The importance of managing experiences properly is not a new concept. Back in 1998, Gilmore and Pine published an article in the Harvard Business Review, coining the term ‘experience economy’ and focusing on the ‘fourth economic experience’. They argued that the service economy followed the three previous stages of an economy: agrarian, goods-based, and service.
Gilmore and Pine were correct in their prediction when they said, “we expect that experience design will become as much a business art as product design and process design are today”. Many businesses still underestimate the power of this art, and this is likely to reflect in their bottom line.
However, the concept of the value of experience and how it impacts a customer’s perception of a service is not the only area where experience matters. A company will not be able to offer outstanding customer service if their employees are not content, engaged and fulfilled. And they will not be able to retain valuable employees if they cannot offer the experience their employees want.
In this series of blogs we will be exploring the employee experience and the factors that affect it, along with ideas and tactics to help you get it right.
What has changed to make the employee experience so important?
Gone are the days of a ‘job for life’. Employers and employees no longer benefit (or suffer) from a mutual dependence and the expectation that they are both in it for the long haul. We are all sophisticated consumers, and just as consumers will look for the product or service that best fulfils their needs and aligns with their values, employees are increasingly looking for an equivalent experience in their working life.
COVID-19 changed our priorities and how we work
The COVID-19 pandemic shook up the world on every level. People were forced to rethink their priorities and values. The ways in which people live and work have changed, and so have expectations. This has impacted the world of employment, with the “Great Resignation”, as the large numbers of people currently quitting their jobs has been called, being one of the main consequences. The cost to businesses will be significant, both in terms of hiring new talent, and the impact on the customer experience as new team members take time to get up to speed.
People are looking for alternatives when they find their lives and values cannot be supported by their current employment. Remote working and hybrid working, formerly the exception rather than the rule, are here to stay. McKinsey’s Future of Work after Covid 19 report estimates that, of the companies where remote work can be undertaken without a loss of productivity, the percentage of the workforce that could work from home ‘represents four to five times more remote workers than before the pandemic’.
As Ann Francke, chief executive officer of the UK’s Chartered Management Institute (CMI) puts it, “just offering big budget salaries isn’t cutting it anymore. Managers who aren’t adapting their working models will be left wanting – and their organisations will pay the price.”
What do organisations risk by not considering the employee experience?
Gallup says that “the cost of replacing an individual employee can range from one-half to two times the employee’s annual salary — and that’s a conservative estimate”. And that employees who are not engaged “cost their company the equivalent of 18% of their annual salary”. So, whether an unhappy employee stays or goes, they are still impacting the bottom line.
We have all experienced terrible customer service from an individual who clearly does not care that the way they behave reflects poorly on the company they represent. Or perhaps, worse, they are deliberately sabotaging a company’s reputation because they have an axe to grind. The McKinsey research “shows that different experiences in the three core areas of EX [employee experience] —social, work, and organisation—explain most of the variation in how positively or negatively employees view their journey with their company”. This leads to satisfied employees “having a 40 percent higher level of discretionary effort”.
Where does service design fit in to the employee experience?
In order to align employee experience with expectations, it is vital to align company culture with the face the company wants to present to the world. Employees who feel undervalued and cannot trust the company they are working for are unlikely to convince customers that trust and respect are values the company stands for, regardless of the marketing campaigns.
To create a meaningful employee experience, it is first necessary to understand where problems may lie. Processes, policies, and values need to be properly understood and aligned. Just as the customer experience needs to be designed with the process and the end result in mind, so does the employee experience. Failure to consider all the touchpoints and how to optimise them will result in a poor experience.
Just as there is unlikely to be one target customer and services should be designed accordingly, there are likely to be differing requirements amongst employees to be considered. Randstad found that, when considering the employee experience, “there are subtleties at play. Marketers are more interested in a company’s commitment to CSR and flexible working than others. Administrators give more weight to job security and free parking than anyone else. And people in financial services tend to care about career progression more than other professionals – while call centre workers put more store in mental health support”.
Getting ahead with your employee experience
In our next blog we will be looking at the factors that have the greatest impact on the employee experience. If you think your company could benefit from service design as a tool to create a great employee experience, increase engagement and productivity and to get ahead in today’s experience economy, you can book time with a service design expert below – just select the time that works best for you.
Book time with a Service Design expert