How do you win the war for talent? A question all the top dogs continue to ask themselves and one of the biggest issues facing the industry. In the eyes of one futurist, it’s all about the employee experience.
To win the war you need to give employees the workspaces they want, the tools they crave and a culture they can celebrate at all times.
We speak to Jacob Morgan, an author, speaker and futurist to learn how he helps organizations and individuals around the world understand how the world of work is changing, how we’re going to be impacted by it and what we should all be doing as a result of it.
Have a listen to the interview below, keep reading for a summary and be sure to subscribe to the Employer Branding Podcast.
What’s the future like?
Well, flying cars, robots, teleportation. Who knows what the future is going to look like, right? That’s part of the fun, and I think another interesting aspect is that it depends on how far in the future you want to look. Whether you want to look 5 years, 20 years or 100 years. The farther out you look, the more sort of creative and out-of-this-world idea’s you can come up with.
Tell us about ‘The Employee Experience Advantage’
So the Employee Experience Advantage is ultimately a book about how do we create organizations where people want to show up? The concept for the book came up because a lot of organizations around the world have been investing in something known as employee engagement and it’s been failing miserably.
We spend more money on it yet the scores aren’t changing. And after interviewing 150 or so executives and analyzing 252 companies from around the world, it became pretty apparent that engagement is just this idea of investing in short-term perks to try to make employees be happy. There wasn’t really any substantial change that was happening around changing core workplace practices.
- So what does it actually mean to work there?
- What is the function of HR?
- What technologies do we use for our employees?
- What should the physical space be like?
These are more core workplace practices instead of saying ‘let’s give them hot yoga on Tuesday or free food on Friday’, those types of short-term perks that so many are investing in. The book is essentially broken down into three key areas: culture, technology, and physical space. Those are the three levers that every single organization can design to help shape employee experiences: culture, technology, and physical space.
Is employee experience just another buzzword?
Well, I certainly hope it’s not, that would be a shame. I think it can become a buzzword if that’s how your company treats it. So if your company just rebrands and changes the name of everybody in HR to an ‘experience officer’, then it becomes just a buzzword. But instead, if you look at what companies like Cisco are doing, or LinkedIn, where they hold internal employee hackathons, where the goal of these hackathons is to break down particular practices inside the company and rebuild them from the ground up based on the year that we’re living in and what work is like now.
I think it depends on how you treat it. For me, employee experience is changing the core workplace practices around the people who work there. Again, I have something called the employee experience equation which is culture times technology times physical space equals employee experience. So that’s kind of the one big theme that I hope all your listeners walk away with, how employees feel, the tools they have access to get their jobs done, and the spaces in which they work.
How does employee experience relate to employer brand?
Well, employer brand is one of the things that I look at as a part of the cultural aspect.
It’s essentially how the organization is perceived both publicly and privately amongst employees and amongst just the world in general. So employer branding is absolutely a part of that. The challenge that I think we start to see with employer branding, and I refer to this as the online dating syndrome.
Before I got married, I tried online dating. I’m sure some of your listeners have tried online dating. The big problem that people can relate to if they’ve ever done this, is that oftentimes the person whose profile you see online and the person who shows up to the date are not the same people.
They look different, they’re just a totally different person as opposed to how they describe themselves versus how they really are. It feels a lot like employer branding is, and organizations are suffering very much in that area. In other words, we portray ourselves as one way online because we want to go on as many dates as possible, but the reality is that when these employees show up to work, they find out that, “Wait a minute. This isn’t the same company that was described to me.”
That is the big struggle, the big challenge for organizations around the world. The interesting thing is that out of the 252 companies that I looked at, I created a whole employee experience index and I ranked all of these companies based on culture, technology, and physical space. Whether the company scored lowest on this index or whether they scored highest on this index, they described themselves the exact same way.
So you could be the worst company and you’re just doing a terrible job in all three areas and you still describe yourself as a great place to work and wonderful corporate culture, great physical space, modern technologies and you describe yourself the same way if you scored number one on my index.
How can employer branding improve?
So, clearly, there’s something going on here. That is what a lot of organizations are struggling with. They’re scared to really let people know what it’s like to work there. In fact, I would encourage all of your listeners, next time somebody interviews for your company or next time they show up for a job interview, throw out the entire script that you have and tell people what it’s really like to work there.
So tell people that they’re really working 50 hours instead of 40. Tell them that managers are going to take credit for their work. Tell them that the technologies that they use look like they were designed in the ’70s, that they’re going to be sitting in cubicles. See what kind of a response you actually get from these prospective candidates.
