What is Employee Experience (EX)? Simplified Guide

Employee experience, or EX, is shaped by the interactions, perceptions, and feelings an employee has throughout every stage of the employee lifecycle, from recruitment and the onboarding process to their day-to-day work, professional development, and eventual offboarding.

In this post, we’ll explore the definition of employee experience, discuss how investing in EX increases productivity and improves business performance, and explain why improving the digital employee experience (DEX) is a smart but often overlooked place to start.

• How do you define employee experience?
• Employee experience vs. employee engagement
• Why is employee experience important?
• How does a positive employee experience impact business outcomes?
• What are the fundamentals of employee experience?
• What are the key drivers of a great employee experience? Real-world examples
  • Providing a seamless onboarding experience
  • Retention through career growth opportunities
• How do you measure the effectiveness of your employee experience strategy?
• Why digital employee experiences matter
• What it takes to provide a great employee experience

How do you define employee experience?

Employee experience is the sum of all the interactions, perceptions, and emotions throughout the employee’s journey. It encompasses every touchpoint with your company, from the hiring process through their exit interview. Factors such as the work environment, technology, company culture, leadership, team members, learning and development opportunities, compensation, benefits and perks, and work-life balance all help shape EX.

Similar to organizations looking to improve existing processes through digital transformation initiatives, what it takes to craft a great employee experience must also change to meet the new challenges and expectations of modern employees. With the rapid adoption and expansion of digital workflows, cloud technology, and remote and hybrid work environments, organizations must rethink what providing a good employee experience means.

However, employee experience is often confused with employee engagement, but they are different. Let’s review how employee experience overlaps with and supports modern employee engagement efforts.

Employee experience vs. employee engagement

Employee experience and employee engagement are closely linked but distinct concepts. Employee experience refers to the holistic journey an employee takes with your organization. On the other hand, employee engagement focuses on the emotional connection, commitment, and motivation of employees toward their work and the company.

While employee experience is about the overall environment and conditions that employees are exposed to, employee engagement is the outcome of a positive employee experience. A well-crafted employee experience can lead to higher employee engagement, as employees who are satisfied with their work environment are more likely to be committed, motivated, and productive. Conversely, a poor employee experience can lead to disengagement, where employees may feel undervalued, unappreciated, or disconnected from their work and the company’s goals.

According to Gallup, U.S. employee engagement is in freefall. It started with a slight slip to 34% in the second half of 2021 after a decade of engagement-related organizational performance gains. By the first quarter of 2024, U.S. engagement rates were at 30%.

Employee experience is the foundation for building employee engagement. Organizations that invest in creating a positive employee experience will likely see a ripple effect in the form of higher engagement levels, which can translate into better performance, lower turnover, and a stronger bottom line. Focusing on employee experience is not just about creating a pleasant work environment; it’s a strategic approach to fostering an engaged workforce that aligns with the company’s vision and contributes to its success.

Why is employee experience important?

A positive employee experience can be an essential differentiator for organizations looking to attract, retain, and engage top talent. When considering potential employers, job seekers increasingly prioritize factors such as company culture, work-life balance, and professional development opportunities. By investing in employee experience, organizations can gain a competitive advantage as an employer of choice by building a solid reputation around employee satisfaction.

The best employee experience is not meant to be yet another organizational process. EX means pinpointing important moments in an employee’s journey and making them more positive, fulfilling, even joyful. Doing so can help companies attract the best people, motivate them to perform, and augment feelings of loyalty. A successful EX culture, in turn, accelerates growth and creates competitive advantages.

Employees who feel valued, supported, and empowered are more likely to be motivated, productive, and committed to their work. This, in turn, leads to better business outcomes, such as increased innovation, customer satisfaction, and profitability.

How does a positive employee experience impact business outcomes?

Companies with higher levels of employee well-being, happiness, and job satisfaction often see significant benefits, such as superior valuations and earnings-to-asset ratios, higher stock returns, lasting sales growth, and more frequent earnings surprises.

