How Mature Is Your Company's Employee Experience Strategy?

"The way you treat your employees is the way they will treat your customers."

Richard Branson, Founder Virgin Group

Employee experience (EX) is a C-suite issue today. In the hottest labor market in two decades, CEOs from Jeff Bezos to Mary Barra and Satya Nadella realize the most important stakeholders are not the shareholders, investors, the board, or even customers—it's the employees who power the company. Indeed, our research with close to 1,000 companies across industries and geographies reveals companies that deploy the right EX practices not only succeed in the war for talent but also are more profitable, have more loyal customers, and innovate more effectively.

Source: The Definitive Guide: Employee Experience, The Josh Bersin Company, 2021

Employee experience is a complex, confusing, and complicated maze of practices, processes, strategies, and tools. There are so many issues (and opportunities) in workers' life and work—from the basics like just getting your computer to work properly to interacting with a remote team to finding a sense of belonging and purpose. No one group or function can possibly solve all these issues, so HR, IT, facilities, legal, managers, and executives all must play a role.

Source: The Definitive Guide: Employee Experience, The Josh Bersin Company, 2021

However, getting EX right is not just a matter of surveying employees once a year, defining transition points (aka "moments that matter"), or optimizing digital technologies. Our research looked at 83 strategies and practices aimed at supporting people to do their best and be their best. So, how do you know where to start?

You can’t move forward if you don’t know where you currently stand: all companies are unique, as is your journey toward becoming an "irresistible organization." Through our research and work with companies around the world, we’ve developed the Employee Experience Maturity Model to identify where your organization is at on the maturity curve.

The Employee Experience Maturity Model

Organizations fall into four levels depending on the EX practices they deploy, with Level 1 the least impactful, and Level 4 the most.

These maturity levels are not a function of different industries, geographies, or organizational sizes. Whether your company is a small corner shop in Mumbai or a large multinational technology company headquartered in San Francisco, creating a supportive environment where people help each other is the core response from highly mature companies. Additionally, more successful companies focus the business on mission and empowering equitable growth. Interestingly, four out of five companies have yet to reach the highest level of EX maturity.

Companies at different levels of maturity don't just differ in their EX practices and strategies but also in their overall people philosophy and approach.

Level 1: Transactional Efficiency (32%)

About a third of the overall market is at this level. At this level, employees are seen as a replaceable commodity: a cost factor.

Level 1 companies are focused on creating a transactional relationship with their employees—an exchange of work for money. When the organization sees a direct cost impact, it removes barriers from the employee’s work life, but without much consideration for the individual that’s behind the job description.

Telltale signs of Level 1 companies:

• Employees work in siloes and compete with each other.
• HR plays the role of policy enforcer and legal police.
• Technology is used as a tool to automate transactions and is thrown at people randomly
• Leaders focus primarily on minimizing cost and maximizing financial success.

Level 2: Supportive Environment (23%)

One in four companies has made the switch to creating a supportive environment. Companies at this level consider employees friends and family.

In Level 2 companies, employees trust leaders, help each other, and communicate openly. Yet these supportive actions often ignore the broader business context and can sometimes come over as “nice” rather than impactful because they lack an overarching purpose.

Telltale signs of Level 2 companies:

• Employees work together well and minimize conflict.
• HR functions as the helper for employees and managers.
• Technology helps enable employee collaboration and communication.
• Leaders focus on financial performance and customer success.

Level 3: Purpose-Driven Business (25%)

One in four companies are at Level 3, where employees are seen as the key source of competitive advantage.

Organizations at this level get direction from the very top—the CEO—to align around a powerful mission and purpose that inspires people to do their best. The values of the company resonate in every interaction, including a strong leadership model aligned around living those values every day.

Telltale signs of Level 3 companies:

• Employees work hard to solve customer problems.
• HR's role is to power employee productivity and grow leadership capabilities.
• Technology serves as a support system to power people's work.
• Leaders are accountable for financial, customer, and people success.

Level 4: Equitable Growth (20%)

One in five companies is at Level 4, treating employees as individuals who will bring future sustainability and success through their creativity and innovation.

When companies allow people to be who they are, value differences, encourage learning from mistakes, and enable people at all levels to grow, they empower people to be their best. Organizations at this level can move quickly, work together well in teams, and unleash creativity and innovation.

Telltale signs of Level 4 companies:

• Employees bring creative new solutions for future business issues.
• HR serves as an enabler of innovation and experimentation.
• Technology enables personalization, growth, inclusion, and a sense of belonging.
• Leaders balance financial, customer, people, and innovation outcomes effectively.

The More Mature, the Better the Outcomes

The steps to advance in maturity are not small tasks or easy fixes. Instead, these are cultural and systemic changes that can take years, and they require actions from business leaders and HR, as well as building up HR capabilities and technologies. But they really matter to outcomes.

Outcomes increase most significantly at different transition points of the maturity journey:

• Business outcomes (financial performance and customer satisfaction) improve most with a collectivist, collaborative, and supportive approach introduced at Level 2, because people work together better to deliver great customer service and accomplish goals
• People outcomes (engagement and retention, perception as a great place to work, and a sense of belonging) improve most at Level 3, because the sense of purpose inspires people to do their best.
• When people can grow in an equitable way and learn from mistakes at Level 4, innovation outcomes (change adaptability and effective innovation) are much better—making the progress sustainable.

Where to Go Next

The Definitive Guide: Employee Experience reveals our research findings, the EX Framework, the 15 practices that really matter, the characteristics of each maturity level in detail, examples and case studies, as well as next steps and specific actions to move up in maturity. There is also a special section on technology.