Employee engagement has often been viewed as the proxy for employee well-being. The line of thinking is that if engagement is good, that means employees are good, resulting in better business outcomes for employers. But, is employee engagement the best construct that employers should use to positively impact productivity and performance?
In reality, people today want to work for a company that enables them to bring their full selves to the job. They want an environment that helps them grow and thrive, and connect to what’s most important to them. Creating this kind of workplace goes beyond just ensuring that employees are engaged. It takes a deeper understanding of the ingredients that create a positive employee experience and creating the conditions that cultivate them.
New research from BetterUp suggests that while engagement is important, it’s only one piece of the broader picture—the entire employee experience. In fact, Gartner’s Cool Vendors in Human Capital Management: Enhancing Employee Experience report notes, “the vast majority of organizations have failed to address the impact of personal influences and issues on employee effectiveness and engagement.” BetterUp’s research shows that when companies enhance their employee experience, businesses directly benefit in the form of increased productivity, reduced turnover intentions, and higher job satisfaction.
Today, BetterUp released its Employee Experience Index (EX Index), which is based on 17,000 worker responses across 18 different industries to six key elements: authenticity, engagement, optimism, purpose and meaning, social connection, and belonging. These six elements were identified based on research across the behavioral sciences validating that they have a real and measurable impact on the employee experience.
For example, our previous research shows on average, workers would sacrifice 23% of future earnings—an average of $21,000 a year—for work that is always meaningful. Another study found that the greater employees’ feelings of authenticity are, the greater their job satisfaction, engagement, and self-reported performance.
By measuring each of these elements as part of BetterUp’s EX Index, we gained a deeper understanding of what contributes to a positive employee experience and how this relates to better business outcomes. Our findings show that workers with rich, positive employee experiences bring their best and most authentic selves to their jobs every day, approach challenges with an optimistic, growth-oriented mindset, build deep connections with colleagues, and feel and foster workplace belonging for self and others. Ultimately, this leads them to excel at work by a passion for purpose.
Indeed, when we looked at the connection between our EX index comprising these elements and specific business outcomes, we found that high EX index workers had 28% higher productivity, 37% lower turnover intentions, 142% higher employer Net Promoter Score (willingness to recommend the company as an employer to others), 46% stronger organizational commitment, and 59% higher job satisfaction.
Some of the top findings from BetterUp’s EX Index include the following:
- Engagement alone does not fully capture employee experience— links to business outcomes are much stronger for EX when it extends beyond engagement. For example, in our research we found that the relationship between EX and productivity was six times higher than for engagement alone. Many definitions of engagement fail to incorporate the full scope of EX elements and, as a result, fall short when put to the test against key individual and business outcomes.
- Newer industries, such as tech, lead in employee experience, while retail lags. Research from BetterUp’s EX Index shows that workers in the IT industry are 2.4 times more likely to have a strong employee experience than workers in retail. While this may be because of the IT industry’s continued war for tech talent, all industries will benefit from focusing attention on creating a positive employee experience. Other industries leading with employee experience are healthcare and financial services, while government, automotive, and manufacturing remain at the bottom.
- Sales functions are lowest in employee experience. When it comes to employee experience by function, results show that while IT and human resources rate high on EX, 27% fewer sales employees report a high-quality EX compared to the top-ranked function, IT.
- Leaders experience, but don’t always cultivate in others, high-quality employee experiences. Findings from our EX Index show that managers of people have a far higher employee experience than workers who don’t manage anybody. Our research shows that on average, 27% more managers of managers report a strongly positive EX than frontline leaders. This gap rises to 77% more managers of managers having a positive employee experience when compared to individual contributors.
Potential reasons for this gap could be that many individual contributors lack autonomy for how they work relative to leaders, that individual contributors aren’t seeing the same level of connection between their work and a broader purpose, or that their leaders aren’t providing the type of psychologically-safe, development-oriented, and feedback-rich environments that foster strong EX.
- Workers with choice on where to work have a better employee experience. Research shows that 36% of workers who interact equally with work colleagues remotely and in-person have a higher employee experience compared to those who interact with others primarily in person or remotely. While there are benefits to both options, being able to choose empowers employees and helps them feel supported.
Remote workers can struggle with work-life balance and stress which can counteract other benefits of remote work for schedule flexibility and job satisfaction. Those who can plan choices in how they interact with colleagues seem to be reaping the benefits of remote work while also interacting and building social connections in person when needed.
One of the most important steps in creating a positive employee experience is understanding what matters in the lives of employees. Helping employees thrive goes beyond finding ways to engage, and supporting all the elements that create a workplace where people want to be—and stay. Offering personalized, 1:1 mobile coaching for employees is one way that companies can invest in employee experience. In fact, enhancing EX is one of the many reasons why our customers choose to use BetterUp’s mobile coaching and learning development platform.
We look forward to continuing to measure EX and sharing insights that can help organizations create a better workplace and achieve better business outcomes.
Head of Assessments