Imagine beginning your January executive team meeting with a question from your colleagues to justify an investment in the company’s employee experience (for example, one investment we are hoping to see more of is examining work patterns to evolve the mix between synchronous and asynchronous work).
Will senior management see it as simply another line item in the budget—or are they on board with the idea that employee experience is key to a strong competitive edge in 2025’s market?
We’re noticing executive teams where the CFO and the CPO/CHRO are aligned in this regard, they happen to be in mostly growing companies (correlation is not causation…and yet it’s interesting, right?).
As the “way we work” continues to evolve, Employee Experience (EX) is evolving as a strategic tool that can tip the scales as to whether your company fosters innovation and thrives in a highly competitive landscape.
Investing in EX is more than just perks or a positive culture—it’s about curating every touchpoint in the employee journey to enhance business results. These touchpoints shape how employees engage, innovate, and perform.
Understanding Culture vs. Employee Experience
Think of organizational culture as the script and stage design for a play, while employee experience is the live performance that unfolds on that stage.
- Culture is the script — the core narrative, themes, and character motivations. It outlines the values, beliefs, and ethos that guide behaviors and set expectations. Like a well-crafted script, culture provides the underlying structure and answers the “why” behind your organization’s existence, tying into its mission and vision.
- Employee Experience is the live performance that brings the cultural script alive. It’s the day-to-day enactment of the company’s story. The employee experience encompasses the props (tools) they use, the set design (work spaces), the character development (growth opportunities), and the directorial support they receive (Christopher Nolan, anyone?). Just as each performance can vary, EX can change more quickly, adapting to daily circumstances while still following the overall script.
The relationship between these two is symbiotic: Culture shapes the design of the employee experience, while EX reinforces and amplifies culture.
When culture and EX are aligned, it shows up in business results (continuing the metaphor – you receive an Academy Award!). But if you’re not in film, it impacts business metrics like engagement, retention, and productivity—key drivers of profitability and growth over time.
Why Viewing Employee Experience as a Cost Center Can Hurt Growth
Viewing your EX as a “nice-to-have” line item is a risky view in a competitive talent market.
EX is a relationship. When companies view EX as expendable, they undermine trust and set off a chain reaction: disengaged employees and declining productivity.
Research shows that cuts to EX investments often result in hidden costs in the medium term —lost innovation, decreased morale. You’re short-shrifting your relationship with employees. Several studies support the reframing of EX from cost center to investment:
- Research cited in the Harvard Business Review found that shifting employee experience from “poor” to “excellent” could result in a 45% increase in profits per person-hour.
- Accenture’s research reveals that companies who invest in innovation (a key component of good EX) outperform their competitors up to five times more.
- Forrester Research found that companies with a more engaging EX are 21% more profitable than those with poor engagement.
- Gartner’s research shows that organizations that effectively deliver on their employee value proposition can decrease annual employee turnover by 69% and increase new hire commitment by nearly 30%.
Research from Peter Cappelli highlights the pitfalls of inflexible management approaches, including the missed opportunities when organizations fail to create environments that support fluid, engaged workforces.
Companies that fail to prioritize EX risk losing their competitive edge because the best talent increasingly seeks opportunities that offer not just a job, but a fulfilling and empowering experience.
A New Approach: Treating Employee Experience as Organizational R&D
What if we flipped the script and treated employee experience as we do research and development (R&D)? Would you buy the stock of those companies?
Just as R&D fuels innovation in products and services, an R&D-like approach to EX can spark innovation in how teams work, collaborate, and grow. This means experimenting with new tools, refining processes, and collecting data to understand what drives employee satisfaction and productivity. And like any good R&D initiative, this investment yields measurable outcomes: lower regrettable turnover, higher engagement, and increased performance.
It’s not about strategically investing in the systems, tools, and experiences that drive real results.
Engagement is key. Gallup’s State of the Global Workplace: 2024 Report revealed that employees feel that being actively disengaged at work feels equivalent to or worse than being unemployed. The report states:
When employees find their work and work relationships meaningful, employment is associated with high levels of daily enjoyment and low levels of all negative daily emotions.
Notably, about 50% of employees who are engaged at work are thriving in life overall. What a win/win!
Key Metrics to Evaluate the ROI of Employee Experience
Investing in EX isn’t a leap of faith—it’s a measurable strategy. Companies can learn from quantitative and qualitative metrics to understand EX’s overall impact. (And we can help if you need extra hands here…while leveraging AI):
- Quantitative Metrics: Metrics like employee retention rates, productivity levels, leadership quality, and promotion rates can clearly show whether EX efforts are paying off.
- Qualitative Insights: Numbers only tell part of the story. Employee feedback, sentiment surveys, and anecdotal insights reveal how well the day-to-day experience aligns with the company’s culture.
By combining these approaches, companies can create a holistic view of their EX initiatives and identify opportunities for improvement.
Forshay’s Approach: Maximizing Cultural and Employee Experience ROI
At Forshay, we upgrade and accelerate business outcomes with context-specific EX strategies that deliver improved outcomes. The Forshay approach is business context specific, relational, and low overhead. Or as a client recently said “you are high quality and better priced – thank you”.
Questions? Reach out today, we’d love to hear more.