Now, I’m not saying that that’s what your company is like. It might not be. But if you think about what it’s actually like to work at your organization versus what the employer branding side of it is, you’ll see that they’re two very different things.
We experience this a lot, because I talk to a lot of people, especially in HR, outside of work. When you go home and you talk to your spouse, your friends, your significant others, that’s when you really talk about what it’s like to work there. You talk about your day, you talk about how frustrated you are, you talk about what your challenges are. But when you show up to work, you’re not allowed to talk about any of those things. It’s like, “Oh, my God. This place is amazing. It’s wonderful. It’s great.”
So there’s a huge, huge disconnect between the online profile that our companies have created versus what it’s like to work there.
How can we be transparent about employee experience?
Some companies do a good job of this. Look at Netflix. Netflix released their corporate culture deck and they’re very blatant and upfront in telling people, “You are going to work hard. This is not an easy job. We’ll pay you well, but make no mistake, if you take this job, this is going to be a very, very challenging job for you. But we’ll take care of you if you decide to accept it.”
So when you take that job working for Netflix, you don’t have any misconceptions that things are going to be easy, that you might just work 40 hours a week, and kind of coast along. You know that if you take that job, you’re going to be in for some pretty hardcore hustling. I love that kind of transparent honesty.
How can you boost employee experience with technology?
One of the things that employees care about most when it comes to technology is having a consumer-grade technology, meaning tools that are so beautiful, so useful and so valuable that employees would consider using something similar in their personal lives if it existed. We see the reverse of this all the time. Facebook and LinkedIn and Twitter are so beautiful, so useful and so valuable that vendors are creating a product based on those that we use at work.
Imagine the reverse is true. You give employees access to such great technologies that if a consumer version of it existed, they would be all about using it in their personal lives. An example is something like Slack is very different to a traditional legacy platform that we all have used throughout the course of our careers.
Talk to us about culture and employee experience
One of the things that employees care about most is having managers who act as coaches and mentors, and if you want a simple way to evaluate your corporate culture, there’s always one question that I ask executives. You have to ask this question in kind of a one-on-one discussion. The question that I always ask them is if I were to bottle up what it was like to work at your company and put it into a pill form and give you that pill right now, would you be willing to swallow that pill? And almost every single executive that I talk to says no. They wouldn’t be willing to swallow that pill. So if we as executives and as managers, as leaders, are not willing to swallow that pill, why would our employees?
If you want to evaluate whether your culture is good or not that good, ask yourself that question. Ask your peers those questions, ask your managers and your executives that question and see if you can get some honest responses out of them.
Tell us about the role of physical space within employee experience
Physical space, and by the way, I should say that physical space and technology each contribute 30% to an employee’s overall experience, and culture is 40%. So culture is a little bit more of the bigger bucket there. But when it comes to physical space, there are four attributes, as I mentioned, and the important thing to remember about physical space is that it acts as a symbol of your company.
There’s been a lot of research that shows that the physical space helps connect an employee’s sense of purpose and mission to the organization. It’s not just a space in which employees work, it’s a symbol of your company. For the employee, the symbol of your company is not your values, it’s not your logo. It is the space in which they work. So think about that next time you walk into your headquarters, next time you walk into work, next time your company’s thinking about changing some kind of workplace practices.
Think about your space as a symbol that represents what your company stands for and what it is. There are two things employees care about most:
- One of them is working for an organization where the values are physically manifested in the work environment. So if your values are trust and fun and collaboration and transparency, if you show up to work, do you see those values being physically manifested? If not, then your values, I’m sorry to say, are just lip service.
- The second thing is to make sure that instead of giving employees one floor plan, whether it’s open or closed, the more important thing is to give employees multiple environments in which they can work. We spend almost as much time working as we do living in our homes. Our homes have multiple rooms designed for different purposes. During the course of a typical day, an employee can perform up to 21 different types of activities. So it makes no sense to put them in a one-floor plan, whether it’s open or closed. So I would encourage organizations to give as much flexibility and diversity of space as possible.
How do you get people to start using all the spaces around them?
Well, I think part of the problem is why spaces are designed, to begin with. If you design spaces for employees instead of with them, you’re going to find that you build things that a lot of the times employees don’t use.
I think companies need to do a better job of collecting data on their people, understanding how they work, where they work, why they work, and then designing spaces around that as opposed to just going into space and saying, “Oh, my God, that’s so cool. Look, there are beanbags and there’s a lounge.” It might look interesting but if that’s not how you work, those spaces will go underutilized and not used at all.
