How does the employee experience affect customer experience?

PTP defines GOAT CX as delivering experiences that are intentional and increase the connections and relationships between the customer and the brand. This installment of our “Achieving GOAT CX” series is dedicated to the employee experience (EX). 

According to a global survey by Willis Towers Watson, just 52% of companies indicated that EX was important prior to COVID. After COVID, that percentage jumped to 92%.¹  This significant increase in the prioritization of EX makes it well worth our time to examine this topic. 

Let’s begin by defining EX: “Employee experience refers to how employees perceive and interact with their organization at every stage of their employment. It begins with recruitment and onboarding, continues through daily work, development opportunities, and workplace relationships, and ends when an employee leaves the company. It is a holistic approach that includes not only tasks employees perform but also the environment, technology, policies, and culture that shape their work life.”² 

What Factors Contribute to the Quality of an Employee Experience? 

Most experts agree on the following major components that contribute to how valued and supported employees feel in their jobs: 

• Culture and Work Environment: The culture of the organization, how inclusive that culture is to the employee, and physical/virtual workspace.  

• Leadership and Management: Trust, respect, fairness, and effective leadership. 

• Technology and Tools: Access to the appropriate tools and systems to enable performance. 

• Learning and Development: Opportunities for continued growth, training, and mentorship. 

• Recognition and Rewards: Acknowledging achievements through perks, salary, and other incentives that foster motivation and a sense of purpose.  

• Work-Life Balance: Flexible arrangements that include support for personal well-being.   

Now that we have defined EX and identified the factors that determine EX quality, let’s examine WHY it is important to ensure that employees have a positive experience that effectively addresses these factors. 

Why EX Matters 

I have been involved in evaluating the customer experience of major firms for a very long time. My approach was always to begin these engagements by sitting side by side with Contact Center agents, listening to their calls, and observing the processes they needed to follow to fulfill the customers’ needs. Sometimes, they had to overcome major gaps in workflow, information, training, and direction to do their work. 

One of the major findings of this approach was that these people, who are on the frontlines, had an incredible insight into the customer — their expectations, desires, needs, frustrations, and pain points. Despite their invaluable in-depth knowledge, in many cases, organizations saw these people as a “necessary expense.” Very rarely were they recognized as a treasure trove of customer information, and very rarely were they paid the money that reflected their value. 

With that context, let’s examine why EX really does matter and why the percentage of companies who have recognized this fact has grown exponentially in recent years. But first, we need to consider the difference between EX and employee engagement, as you will find both terms used in the remainder of this blog. 

In many cases, the terms are used interchangeably, but according to IBM, there is a distinction between terms, as follows: “Employee experience covers the holistic relationship employers and employees have across the entire employee lifecycle. Employee engagement is more narrowly focused on connecting with employees, helping to ensure that they are happy at work and committed to their jobs. As such, “employee engagement should be considered a component of employee experience.”³ 

Now that we understand the terminology, let’s list some major reasons why EX and “engagement” are important. You will see that many of these factors absolutely impact the customer experience. 

• The performance of “engaged” employees translates directly to better customer service. Why? 
  • They are motivated to do excellent work and take pride in doing so. 
  • They see beyond their role and understand that there is a deeper purpose — that being to contribute positively to the customer experience. 
  • They feel supported and empowered to resolve issues and deliver relevant support. 
  • They feel a commitment to the organization and the customer to deliver excellent service. 

Bottom line: A culture that promotes “engaged” employees will invariably lead to increased customer satisfaction, and ultimately, brand loyalty. 

• Employee retention and recruitment: Employees who feel valued and supported are less likely to leave a company. On the surface, this may not seem like a big deal, but the truth is that companies spend a lot of time and resources on recruiting, hiring, and training new employees. According to a Gallup study, “the cost of replacing an employee is 50% to 200% of their annual salary.”⁴ In addition, a company that is known for its excellent EX environment is more likely to attract top talent. 

• Increased productivity and efficiency: Gallup also revealed that “companies with engaged employees have 21% higher profitability, while also having 17% higher productivity compared to those with disengaged employees.”⁵ 

Building a Positive EX/Employee Engaged Culture 

Top organizations invest in EX and have a clearly defined strategy and playbook to ensure that EX is a focal point for leaders. Some important factors that should be incorporated into such a program include: 

• Clear Communication: Transparency and making sure employees are knowledgeable about company goals, changes, and updates. Encouraging team collaboration and communication through team-building activities and cross-departmental projects is also part of clearly communicating with employees. 

• Effective Development and Training: This will require investment, but the results will more than outweigh the applied resources. Providing opportunities for employees to learn new skills and to advance their careers through programs such as “on-the-job training,” mentoring, and tuition reimbursement should be considered. 

• Employee Recognition and Rewards: These should be focused on making the employee feel valuable and noticed. Rewards such as bonuses, recognition programs, and growth opportunities through training, mentoring and tuition reimbursement should be considered. 

• Employee Wellness: Physical and emotional wellness are important and must be considered in any program to enhance EX. Promoting a positive “work-life balance” is also important. 

• Encouraging Employee Feedback and Input: It is critical to create a culture where employees can feel comfortable and encouraged to share thoughts and ideas. As you do this, make sure that the employees see that their thoughts and ideas are considered valuable and actually inspire change. Bottom line: close the loop, otherwise, the ideas will dry up quickly and have a negative impact on engagement. 

• Foster a Positive Work Culture: Activities such as team building, transparent communication, and building a management team that supports the employees will contribute to such a culture. 

• Offer Competitive Compensation and Benefits 

While this list is not all inclusive, it is a great start. 

Does Technology Have a Role? 

It sure does. EX efforts could fail if employees don’t have the proper tools to accomplish their work successfully. Several types of tools should be considered and evaluated, including: 

• Effective AI and generative intelligence tools to allow for predictive insights and personalized customer and employee interactions. 

• Consistent, transparent, and robust content management systems to drive personalized and targeted experiences. 

• Business analytics tools to enable companies to gather employee and customer data can provide valuable insights. It is important, however, that these tools will work across channels so that all relevant data is captured. 

• Where appropriate, employing digital platforms to promote employee and customer self-service can enhance satisfaction and productivity. 

Summary 

We have defined EX and employee engagement and examined the factors that contribute to building a positive environment that promotes success. We have also looked at why these matter. What is the bottom line? What have studies of EX and CX found? Quite clearly, there is an inextricable connection between the two. 

When employees are engaged, motivated, feel supported and valued, they are absolutely more likely to carry that into their interactions with customers. When customers experience that level of employee engagement, they are more likely to be satisfied, resulting in a high degree of brand loyalty.  

Do companies need to invest in EX? Absolutely! Should they tie that investment ultimately to enhancing CX? Absolutely! 

¹ https://www.betterup.com/blog/employee-experience 

² https://auroratrainingadvantage.com/human-resources/employee-experience-comprehensive-guide/#:~:text=What%20Is%20the%20Employee%20Experience,workplace%20from%20the%20employee’s%20perspective. 

³ https://www.ibm.com/think/topics/employee-experience#:~:text=Employee%20experience%20is%20a%20holistic,as%20well%20as%20job%20satisfaction. 

⁴ https://www.gallup.com/workplace/650174/employee-retention-depends-getting-recognition-right.aspx#:~:text=Turnover%20is%20expensive%20for%20organizations,losses%20in%20morale%20and%20knowledge. 

⁵ https://www.gallup.com/workplace/285674/improve-employee-engagement-workplace.aspx#:~:text=10%25%20higher%20customer%20loyalty/engagement,%25%20higher%20organizational%20citizenship%20(participation