The first-ever research into the value of employee experience in Australian workplaces has uncovered some surprising insights
HRD caught up with Lisa Henderson, group executive marketing at Maxxia, and Kim Seeling Smith, CEO of Ignite Global, for a chat about the state of play of employee experience (EX) today – and its outlook for the future.
HRD: What sparked your interest in employee experience?
Lisa Henderson: As a provider of salary packaging and workplace benefits, the importance of keeping staff engaged and happy is something Maxxia understands well. Organisations have been looking for a fresh perspective and new approach to employee engagement, and we’re welcoming the rise of EX as a concept that can provide HR professionals and leaders with a new way of focusing on their employees.
When exploring this idea of employee experience, we realised that much of the existing research was US or global centric. As we’ve discovered through our research, EX is providing many Australian organisations with innovative ideas to attract and retain new talent. That’s why we embarked on our first annual research project, conducted by Ignite Global, with the aim of bringing together insights into what hundreds of organisations in over 20 sectors in Australia are up to in the brave new world of EX.
The 2018 Employee Experience Report is about much more than just data. As a business, we take a practical and resultsdriven approach to delivering value through employee benefits. We wanted this report to highlight real-world examples of EX best practice. In doing so, we hope to set even more HR professionals on the path to success in EX.
Kim Seeling Smith: The reason I love employee experience, or EX, is that it presents a simple solution to a very complex people problem facing organisations worldwide today, and in particularly in Australia. We are staring down the barrel of a skills gap, and every industry needs to find new ways to win the war for talent.
One of the major drivers of this skills gap is our ageing workforce. Australia’s workforce is ageing, and the size of the talent pool is shrinking, which is causing a supply and demand deficit. When you add to that the additional layer of globalisation and technological disruption, we are also facing a shortage of employees with the right skills for the jobs of the future. We are moving away from an era that was primarily focused on routine and predictable work, to one that is focused on innovation. To thrive, organisations need to find employees who have the capability to iterate, pivot and innovate to meet changing customer needs. Those employees are very different to the employees who prefer more structured and predictable roles.
To put this people problem into context, the ABS predicts that Australia is likely to have 1.4 million unfillable jobs by 2025. When you sit and think about that reality, it can be pretty daunting if you don’t know how to tackle it.
Having watched the concept of EX gain momentum overseas and having seen the results Australian organisations are starting to realise in this area, we knew there was a need to bring together the collective learnings so that others could learn from them.
HRD: How did you define employee experience in your research?
KSS: When we began this project, we quickly found that there is no universal definition of employee experience. It varies significantly from organisation to organisation, and, in fact, from person to person. In our view, employee experience requires a holistic approach that starts at job application and finishes at the exit interview. The way we defined it in the report is the lens through which to view every experience and interaction an employee or potential recruit has with an organisation. Everything from the systems to conversations, relationships, benefits and rewards – they each play a role in the day-to-day experience and overall journey for an employee.
There’s a consensus among some that EX has to be some big, audacious goal. That couldn’t be further from the truth. By thinking of EX simply as a new lens, organisations can adjust their focus to address the pressing issues and start to identify some longer-term initiatives.
HRD: Why are Australian organisations starting to embrace the concept of employee experience?
KSS: Through our research, we’ve seen two notable trends that mark the start of the EX journey for organisations. Firstly, organisations that have already reaped benefits in customer experience (CX) are looking at EX as a logical next step. They are already familiar with the idea of journey mapping and looking at their activities through the eyes of the customer. Having seen the positive impact on customer loyalty, they are now applying the same idea to employees.
Secondly, EX provides a new way of looking at employee engagement. As Lisa mentioned earlier, employee engagement has in some ways had its day, and organisations are glad to have a new lens through which to examine the people problem. The magic of looking through a new lens often means that the low-hanging fruit becomes obvious and some very simple ideas come to the surface.
HRD: What’s the state of play for employee experience in Australia today?
LH: What we found is that the vast majority of Australian organisations surveyed – almost 90% – are well aware of EX. Despite this, two thirds of organisations are not having regular dialogue about EX, and only one third are regularly measuring it.
So essentially, what we’ve found is a mismatch between intentions and action. Whilst organisations are highly aware and ready for action, the rubber hasn’t quite hit the road for many. One reason for this is that EX is typically a mid-level priority for organisations, with higher priority being placed on other areas, such as operations, systems, transformation programs and customer care.
