18 April 2019

What's the Link Between Employee Experience and Customer Experience?

Stacia Garr
Co-founder & Principal Analyst

Karina Freitag
Research Lead

TL;DR

  • This article is an introduction to our study on Employee and Customer Experience.
  • As of the time of writing, the term “experience”, either customer or employee, is vague and has many definitions.
  • This study aims to find clarity on the differences and similarities of employee experience and engagement.

Why we care:

It seems like everywhere we look folks are talking about employee experience (EX). In fact, a global 2018 study of five hundred CHROs, found that 83 percent of organizational leaders believe a positive employee experience is crucial to the organization’s success.1

Why is this the case? Some folks mention the hyper-competitive talent market and the expanding need for innovation. However, an equally critical reason is financial: many believe there is a clear connection between employee experience and customer experience (which should then drive revenue).

While this makes sense intuitively, there are still many unanswered questions:

  1. What, exactly, comprises employee experience?
  2. What is the relationship between employee experience and employee engagement?
  3. How does employee experience impact customer experience (CX)?2
  4. What is the measurable impact of employee experience on customer experience?

Understanding the answers to these questions will allow leaders to make much more strategic employee experience investments.

This is why we are launching a new research initiative, sponsored by Medallia, focused on these questions. We have already begun our analysis of existing literature and are actively looking to interview organizational leaders (is that you? Email us!) who can share their stories (the good, the bad, and the ugly) of how they have used employee experience to impact customer experience.

Hypotheses:

There is not a clear definition of employee experience. For example, some believe that employee experience is the result of connection, meaning, impact, and appreciation that employees find in their jobs – and builds on the foundations of culture and engagement3. Others see employee experience as being more akin to customer experience – using technology to make employee life more personal, predictive, and seamless4.

Though neither of those definitions of employee experience are aligned, they are different from employee engagement, which itself does not necessarily have a clear definition. For example, some5 defined employee engagement as the harnessing of organization member’s selves to their work roles. Others,6 stated it is a positive fulfilling, work-related state of mind that is characterized by vigor, dedication, and absorption. And, yet another academic7 defined it as an “employee’s willingness and ability to contribute to company success by freely giving the extra effort on an ongoing basis.”

Finding clarity on the differences and similarities of employee experience and engagement is our starting point.

Despite the competing definitions, research8,9 indicates that both employee engagement and experience influence customer experience and satisfaction, but the way they do that may be different. To better understand where and how organizations should invest, we need to have a framework for thinking about all of these concepts.

In addition, we believe there are insights that can be drawn from the customer experience world,10 such as thinking about experience as both static (e.g., a specific point-in-time or interaction) and dynamic (developing collectively over time), that can be applied to our understanding of employee experience.

Finally, we believe that organizations where employees can take action on employee experience and engagement insights tend to see better customer experience. To create a culture that enables these actions, organizations need to consider desired behaviors, leadership activities, information sharing protocols, decision-making rights, incentives and technology.

This Project:

Some of the ideas this research project will explore include:

What’s the Link Between Employee Experience and Customer Experience?

Please take a few moments to share your comments with us!

Footnotes

  1. “The New CHRO Agenda Employee Experiences Drive Business Value,” ServiceNow, 2018.
  2. “The Intersection of Employee Experience and Customer Experience,” P. Britt, CMS Wire, 2018.
  3. “The Employee engagement Experience: Culture, Engagement, and Beyond,” Josh Bersin, Jason Flynn, Art Mazor, Veronica Mellan, Deloitte Human Capital Trends 2017: Rewriting the Rules for the Digital Age, Deloitte Consulting LLP, 2017.
  4. “The New CHRO Agenda: Employee Experiences Drive Business Value,” ServiceNow, 2018. https://www.servicenow.com/content/dam/servicenow-assets/public/en-us/doc-type/resource-center/ebook/ebook-chro-report-comp.pdf
  5. “Psychological conditions of personal engagement and disengagement at work.” Kahn, W.A. Academy of Management Journal, Vol 33, 692-724. 1990.
  6. “Job demands, job resources, and their relationship with burnout and engagement: a multi-sample study.” Schaufeli, W.B. & Bakker, A.B. Journal of Organisational Behaviour, Vol 25, 293-315. 2004.
  7. “A Prognostic Examination of Functional and Emotional Employee Engagement Drivers and their Impact on Employee Performance,” Karminder Ghuman, FIIB Business Review, 2016.
  8. “Enhancing emotional performance and customer service through human resources practices: A systems perspective,” Allison S. Gabriel, Arik Cheshin, Christina M. Moran, Gerben A. van Kleef, Human Resources Management Review, 2016.
  9. With CX, Engaged Employees Mean Everything,” Bruce Temkin, Customer Relationship Management, 2016.
  10. “The Multilevel Nature of Customer Experience Research: An Integrative Review and Research Agenda,” Anne‐Madeleine Kranzbühler, Mirella H.P. Kleijnen, Robert E. Morgan, Marije Teerling, International Journal of Management Reviews, 2017.

ABOUT THE AUTHOR

Stacia Garr

Stacia is a Co-founder and Principal Analyst for RedThread Research and focuses on employee engagement/experience, leadership, DE&I, people analytics, and HR technology. A frequent speaker and writer, her work has been featured in Fortune, Forbes, The New York Times, and The Wall Street Journal as well as in numerous HR trade publications. She has been listed as a Top 100 influencer in HR Technology and in D&I. Stacia has an MBA from the University of California, Berkeley, and a master’s degree from the London School of Economics.