inspirational company purpose and value comes in next, making retention 7.8 times more probable.

Empowering tech workers to take their own decisions, meanwhile, means they will be six times less inclined to quit, while clear communication and enabling collaboration makes them 4.1 and 3.2 times more likely respectively to remain.

As Alexia Cambon, a research director in Gartner’s HR practice, points out, delivering all of these elements effectively in a hybrid working world involves dealing with a “high degree of complexity as there’s a high degree of choice”. Such choice includes everything from staff working mainly in the office or at home, coming into the office for two or three set days a week to working in a flexible manner in terms of both location and time.

As a result, Cambon says: “It’s why there’s often a certain wistfulness for simpler times when everyone had the same, consistent employee experience, but that’s just not possible any more.”

Therefore, she believes that undertaking segment analyses using people analytics tools to understand, and act on, the requirements of different employee demographics and evaluate related trends is becoming increasingly vital – even though it is an approach that has yet to be widely adopted.

“It’s how you’ll understand where the gaps, tensions and divergences are, which is important to consider when you’re crafting your employee experience,” Cambon says. “You’ll never be able to satisfy everyone 100%, but you’ll be able to identify the ‘moments that matter’ for each segment, which creates more emotional investment.”

Those “moments that matter” are key times and events in an employee’s lifecycle, such as new joiners obtaining their first pay rise or more seasoned workers getting a big promotion.

Crafting the employee experience

Another crucial component in the complex employee experience puzzle is trust. The problem here, says Cambon, is that many employers are facing a “crisis of trust”, which appears to go both ways.

Gartner’s research indicates, for example, that a mere 41% of employees believe their leaders generally act in their best interest, while only 58% feel their leaders trust them enough to work flexibly without abusing the situation.

“There’s a belief that hybrid work creates new tensions, but it’s simply shone a light on tensions that were already there,” Cambon says. “There’s a real trust problem going on in many organisations, but building that up is vital before you can even think about crafting a positive employee experience.”

One organisation that has worked hard to get the employee experience right though is Larsen & Toubro Infotech (LTI). The secret behind creating a positive employee experience is to establish a culture that focuses on staff wellbeing and on enabling each individual to learn and grow, says Sudhir Chaturvedi, LTI’s president and executive board member.

To this end, the company, which employs 47,000 staff worldwide, introduced two philosophical approaches around six years ago: the Zen Buddhist concept of shoshin and the Southern African notion of ubuntu.

The impact of employee experience on sales and profitability

A recent report published by the Harvard Business Review has put some concrete numbers behind something that many of us already instinctively knew: that there is a causal link between employee experience and customer experience, which in turn affects revenues.

The study, entitled Research: how employee experience impacts your bottom line, revealed that revenues in the stores of a global retail brand could be seen to grow by more than 50% (from $57 per person hour to $87) and profits by slightly less (from $41 to $59) if staff were highly skilled, used to internal rotations, skewed towards full-time and had worked for their employer for a while.

The researchers acknowledge that their return on investment calculation is somewhat simplistic and fails to include various costs, including employee experience-related technology.

But they also point out that any organisation with customer-facing employees would do well to realise “they matter immensely to business success” and should not, therefore, simply be treated as “a cost to be minimised”.

To do so, all they have to do to prove it is “collect and connect” appropriate, but all too often siloed, financial and people data and see the evidence for themselves.

The concept behind shoshin is one of having a “beginner’s mind”. This means dropping preconceptions and being open to new ideas and possibilities – an approach that has proved valuable in innovation terms in a company such as LTI that has a “strong engineering culture” and focuses on solving problems, says Chaturvedi.

Ubuntu, on the other hand, is based on the idea of togetherness and that an individual’s sense of self is developed in relationship with others. In other words, all our actions have an impact on other people and on the wider teams, communities and society in which we live and work.

“People can sometimes have an individualised approach, particularly if they’re high performers, but the idea is that this performance means little unless the whole team succeeds,” Chaturvedi adds. “Like shoshin, it’s something that defines our learning culture.”

This learning culture is also supported by means of an internal marketplace that employees can use to exploring possible new work options and alternative career paths.

Shoshin and ubuntu, meanwhile, also form the basis of the company’s “pod model” for project work, which was introduced two years ago and focuses on empowering workers. Between eight and 10 people create a “self-forming” team or pod, which is responsible for its own activities, deliverables, holidays and so on. Each pod is run by a scrum master and team members assume different roles, such as coding one day and software testing the next, depending on what is required to meet their overall goals.

“We hire talented and well-educated people, so we want them to decide how they work and to be more output-focused,” says Chaturvedi. “In the past, people could say, ‘It’s not my responsibility’ if something wasn’t delivered, but now output is their responsibility.”

Enabling a ‘yin-yang’ model of hybrid working

Shoshin and Ubuntu likewise underlie the foundations of the company’s “yin-yang” model of hybrid working. This model is based on three elements: employee requirements centred on demographics and life stage; understanding where it makes most sense to undertake different kinds of work; and how best to meet customer needs.

These considerations were then used to create four personas, which each individual adopts in agreement with their pods to ensure team objectives are fulfilled.

The first is the “work-office”, which covers activities, such as collaboration or training, best undertaken in an office setting. Second is the “client-office”, which consists of those tasks that need to be performed at a customer site. The third persona, “home-office”, relates to employees who want to work from home to concentrate on specific tasks and hitting deadlines. The last one, “hybrid”, is to enable flexibility between working at home, in the office and at client sites.

But to support this kind of approach, says Chaturvedi, “it is very important to have the right technology in place”, although he points out that it does not necessarily need to be “path-breaking” in nature.

For communications, which include the CEO chat and monthly all-hands meetings, the firm uses Workplace by Facebook and Microsoft’s Office 365. Project Canvas was introduced during the pandemic as the project management platform of choice, while Microsoft Teams was rolled out to supplement WebEx’s videoconferencing software, both of which act as key collaboration tools.

As to the secret of getting this approach right, Chaturvedi believes it comes down to clearly defining the company’s “north star” and communicating this mission and purpose clearly.

“But it’s not just about the leadership team being aware. Everyone needs to know what the north stars are and what they mean for employees and the work they do if they’re to truly become entrenched in the organisation,” he concludes.

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