The employee experience (EX) is emerging as a surprise tool to drive profitability.

Accenture has been doing research on how customer decision-making is changing. We are calling it the “age of relevance,” and we are finding the old 4Ps of marketing are no longer enough to win and keep market share.

Unsurprisingly, this trend has spilled over into the employee experience, also called EX.

As foreseen by Peter Senge and others nearly 40 years ago, the world of work is becoming dominated by knowledge workers. This is causing a shift in the power dynamics between employee and employer which mirrors the shift in dynamics between retailer and customer. As retailers have adapted by focusing on the customer experience (CX), so employers are adapting by using the same principles to enhance their employee experience (EX).

It’s a bold move, because it changes the role of the traditional HR function. But companies that have made the move have seen dramatic results. Focusing on the customer experience has been shown to increase loyalty and sales. Focusing on the employee experience has had similar beneficial results.

Our research shows that companies with “great” employee experience outperform Standard and Poor’s S&P 500 by a whopping 122%. And companies with highly engaged workforces are 21% more profitable than those with poor engagement.

The purpose of an EX initiative is to improve employee engagement. So, with research findings like these, the case for implementing EX seems to almost make itself.

Employee engagement has been a mainstay of organisational life for years now. Those initiatives of the past are different from what the research calls EX. The main difference is how EX offers hyper-personalisation to employees.

Traditionally, the employee experience has been characterised by two drivers.

Firstly, it’s been a top-down approach. HR would identify an employee engagement strategy or tool and they would be the ones deciding whether to roll it out. Secondly, it’s always been a “one-size-fits-all” approach. A company may decide to install standing desks, for example. HR would research and decide on the type of desk, and then everybody in the organisation would get one.

The EX approach turns this on its head. Taking a leaf from the CX playbook, the EX aims at hyper-personalisation. This involves applying the same segmentation and deep insights to the employee population as companies increasingly use for their customers.

With the rise in knowledge work has come another trend — the rise in contractors and freelancers. This means that companies have people on their payroll who aren’t full-time employees. These part-time or arms-length resources usually fall through the cracks of the traditional top-down HR initiatives.

With a focus on the EX, this no longer needs to be the case.

Workplaces have different generations of employees in different life-stages. Young, single employees have different needs to new parents, who in turn have different needs to people whose children have left home. Employees’ needs may also differ from department to department and from geography to geography. This has been well understood for ages. What is new is that demographics aren’t enough. The focus on the EX mandates that companies personalise the employee experience for every individual.

One thing all workers seem to have in common is a desire to choose how, when and where they perform their work.

The new paradigm requires three things:

  1. Accept that the employees know – better than HR – what will boost their engagement and productivity.
  2. Delve deeper than demographics alone. Use sophisticated analytics and social listening to understand individual needs, preferences, intentions and motivations.
  3. Invest in technologies that bring the desired employee experiences to life.

Already, between three quarters and more than four fifths of companies are implementing, or at least piloting many of these technologies, including collaboration platforms, self-service apps that create consumer-like experiences, and “know me” tools modeled after popular social media apps and platforms.

To read the research directly, please click on this link.