What Is Employee Experience (EX) and Why Is It Important?

The workplace has changed dramatically in recent years, there’s no doubt about that. 

Rapid technological advancement and other external factors have led to major changes in companies around the world, making some industries virtually unrecognizable compared to what they looked like only a decade ago.

One such major change is the rising importance of employee experience – EX, for short.

Today, we’ll take a closer look at: 

• What employee experience is, 
• How it can benefit your company, 
• What an EX strategy entails, and 
• How you can take steps to implement and improve your strategy as time goes on. 

How do you define employee experience?

Employee experience refers to an individual employee’s subjective experience with every facet of an organization — from the first stages of recruitment to their exit interview. 

Employees will inevitably have both negative and positive experiences while working at your company. However, ensuring a predominantly positive employee experience is key to acquiring and retaining good employees, and it’s an important building block for any successful business.

We’ve reached out to Isidora Mirosavljevic — an HR generalist at CAKE.com — for her input on the subject. Here’s her definition of employee experience: 

It’s also important to draw a distinction between employee experience and employee engagement. 

While the former deals with the entirety of an employee’s experience at a company, employee engagement mainly focuses on how committed the employee is to their job and the company. 

One of the main goals of any employee experience strategy is to improve engagement, so while the 2 terms aren’t interchangeable, they are closely tied together.

Why is employee experience important?

An employee experience survey from Willis Tower Watson showed that a whopping 92% of employers agreed that employee experience will be an important factor in shaping the professional landscape in their industry.

That said, there are many benefits to investing in employee experience at your company, but the 4 most important ones include:

• Increased employee retention,
• Increased productivity,
• Improved customer engagement, and
• Easier future recruitment.

Benefit #1: Increased employee retention

There’s no overstating the importance of employee retention in regard to long-term growth and profitability — employee attraction and retention research from Gallup shows that replacing an employee can cost anywhere between 50% and 200% of the employee’s yearly salary.

And why is employee turnover so costly?

At face value, it’s easy to see factors such as:

• Costs of job advertising,
• Third-party recruiter fees, and
• The drain on in-house HR resources.

However, employee turnover has other, less obvious detrimental effects on productivity. 

Losing a valued team member is never good for morale, and onboarding new employees can take time — which also means reduced productivity in the period following recruitment.

Benefit #2: Increased productivity

High employee satisfaction will always lead to better engagement, which reflects positively on the bottom line. 

According to an employee engagement and satisfaction study from Gallup, good employee engagement can lead to a 23% increase in profitability for the business.

Benefit #3: Improved customer engagement

Employee experience and customer experience are closely linked. 

A satisfied employee who has had a positive experience working at your company will be more engaged and put more effort into excelling at their role — leading to increased customer and client satisfaction.

Benefit #4: Easier future recruitment

Recruiting new talent can be time-consuming and expensive. 

However, a positive employee experience can facilitate future recruitment by helping build a favorable image for your company and brand in industry circles. 

Not to mention that employees are far more likely to recommend your company to their professional acquaintances if their experience is positive, and referrals are more profitable on virtually every front — from base recruitment costs to long-term retention and profitability.

What are the 5 stages of employee experience?

Employee experience is commonly broken down into multiple stages. 

The exact number of stages may vary depending on who you ask, but when reduced to the fundamentals, there are 5 core stages of employee experience:

• Recruitment,
• Onboarding,
• Retention,
• Growth, and
• Offboarding.

Stage #1: Recruitment

The first stage deals with attracting and recruiting new employees. This stage typically involves:

• Job advertisements,
• Reaching out to prospective candidates, and
• The candidate’s interactions with HR and other personnel involved in the recruitment process.

First impressions are important, and the initial stages of the recruitment process are crucial to leaving a positive impression on new candidates.

Stage #2: Onboarding

After a candidate accepts the job offer, the next stage is onboarding. This refers to the initial acclimation period where the employee gets accustomed to their new position and the company in general.

This stage of employee experience is easy to overlook or mishandle, as an employer would naturally want to get new hires up to speed quickly to maximize productivity. 

However, an acclimation period is crucial to setting a solid foundation for long-term employee retention, especially in the age of remote and hybrid work.

The onboarding phase should last no less than 2 to 3 months, during which time the employee will:

• Learn about company policies and culture,
• Meet and integrate with their team,
• Get accustomed to the dynamics of their work environment,
• Learn about the tools they will use, and
• