How to inspire 2.5 billion employees to care more

Business success is directly tied to employee experience and satisfaction.

In brief

• Positive employee experience has been linked to improved financial outcomes.
• Leaders should align with Gen Z’s work expectations to drive employee engagement and boost productivity.
• Data-driven insights are crucial for leaders to enhance employee satisfaction and drive growth.

How do organizations reframe their employee culture in a highly digitized work environment?

When employees reported daily to a shared physical office, organizations relied on long-standing HR methods for assessing KPIs such as employee experience, productivity and satisfaction. Those measurement tools are rapidly becoming outdated in a hybrid work model fueled by digital tools and virtual collaboration.

Ownership of the employee experience has moved beyond an HR priority to a C-suite business imperative.

Recent research by the EY-Qualtrics Alliance illuminates a clear connection between employee experience and financial performance. The survey by the EY-Qualtrics Alliance, based on 119 responses from executive leaders and 3,050 from corporate employees, indicates that the employee experience demands and deserves more focused consideration by business leaders.

Another recent study by Qualtrics approximated that nearly 2.5 billion employees around the world would work harder if they felt more valued and rewarded.¹ On the flip side, employees who are disengaged or ambivalent are less likely to strive for the above-and-beyond work performance that can elevate business outcomes in a thousand different ways, seen and unseen.

In an evolving, digitized, anytime-and-anywhere workforce being redefined by Gen Z, there is a widening gap between organizations that understand how to fully engage employees and those that don’t. It has never been more crucial for organizations to effectively measure and track the engagement and experience of their employees, and to use that data to enact change that will drive growth for their business.

Leaders who listen, learn and evolve with employees will see higher performance

The growing chasm between the expectations of employees and the responsiveness of executives stems from an over-reliance on perception rather than active engagement and investment in data. Research shows that while 75% of executives believe they consider the perspective of their employees when making decisions, only 47% of employees share that sentiment.²

At the same time, EY-Qualtrics Alliance found that firms with engaged employees see 80% higher customer satisfaction and half the employee turnover. Higher customer satisfaction and reduced turnover lead directly to higher revenue growth and profitability.

Employee engagement has been declining since 2020, according to ongoing research by the Gallup Organization, with only about 32% of US employees considering themselves “engaged” at work — defined by Gallup as “those who are involved in, enthusiastic about, and committed to their work and workplace.” Employees who are engaged respond with 22% higher levels of productivity, and companies with more engaged employees have seen 21% higher levels of profitability.³

For many companies, the employee experience remains largely in the hands of the HR function to define, deliver and maintain, in an increasingly digital environment.

Regardless of your corporate model, the range of nuanced factors that shape how people experience work — including digitized HR services, relationships with their manager and team, performance recognition, and access to appropriate tools to successfully perform their jobs — should be driven by regularly scheduled, standardized input to create data-driven perspectives that track employee feedback trends over time. That data can help business leaders create and sustain the work experience their employees want and expect, evolving in response to changing expectations and generational differences.

When executives work together to understand how employee experience affects business results, leaders can transcend the usual dashboards that report the “what” to reveal the “why” behind employee behaviors that impact business results. Deeper understanding and consideration can foster a work culture that inspires employees to bring their best.

Building bridges over generation gaps

There is a disconnect between leaders and employees around what, exactly, empowers outstanding employee performance. But Gen Z, the most recent generation to enter the workforce, is increasingly vocal about what will help bridge the gap.

As the future of the workforce, Gen Z’s needs and expectations today are the harbinger of what employee engagement will look like tomorrow. That means business leaders who look the other way are looking back, not forward.

By 2032, millennials, Gen Z and those that follow are anticipated to make up approximately 70% of the US workforce and are already beginning to move up the corporate ladder into leadership positions.⁴ More than any generation before them, Gen Z, the rising workforce of 17- to 27-year-olds born between 1997 and 2007, are reshaping the corporate employee experience. Ignoring their expectations for how they want to work will be a big miss for a lot of organizations.

In many ways, their approach to work is more bluntly transactional than their parents’. They don’t just want more, they expect more — including a sense of security, organizational integrity and transparency, support for mental health, reasonable compensation and benefits, and work flexibility. In return, they bring an entrepreneurial spirit, tech-powered thinking and a work ethic that’s not bound by an office or a clock.

For all employees, the post-pandemic hybrid work model continues to evolve. EY research indicates that 80% of employers are encouraging or requiring three or more days in the office a week. But while the majority of leaders continue to support a hybrid work strategy, only about 28% feel their employees are equally productive when working remotely.

To stay ahead of the curve, business leaders are in search of programs that integrate their organization’s experience data, financial data and operational data in tested research methods to analyze and act on critical employee metrics — notably, job satisfaction, performance and intent to stay. As Gen Z gathers force, these factors are more important now than ever.

EY-Qualtrics Alliance research shows that when business leaders across finance, operations, technology and HR work together, the power of that collective awareness and attention can enhance their employees’ experience and elevate business outcomes. And since word gets around, it can also help attract, engage and retain the most desirable talent of varying skill sets and ages.

A positive internal work experience has been proven to promote external brand loyalty and increase customer spending — ultimately delivering returns to the bottom line.

Every company wants to boost its profitability. Yet a surprising number of leaders are willing to sacrifice their employees’ experience to get it. The resulting financial performance gains are likely to be short-lived, because achieving long-term business value requires positive employee experience.

Build on the shared human experience

Changing an organization’s employee experience begins with expanding beyond HR to a collective executive leadership effort, using reliable data to build awareness, create goals and manage priorities. Following are a few key recommendations.

• Define a vision for employee experience: Leaders should use data to make a case for how enhanced employee experience can elevate operational and performance outcomes.

• Establish empathy and transparency across your organization: Organizations that lead with transparency and are open to employee feedback will inspire the trust necessary for employees to share real insights in return.

• Hear and understand employees: Clarify what matters to employees by collecting and analyzing organizational data. Correlating their experiences with business performance can unlock long-term value across all segments and sectors.

• Get leadership buy-in using data: Firms with engaged employees see 80% higher customer satisfaction and half the employee turnover. Higher customer satisfaction and reduced turnover lead directly to higher revenue growth and profitability.

• Include employees in the company’s decision-making: Ask employees about what’s important to them and use that data to make the case for better options. When you take action, customize and tailor it to a specific group of employees to encourage higher adoption and utilization.

• Take an incremental approach: Leaders who focus on what their employees care about most will help the business thrive. Track the incremental wins to support and celebrate the long-term gains.

The collaborative employee XM survey conducted by the EY-Qualtrics Alliance offers new insights into business leadership and employee alignment.

It’s no surprise that engaged employees equal business success. The real surprise is that in the midst of a digital HR revolution, leaders are still mired in outdated annual surveys that don’t fully capture data revealing measurable employee needs.