Other business benefits of an exceptional employee experience include:

• Increased productivity: Employees who feel valued, supported, and empowered throughout their journey are likelier to develop a strong emotional investment in their work and their organization’s success. McKinsey found that employees at organizations with high employee experience levels are often more inclined to surpass work expectations, with a 40% higher level of discretionary effort to go above and beyond the minimal amount of effort required.
• Higher retention: A positive employee experience is crucial for retaining top talent. MetLife found that 87% would consider leaving a company that does not focus on their well-being. When employees feel valued and have opportunities for growth and development, they are more likely to stay with their organization long-term, reducing turnover costs and creating a more stable workforce.
• Improved customer satisfaction: Employees with positive work experiences are more likely to provide exceptional customer service. A study by MIT Technology Review Insights in partnership with Genesys found that 95% of CEOs say that blending customer experience (CX) and EX improvements will result in positive company growth.
• Increased innovation: When employees feel supported and empowered to share their ideas and take risks, they are more likely to develop new products, services, and processes that drive business growth. According to NTT Data, 91% of leaders say EX focus directly affects their bottom line.
• Better financial performance: University of Oxford Wellbeing Research found that when companies raised overall happiness by one point, they saw a 1.7 percentage-point increase in return on assets. Similarly, companies with high well-being ratings outperform standard stock market benchmarks.

What are the fundamentals of employee experience?

Identifying an employee experience framework to follow can be challenging due to the human element involved in crafting the perfect employee experience.
 
According to McKinsey, when implementing the fundamentals of employee experience, organizations should concentrate on improving three primary environments: organization, social, and work experiences.
 

1. Organization
   The organizational environment refers to the physical workspace, company policies, and workplace practices. It also includes cultural attributes, such as the company’s mission, values, and goals, as well as its leadership style, communication methods, and decision-making processes.
    
   A positive organizational environment is one where employees feel aligned with the company’s purpose, trust its leadership, and clearly understand how their work contributes to its success.
2. Social
   The social environment encompasses employees’ relationships and interactions with colleagues, managers, and leaders. It includes team dynamics, collaboration, feedback, and employee recognition.
    
   In a positive social environment, employees feel supported, valued, and connected to their peers and leaders. It fosters a sense of belonging, psychological safety, and open communication, which is essential for employee well-being and engagement.
3. Work
   The workplace environment refers to the physical and digital spaces in which employees perform their work and the tools and technologies they use to do their jobs, including office layout, ergonomics, IT infrastructure, and remote work policies.
    
   A positive workplace environment is one that’s comfortable, efficient, and conducive to productivity and collaboration.

What are the key drivers of a great employee experience? Real-world examples

To better understand how critical touch points within the employee lifecycle can serve as opportunities to foster positive employee experiences or contribute to employee disengagement, let’s explore the fictional but very realistic lives of Beth, an intern starting her first day in a remote role looking to be set up for a successful internship, and Lisa, a financial analyst at a multinational bank, exploring career growth opportunities.

Providing a seamless onboarding experience

Ahead of her start date, Beth received a laptop, some company merchandise, and a personalized email that informed her of what to expect on her first day — a virtual meet-and-greet with her fellow new hires and a speech from the CEO. The email also informed her that, due to access policies, she wouldn’t be able to use the corporate laptop until her first day.

Fast forward to her first day: As Beth settled in with her new branded cup of ambition and opened the company laptop, she found she couldn’t log in. She tried resetting the password with no luck. She also searched her personal email to review the welcome letter for any other information.

Had she gotten the date wrong? How could she escalate her issue to IT as someone not yet considered an employee? She was panicking — this wasn’t the right foot to start on for her dream of having a potential career at this company.

What went wrong: While the ideal onboarding experience often starts with a warm welcome letter, fun swag gifts, and time for new employees to socialize and gain recognition as crucial additions to the organization’s success, starting off the first day at a new job with technology issues can be quite disheartening and a negative first impression of the company’s digital work environment.

For all employees, especially those working remotely, technology is often the primary means of interacting with colleagues and performing their jobs. In a competitive job market where talented individuals may not hesitate to leave if their digital experience is subpar, ensuring a smooth and efficient digital employee experience is crucial for retaining employees and fostering a positive work culture.

Retention through career growth opportunities

During her annual performance review, Lisa and her manager worked with human resources to create a personalized career development plan. She was experiencing burnout in her current role analyzing data, so she was excited for the opportunity to shift to presenting insights in face-to-face meetings with the bank’s business leaders, during teleconferences with prominent global clients, and onstage at international conferences.