What are the top 3 trends that shape employee experience?
- Well, I think perhaps one of the biggest ones is the poor success with employee engagement that we have collectively had around the world. As I mentioned earlier, investments in engagement keep going up and scores either remain flat or they go down. That’s causing a lot of organizations to take a step back and say, “Well, that’s not good. We’re investing money in this. Nothing’s happening.” What we’ve seen with employee engagement is, as I alluded to, it’s become the adrenaline shot of the company. Satisfaction goes down and we inject an adrenaline shot which is in the form of a perk. Satisfaction temporarily goes up and then it drops back down and we inject another adrenaline shot. This is the kind of up and down cycle that our organizations go through. So that’s been a massive trend. Poor success with engagement causing organizations to say, “Well, we need something more substantial, something more in depth.”
- I think a second area is around people analytics and data and understanding what our employees care about and what they value and actually being able to put some numbers behind it. That’s a pretty big trend. The increasingly global nature of competition and talent is another one. So if you are a Coca-Cola or if you’re an IBM, you’re not just competing against people in your local area, you’re not just competing against people in your same industry. You’re competing against everybody. Coke is competing against IBM. Facebook is competing against Pfizer. Everyone’s competing against Ubers and the freelance companies of the world. So the broadening of competition and the talent landscape is another big trend that’s forcing companies to think differently about this.
- Perhaps the last one that I can touch on is this notion that disruption is happening pretty quickly, and whether you believe in automation or not, every company in the world can exist without technology but no company in the world can exist without people. I like to think that companies are starting to realize more importantly, or I should say more frequently, that employees and humans are still the number one asset that we have. If we cannot find a way to bring in the best people, then we’re going to have a hard time existing in 10, 15, 20 years. So I’d like to think that there’s a little bit of that happening as well.
What are the world’s leading organization doing around employee experience?
From the 252 companies I looked at, only 15 of them were doing an amazing job of investing in all three of these areas. These are companies like:
So there’s a lot of opportunity for growth. There are a couple of things that these companies are doing very well:
- One of them is, of course, they have pretty robust data and people analytics functions to truly understand their employees.
- The second is they invest seriously in all three of the environments that I mentioned. Another thing they do is they put people in positions of power who genuinely care about employee experience.
- Lastly, perhaps most importantly, is they think of themselves like laboratories and less like factories. In other words, they test, they experiment, they iterate, they play around with ideas and they see what works and what doesn’t, and I think that is probably the best approach that we can take to something like this.
What’s the ROI of employee experience?
I looked at it in a couple of different areas. I looked at “Best of” lists. So do the experiential companies, those that scored highest on my index, appear on other “Best of” lists more often than not? And depending on the list, they appear two times as often, up to 40 times as often. The second thing that I looked at was business metrics. Experiential companies, on average, have four times higher average profit per employee, 4.2 times profit in general, 24% smaller, 40% reduced turnover and there are a couple other significant ROI things in there as well.
Then the last thing I did is look at stock price performance. I took all of the experiential companies and I compared them against the NASDAQ, the S&P 500, the Fortune 100 best places to work, Glassdoor’s top 50 places to work, and the experiential companies just absolutely obliterate every other category of company. So, yes, there is significant ROI in terms of dollars and cents from investing in your people and employee experience.
Did good profits lead to good employee experience or vice versa?
The only way that you would be able to figure that out if you take a company from its inception and that does nothing, and then you benchmark that for a while and compare that versus either the same company or another company that’s doing something and then look at the results of those two. So that would be kind of an ideal controlled environment, right. So, for me, it’s hard to say. I think there’s a combination of both.
I think there are some organizations like Airbnb that started off since their creation, focusing more on experience because that’s ultimately the brand that they’ve created. Then I think there are other organizations like a Microsoft, like an Accenture which started off very hierarchical and bureaucratic and had to change over time. So I think it’s a combination of both.
What’s the future of employee experience?
Well, the initial future is first to get companies to embrace it, to understand it and to start making investments in it. The longer-term future of it is to eventually use data and AI to be able to create more customized experiences. So to be able to know every single employee inside of our companies and to be able to leverage data and AI to create and develop personalized and customized experiences for everybody who works there.
But ultimately, the dream, I guess you could call it, is that people are going to want to show up to work. They’ll genuinely feel excited and engaged about it, and I hope that is something that we see.