How to convince your CEO to invest in Employee Experience

“Enhancing the Employee Experience, leads to an enhanced Customer Experience, resulting into (financial) business results.”

We hear it all around, we feel it makes sense, and yet, we are not able to convince our CEO - or CHRO - to seriously invest in this. Struggling with building your business case for Employee Experience (EX) is common, as EX is often portrayed as a fluffy concept or dismissed as a one-off well-being program. Yet, organizations who are able to run the show with highly engaged employees, experience 147% higher earnings compared to their competitors (Source: Gallup).

Throughout my start-up- and corporate years, I have been looking at experience from all different angles. From optimizing guest experience during my hotel management studies, to building experiences for entrepreneurs in the co-working space, to enhancing employee experience with my corporate clients.

In this article I would like to share some tools on how to build a business case for EX, demonstrating its added value to your business to engage your CEO.

Defining Employee Experience.

Let’s start with a clear definition of what we mean when talking about Employee Experience, to get rid of the fluffiness around it:

"Employee experience is a collection of impactful moments between an employee and the organization. These perceptions influence employee behaviors and ultimately an organization’s economic value.”

Employee's perceptions influence employee behaviors and build memories, which drive loyalty and ultimately an organization’s economic value. Remember your first day at work? Remember your first performance review? Your first real failure? The collection of all these impactful moments forms your employee experience. These moments can be positive as well as negative.

The Experience Gap.

One of the biggest trends that we are seeing in the market when it comes to experience, is the experience gap. Think about your own life outside of work, and how you are constantly being treated like a customer. Companies go all out to design the best experience for us. Ordering transportation, food, clothes, it is all just 1-click away. Our standards as consumers have become so high that we stumble upon difficulties in the workplace. Not everything in the workplace is just 1-click away. Not everything is beautifully lined up in one virtual account, with a dashboards and chatbots to help us navigate.

Employee Experience is inseparable from Customer Experience.

Employee experience is inseparable from Customer experience. EX drives employee engagement which has been shown to result in positive talent, customer and business performance outcomes.

Examples of drivers of EX are: recruitment opportunities (happy employees tell their friends), employee retention (happy employees stay – saving a lot of turnover costs), employee productivity (happy employees are motivated and engaged and go the extra mile). These behaviors affect your end customers, and results into better service delivery, stronger customer connections, and customer satisfaction & retention.

Positive customer results lead to the following business impacts: brand reputation (happy customers spread positive word, especially online), brand loyalty (customers choose to stay loyal to you), and financial outcomes (saving costs of losing customers, increased sales).

EX drives engagement.

Highly engaged employees are more productive, stay longer and increase customer satisfaction. Engaged employees are four times ore likely to stay at their job (Source: Gallup). Which is all great, but in the end...let's face it, if you want to convince your CEO, you'd better come with numbers. Organizations with highly engaged employees experience a 3-year revenue growth rate 2.3 times greater than average (Source: UNC Kenanflager Business School). Now that's something to bring to your CEO.

Embedding Employee Experience into organizations start with a shift in mindset.

"Could you imagine a marketeer not knowing about an active consumer for 14 months?"

So why does HR often not know much about her customers? This question was introduced to me by team lead in Belgium, Luk Smeyers, and I use a lot in conversations around EX, because it enables the right conversation. We need to shift the HR focus from becoming process-oriented, towards becoming employee-centric. Embedding EX into organizations start with a shift in mindset. I like this question because it really triggers HR to ask themselves; how much do I know about my customers? And how much do I know about their needs? HR needs to start thinking beyond their demographics. Your customers cannot simply be divided by gender, age or tenure. A group of people between 25-30 years don’t have the same needs. You have young parents, high performers, people who live far from the office. All of these segments require different attention and needs.

Making the link between EX and business performance tangible.

During one of my client projects, the CHRO asked us to make the link between EX and business performance tangible, to start a conversation with his CEO. Finding a direct correlation between these too gigantic concepts is - let's say the least - difficult. Some say it's impossible. We cannot simply take ALL external factors that impact business performance into consideration. So, we then looked at the data that was available. We had access to annual engagement surveys, which we linked to turnover data. This way we were able to find correlations. Why was this so important for the CHRO? Because now he had a case to bring to his CEO. Your CEO is probably not sensitive to ‘fluffy’ concepts, you need data to back up yourself and your ideas.

Take a look at your own organization and do the math.

Developing a solid business case for EX requires you to focus on the data. There are plenty of sources out there backing up the fact that enhanced EX results into enhanced business performance (e.g. Bersin, Gallup). Yet, to really trigger your CEO into investing in EX, take a look at your own organization and do the math. If highly employees are indeed four times more likely to stay at their jobs, what turnover costs would you save? You can easily get an estimation of your turnover costs by using a formula - these can be found anywhere online.

To conclude, these are the key items to include in building your case:

• Having your employees being treated as customers outside of the workplace, means you as an organization need to avoid the experience gap with the workplace.
• EX drives engagement, resulting into higher productivity, retention, customer satisfaction and revenue growth.
• Use data analytics to make the link between EX and business performance more tangible for your organization (e.g. linking engagement scores to turnover rates).
• Calculate the costs that your organization could safe and could gain from investing in EX by using formulas (e.g. turnover costs).

Have you managed to convince your CEO? In my next article I will share tips and tools on how you can start tomorrow, despite your current EX maturity level.