In a previous article, I addressed why boards and C-suites care about employee wellbeing, both to drive performance and reduce risk. Closely related is employee experience, which I’ll cover here.
Effective boards and senior management teams understand that a superior employee experience is associated with superior financial performance. They know that healthy, engaged, financially secure employees perform more effectively and efficiently, make better decisions and drive superior results.
What is employee experience?
Employee experience has gained significant attention in recent years, as organizations recognize its role in attracting, retaining and engaging top talent. At its essence, employee experience refers to employees’ overall journey during their time with a company. It encompasses every interaction, from the initial hiring and onboarding process to daily work experiences, career development opportunities and even moments outside of work (such as those that impact family members).
A positive employee experience is characterized by a work environment where employees feel valued, engaged and connected to the organization's purpose. It goes beyond competitive benefits and fair compensation. It includes a culture that fosters growth, collaboration and wellbeing through four dimensions of the employee experience: purpose, people, work and total rewards.
What role do board members and senior leaders play in terms of employee experience?
With thanks to WTW’s Jill Havely, Angela Paul, Lindsay Stortz and Tiffany Shortridge, the following are actions that effective boards and senior leaders take to govern and maximize the benefits of the employee experience to the enterprise:
Recent WTW research shows that organizations with high-performing employee experiences achieved nearly three times the revenue growth, 11 times the profit margin and twice the return on equity compared to global averages. Eighty-six percent of employees at these organizations feel senior leadership has a clear vision for the future. Effective boards and senior leaders measure and review employee experience and performance data for their organizations.
Effective boards and senior leaders report materiality of human capital and wellbeing in multiple dimensions of financial and operational impact, including those that relate to employee experience. While wellbeing did not appear a significant differentiator as recently as 2019, it is now understood to be an essential element of the employee experience. High-performance companies prioritize employee wellbeing by making it an integral part of their culture, outperforming the average organization by more than five points.
Effective boards and senior management teams devote time to ensure essential topics relating to human capital and the employee experience are being covered and discussed. This includes three key areas:
Effective boards and senior management teams track representative measures from the following areas related to employee experience:
Boards and senior management teams practice effective governance through developing a deeper understanding of the employee experience, measuring it and enhancing it for their organizations.
A version of this article originally appeared on Forbes on March 28, 2023.