While these new experiences will expand her opportunities, Lisa is worried that her company-issued and personal presentation equipment (e.g., iPad, prompter, lavalier mic, etc.) may cause issues that affect her ability to be successful in this new role.

Fortunately, the bank has actively invested in improving the digital employee experience as part of its digital transformation initiatives to ensure Lisa has the support she needs to use the technology she relies on effectively.

What went right: By proactively remediating technology issues before they cause problems and regularly surveying employees about their digital experiences, Lisa’s organization has created essential employee feedback loops to help ensure seamless interactions between employees and the technology they need to be successful.

A DEX solution can allow Lisa’s company to optimize the digital employee experience by identifying and remediating systemic issues. It can also help the organization measure employee sentiment and create automated self-healing actions to address issues for specific business applications.

How do you measure the effectiveness of your employee experience strategy?

Understanding the effectiveness of your employee experience strategy is crucial for determining what’s working well and where there’s room for improvement. Some of the ways organizations can go about measuring EX strategies include:

• Regular employee surveys, sometimes referred to as “pulse surveys,” are surveys conducted at set intervals that can provide valuable insights into how employees perceive various aspects of their work experience. Common survey types that can help organizations measure employee experience include:
  • Employee sentiment surveys can provide the opportunity to measure employee sentiment about technology updates and improvements, such as highlighting key areas of improvement, like the digital employee experience.
  • Post-resolution surveys can provide immediate feedback about the way IT interactions and help desk interactions are handled.
  • Exit surveys can be leveraged by HR teams to gain insights into workplace dynamics and areas for improvement from departing employees.
  • Employee engagement surveys measure the emotional connection and commitment employees have to their work and the organization. These surveys typically include questions related to factors such as motivation, advocacy, and intent to stay with the company.

[Read also: Mastering Employee Engagement Surveys: From Data to Action]

• Tracking employee retention rates can provide insight into the overall health of your employee experience. High turnover rates may indicate issues with management, compensation, or work-life balance.
• Net promoter score (NPS) is a metric used to measure employee loyalty and advocacy. This anonymous survey asks employees how likely they are on a scale of 0-10 to recommend their company as a place to work. A high NPS score indicates a positive employee experience, while a low score may signal areas for improvement. Learning and tracking the NPS scores can help your team quickly understand whether your employee engagement initiatives are having the desired effect.
• Measuring productivity metrics such as output, quality, and efficiency can provide insight into how employee experience is impacting overall performance. Happy, engaged employees are more likely to be productive and deliver high-quality work.

Why digital employee experiences matter

What was once limited to in-office, in-person, and legacy systems has fundamentally changed how employees experience technology at work over the past few years. Now, the digital employee experience is rapidly becoming the sole employee experience.
 
Digital employee experiences are not just about providing the latest technology; they’re about creating a seamless, efficient, and empowering environment that supports employees in their daily tasks and overall career journey. Digital experiences influence all the other core areas of employee experience, including communication, collaboration, learning, and personal growth.
 

[Read also: What is Digital Experience Monitoring (DEM)? Why DEM Strategy Matters]

By making DEX a top priority in their employee experience strategy, organizations can ensure their workforce is equipped with the tools they need to succeed and foster a culture of innovation and continuous improvement, which is essential for attracting and retaining top talent in a competitive market.

What it takes to provide a great employee experience

Providing a great employee experience is more than just offering competitive salaries and benefits. It’s about creating an environment where employees feel valued, supported, and empowered to perform at their best. Key to this is understanding the digital employee experience and addressing the pain points that can hinder productivity and job satisfaction.

Investing in DEX centers around creating a seamless, intuitive, and inclusive work experience that resonates with the modern workforce’s expectations and employee needs. Having superior DEX leads to a more connected and empowered workforce capable of delivering exceptional results, staying agile, and advancing the digital transformation journey.

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Tanium’s Digital Employee Experience (DEX) solution streamlines processes and reduces common frustrations employees face with their digital tools. Tanium DEX helps companies monitor, manage, and improve their employees’ digital experiences at scale, allowing for real-time adjustments and improvements.

By providing comprehensive visibility into the performance of endpoints and applications, enabling automated self-healing to remediate issues, and creating a feedback loop to understand employee sentiment, Tanium DEX empowers organizations to create a more positive and productive digital workplace environment that boosts employee sentiment and well-being.