Interestingly, what we found is a number of organisations focusing on providing purpose-led benefits as an entry point into employee experience. For example, LinkedIn has introduced a highly personalised ‘PerkUp’ benefit that provides employees with an annual allowance to spend on services designed to improve their wellbeing. Employees pay for their chosen perk – it could be anything from childcare or fitness classes to a regular massage or a cleaner for their home – and then apply for reimbursement up to the limit of their allowance.
We also heard from tech business MYOB, which has shifted its focus from ‘free stuff’ – which has become something of a standard in the tech sector – towards fostering positive working relationships with managers. Whether it’s about flexibility, the day-to-day experience or the amount of performance feedback given, MYOB is helping managers build employee loyalty.
HRD: What did you find were the key contributors to positive EX?
LH: There were two key contributors that came out of the research. Firstly, the competence of leaders and managers. Leaders and managers need the skills to have all kinds of conversations with their direct reports – whether those are coaching or performance conversations. That relationship is key to how engaged or valued an employee feels at work, and we are seeing more organisations focus on upskilling managers.
The second-biggest contributor cited was the job itself. Today’s employees are looking for interesting and fulfilling roles. What’s more, they have come to expect it. Organisations are well aware that they need to work hard to ensure they provide a job that is challenging, and a workplace that is inspiring.
HRD: What is the top takeaway or the biggest surprise that came out of the research?
KSS: What was really surprising to find is that often the simplest and lowest-tech initiatives create the biggest impact. It was refreshing and exciting to see that a super-simple idea could be just as powerful as a more complex or high-tech idea. We saw some great real-world examples of this through our research – from old-school idea jams using flipcharts and Post-it notes, to plain old-fashioned face-to- face conversations.
What also came through strongly is that organisations are overcoming being overwhelmed by focusing on the ‘moments that matter’. Rather than trying to fix the whole world at once, some organisations are being really smart in identifying the interactions or experiences that truly make a difference to the working day of their employees. That’s not to say that the other moments don’t matter; it’s simply a way of distilling a complex employee journey into those key touchpoints. Whether it be the onboarding process or the connection between a manager and their direct report, identifying the key moments can provide more focus.
HRD: How are organisations typically measuring EX?
KSS: Something we found quite alarming is that less than a third of organisations are measuring employee experience regularly. Added to that, nearly two thirds highlighted the need for a significant level of improvement in their efforts. That said, almost all organisations are capturing employee feedback through some form of survey or program. What is measured most is employee engagement and performance, in some cases complemented by ad hoc surveys, life-cycle programs and pulse surveys to gather feedback.
What we also found is that many organisations are taking an ‘always on’ approach to measurement. So rather than relying on just tools and processes we’re seeing the consistent capture of feedback through face-to-face encounters. Organisations are starting to see every conversation as an opportunity to listen in and learn about what employees are facing so they can develop solutions to better support their needs.
HRD: What is preventing more organisations from improving employee experience?
LH: Three common barriers to improving EX came through in our research – and all three are linked to capacity in some way. The top three barriers were conflicting priorities, limited time and insufficient resources, which is no surprise given that improving EX is only mid-priority for many organisations.
What we also found, however, is that knowing what to measure and how to improve EX is seen as a major hurdle by almost half of respondents. This lack of knowing is an issue, and it’s one that we wanted to address in the report, by including practical examples – big and small – of what their peers are doing in this space. We wanted to bust the myth that EX has to be an all-encompassing initiative by showcasing some really clever, yet highly achievable ideas. As we’ve seen through our research, simplicity is often the key.
HRD: What does the future hold for employee experience in Australia?
KSS: There is a resounding desire across the HR profession to increase the focus on EX as a means of addressing the people problem. Three quarters of respondents told us that EX will become increasingly important in attracting and retaining talent.
Having said that, it’s still early days and we don’t expect an overnight evolution. What we expect to see is a slow and steady adoption of EX, with organisations testing the waters with some smaller and more practical bite-sized initiatives. What is very encouraging to see is that organisations are starting to report positive outcomes from EX, such as reduced employee turnover, higher levels of employee satisfaction, and an increase in employee engagement and productivity. Once these successes start to become more widely known, the pace of EX adoption in Australia will gather speed.
To request your copy of the 2018 Employee Experience Report click here.