More than 9 in 10 employers make enhancing the EX a top priority for post-pandemic success
But few are prepared to deliver change.
Our 2021 Employee Experience Survey findings confirm that the pandemic created an EX stress test as employers deployed a range of actions, including restructuring, cutting pay and benefits, and adopting a flexible work model in response to the crisis. These actions took a significant toll on people and business with declines in productivity, engagement and wellbeing, among other areas, at many organizations.
As a result, we’re seeing a “great EX awakening” — one that has 92% of organizations prioritizing EX enhancements over the next three years. This figure is up from 52% prior to the pandemic.
Employers recognize the urgency of improving the EX as they adapt to their new reality and face turnover and engagement challenges. Yet, nearly four-fifths of organizations (79%) report they have not yet reached their new reality in terms of returning to the workplace and ending temporary pandemic-related policies and procedures.
In other words, the stress on the EX persists, and most organizations report they have a ways to go. Our survey insights will help organizations take the bold measures required to transform the EX in ways that enable both employees and the business to thrive in the post-pandemic world.
Organizations’ awareness of the importance of the EX increased dramatically during the past year.
What sparked a great EX awakening at this time?
The pandemic created an acute stress test for the EX as organizations took rapid actions.
In some cases, employers took action to preserve their business; in other cases, they were looking to capture growth opportunities. Regardless of the objective, the extent of these actions over such a short period of time exerted a significant toll on employees and organizations.
When asked about the impact of the pandemic and related actions…
Employers report that the pandemic and related actions taken by employers had a negative impact on the employee experience (43%) as well as employee wellbeing (50%) and employee engagement (40%).
In addition, more than half of employers (52%) say that the pandemic and the actions taken in response to it hurt financial performance, while over a third (35%) indicate they experienced a decline in productivity as a result.
This situation created an urgency for employers to focus on the EX, a critical value driver. But few organizations were prepared to deliver a positive experience in unsettled times.
Few organizations are able to transform the EX and how work gets done in order to persevere in the face of challenges. Only roughly one in 10 organizations (9%) have an EX that is transformative, but these organizations are more likely to have achieved improved people and business outcomes.
Our research enables us to identify different stages of EX development that form a dynamic continuum, allowing each organization to advance its EX as it evolves.
Transformative EX organizations are more likely to achieve better business and people outcomes — including lower annual turnover
Those areas show a +7% difference in three-year change in gross profit margin for employers that achieve excellence-level EX.
Sources: 2021 Employee Experience Survey - Shaping EX strategies for impact; and “Identifying the factors that make high-performance employee experience (HPEX),” Willis Towers Watson, 2019
Moreover, when compared with organizations that have not defined an EX strategy, Transformative EX organizations are more likely to experience a net positive impact in the following people areas: organizational culture (+44%), employee experience (+40%), employee engagement (+35%) and employee wellbeing (+28%).
Compared with organizations without a defined EX strategy, Transformative EX organizations are more likely to experience a net positive impact*…
They also are more likely to report higher productivity and lower annual employee turnover relative to their peers.
Transformative EX organizations are more likely to report*…
*Compared with organizations without a defined EX
Despite facing the same pandemic-related EX challenges as other organizations, Transformative EX organizations fared better in key leadership areas.
Transformative EX organizations were:
EX challenges are not going away. Approximately eight in 10 organizations (79%) report that they have not yet arrived at their new workplace reality, and about 40% don’t expect to reach this milestone until 2022 or beyond. This suggests that these organizations expect more changes and EX challenges in the future. Even once organizations reach the Transformative EX stage, it is critical for them to maintain a sustained focus on the EX to remain Transformative as different challenges arise.
Adapting to the new reality will take time and require a sharp focus on three areas:
The following actions can help employers achieve breakthrough moments and better position themselves to address ongoing challenges and deliver a high-performance EX.
Adapt to flexible work. Almost three-quarters of organizations (73%) have identified flexible work as a priority to improve the EX over the next three years. But many employers are not ready for this shift as only 56% say they’re flexible regarding where and how work gets done, and only 50% indicate they are in the process of reimagining careers in response to changes in how work is accomplished.
Transformative EX organizations are two times as likely as other organizations to redesign pay programs and policies to align with high-demand skills and to add new programs to promote workplace flexibility, such as backup day care or reimbursement of costs of working from home.
Additionally, Transformative EX organizations are more than twice as likely to shape strategies that address job reinvention, reskilling and talent redeployment.
Rebalance EX offerings. This involves developing a sharp focus on delivering fair pay, aligning Total Rewards programs with diverse talent needs, prioritizing health and wellbeing programs, and embedding inclusion and diversity into human capital strategies. Transformative EX organizations are more likely to be taking steps to address these issues.
Employee satisfaction with benefits ranks among the top five most common metrics used by Transformative EX organizations, reflecting an understanding of the importance of benefits to the EX. These organization are also three times more likely to rethink and invest in employee health and wellbeing programs, and to proactively manage diversity.
Equip leaders and managers to lead through change. All organizations support this imperative with only 22% saying a lack of senior management support is a challenge to deliver the EX.
A majority of organizations appear to recognize the need to improve leadership competencies. Nearly two-thirds (64%) say changing leadership competencies over the next three years to improve their EX is a priority. Organizations also have a gap in the area of change capability with only a quarter of organizations (25%) indicating that senior leader effectiveness at managing change is a major strength.
Reconnect with employees. Reconnecting with employees requires the use of communication technology and tools as well as analytics to listen to, communicate with and engage employees. Transformative EX organizations are more likely to communicate to drive behavior change and use tools to help employees get the most out of their benefits.
Build an integrated EX strategy. For initiatives in the preceding areas to be effective, they must be supported by an EX strategy that is technology-enabled and integrated with an organization’s business strategy. Three in 10 organizations indicate that the use of technology is transforming the EX and who they are as a business today, compared with two-thirds that indicate they expect to use technology this way in three years. Such a strategy requires an investment in technology today. Two-thirds of Transformative EX organizations (66%) are already investing in software to build and deliver the EX.
With 92% of organizations making it a priority to enhance their EX, there’s an urgency to take bold action to get ahead of the curve. This requires a radical new mindset focused on prioritizing and enhancing the EX on an ongoing basis.
Organizations adopting such a mindset strive to develop an EX model supported by technology and anchored around purpose, work, Total Rewards and people to power specific business and people outcomes. They use data and analytics to guide their EX actions in the face of shifting challenges. Additionally, these organizations make aggressive investments in the EX to secure an ROI in the form of engagement and wellbeing for employees, and productivity and performance for the business.
It’s time to let go of legacy mindsets and practices, and embrace the change and sustained effort needed to keep the EX a top priority for post-pandemic success.
A total of 1,550 employers representing 9.45 million employees around the world participated in the 2021 Employee Experience Survey. The survey was conducted between March 29 and April 23, 2021.
|2021 Employee Experience Survey: Global highlights of key findings