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What is the state of EX?

Introducing TI People’s State of Employee Experience research report

Redefining HR as a people success function, Employee Experience (EX) is to Human Resources what Customer Experience is to Marketing and Sales: the face of the future.

Over the last two years, TI People has worked alongside Global 2000 companies to define EX, measure it and manage it within large organizations. Through this project, we have proven EX’s business value and come to understand its cross-silo nature and resulting ownership complexity. Together, we have built the most comprehensible view of today’s EX landscape.

Organizations across the world recognise that providing a better experience to their employees is essential to success in a highly competitive marketplace. But which of the massive EX promises and concepts have been adopted in large companies? And which concrete steps should HR take, next? It is with sincere gratitude to all of our co-creators that TI People is proud to introduce you to the State of Employee Experience Report: your roadmap to EX in 2019 and beyond.

Cover of the State of EX report

Download the whole report here or keep reading for our top three insights.

1. EX is on the new CEO agenda

With new technology and the rise of platform companies like Amazon, Google, Netflix, Spotify and others, ‘customer experience’ (CX) became the key differentiator for companies, seemingly overnight. The concept of always-on, effortless and instant gratification created by these new platform companies was powerful enough to disrupt entire industries. With CX and the move to agile platform businesses came the fourth industrial revolution, requiring digital, agile skills and an entirely new world of work. Consequently, talent and its engagement, attraction, and retention are the key differentiators for the company and EX is a new focus for CEOs:

To win in the marketplace, you must first win in the workplace.

Doug Conant, CEO of Campbell’s Soup Tweet

Customers do not come first. Employees come first.
If you take care of your employees, they will take care of your customers.

Richard Branson, CEO of Virgin Group Tweet

Three out of four CEOs agree. And nine out of ten would give facilitation and management of EX to the CHRO.

 

2. EX is an opportunity for CHROs – and a challenge

With three out of four CEOs being ‘fans’ of employee experience and nine out of ten seeing the facilitation of EX in HR, EX is clearly becoming a priority for the CHRO: Of our surveyed CHROs, 55% have made EX a ‘declared priority’ for 2019, and 92% agree that the importance of EX will grow between now and 2021. Hence, EX might become the next sub-function of HR, just like Analytics did five years ago. The opportunity for CHROs to provide business value is huge. It stems from two levers: First, EX creates a better experience at ‘moments of truth,’ those moments where the experience matters and directly improves engagement. Engagement is defined as ‘discretionary effort’ and ‘higher intent to stay with (or join) a company’. It accounts for 55% of the total business value of EX – or 85 Million USD in bottom-line P&L impact for a company of 20,000 employees. Second, EX creates a more effortless experience for managers and employees. It is giving significant time back to the business – 100 hours per employee and manager per year, on average. The total bottom-line P&L impact is 71 Million USD in a company of 20,000 employees.

In response to this opportunity, CHROs are setting up central EX teams. The Head of EX typically reports to a direct report to the CHRO or directly to the CHRO.  is the easy part – these teams for the average 20,000 employee company And the EX team’s capacity is on average three people in a 20,000-employee company, with an average budget increase of 12%.

The gaps in EX execution

The challenge for the CHRO and the EX team is how to execute on their EX ambition: With a 75% CEO mandate, 55% of CHROs have declared EX a priority for their organizations. But only 12% have put an EX roadmap in place to execute against this priority. There is an obvious execution gap: EX is unchartered territory for most CHROs. Let’s compare EX to other significant HR initiatives, like a global Workday implementation: It’s complex, it’s burdensome – but we know what to do. The playbook for global Workday implementations is written. That’s very different for EX. In addition, the term EX is not copyright-protected. Undefined in that sense, EX activities can range from better coffee machines to new workplaces and HR apps. Hence, there are lots of misconceptions. Especially when it comes to managing it at scale in large, complex organizations.

 

3. Successful EX is simple, self-sustaining, local

In co-creation with 30 companies, we have defined the ideal space for the CHRO to manage: It is a set of 12 employee journeys and five manager journeys, with a total of 285 touchpoints. Of these, 171 are owned by HR. Yet of the 36 most critical touchpoints, only one is owned by HR.

Hence, for HR teams to effectively facilitate and manage EX, the scope is the employee and manager journeys for which HR is accountable. Within these, the most EX-critical pieces are owned by line managers. What does this mean? For HR to fulfill its role of an EX facilitator and manager, it must find ways to involve and engage the line managers from the business as owners of the most critical pieces of EX. HR practitioners share this view: 89% agree that EX cuts across internal ‘silos’ of HR, other support functions, and the business.

Manager-ownership of the most critical experience touchpoints

Concluding on these findings, EX can only be successful if line managers become an integral part – even the driving force – of it. That way EX isn’t yet another HR initiative driven by the center of the organization. Instead, it is a simple, self-sustaining, locally driven system, a ‘local contact sport’.

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