A Critical Moment for the Employee Experience

Community Blog
Written by Jason Larson

APRIL 27, 2021

The decade since the financial crisis has seen a slow but steady tightening of the labor market, the growing importance of highly skilled labor, and an ever-hotter war for talent. In order to compete for increasingly scarce workers, employers couldn’t afford to ignore the employee experience as they sought the talent they needed to execute their business strategies. By the end of the decade, according to Gartner, organizations spent over $2,400 per employee annually on the Employee Experience (EX). 

We are now in a different moment. With continued unemployment claims, reductions in demand, and uncertainty about the trajectory of a potential economic recovery, will businesses view investments in employee experience as “nice to haves” that have to go on hold? Or, even worse, as something that’s no longer necessary as employees have fewer opportunities elsewhere?

The answer, we suspect, lies in how an organization’s leadership viewed the employee experience before the crisis. In Evanta’s surveys of our CHRO communities’ governing bodies, and in our conversations with HR leaders around the world, CHROs have told us that one of their top priorities is creating an employee experience that contributes to business and revenue growth. But their peers in the C-suite don’t always have the same view. These leaders tend to fall into two camps in terms of their approach to EX: Those who view it as a tool unleash their employees’ innovation and productivity, and those who see it as a costly but necessary investment to attract and retain labor in the face of stiff competition for talent.

Where C-suite buy-in for investing resources in EX initiatives was predicated solely upon the need to attract and retain talent in a competitive environment, CHROs will face a tougher battle to convince their organizations to stay the course with regard to EX – to say nothing of doubling down on it. But, even in the event that unemployment remains high during a prolonged economic recovery, EX remains critical to organizations looking to stay competitive.

This is because the impact of EX goes well beyond talent attraction and retention. Gartner research shows that employees who are fully satisfied with their work experience are 52% more likely to report high discretionary effort and are nearly 70% more likely to be high performers. The experience of the Great Recession provides a valuable lesson on this front: In firms with high employee engagement going into the crisis, discretionary effort fell after initial layoffs but fully recovered after six to nine months, while firms with low engagement never saw their employees’ discretionary effort recover.

In addition, enterprises are asking more than ever of their workforces. Employees are being asked to adapt to new business models, say goodbye to colleagues, embrace new ways of working, operate remotely, and deal with tremendous uncertainty – all while dealing with stresses related to health and family concerns. Without extra attention to EX, companies face the risk of engagement – and productivity – falling steeply.

Fortunately, enterprises can harness these positive impacts of EX without simply ratcheting up their spending. While additional monetary investments increase employee satisfaction, now is not the time for rich initiatives that lack long-term scalability. Further, an investment-focused approach escalates the expectations of perk after perk, and specialized EX initiatives that don’t apply to the entire workforce.

For buy-in and a better EX, CHROs should balance their investment into things like onboarding, L&D programs, and employee-facing technologies with managing the perception of available programs and support. Shaping how the experience feels is free and significantly increases employee satisfaction from 36% to 64% per Gartner research. Employees who work for organizations who put as much effort into shaping the employee experience as investing into EX programs are more likely to stay and perform at a high level. In re-thinking EX through this framework, CHROs can make progress by calibrating employees’ expectations for their experience, empowering them to personalize their own day-to-day experiences, and managing their memories of the employee experience.

As the economic impact of the pandemic drags on, many organizations may be tempted to neglect EX in favor of concerns that seem more immediate. But CHROs can continue to advocate fiercely for EX by emphasizing its impact on engagement and productivity, and by refocusing efforts on shaping how the experience feels for employees. In so doing, they can both preserve the hard work they have done on EX over the past decade and make progress on new fronts.


Jason Larson headshot

Jason Larson

Director, Content at Evanta, a Gartner Company


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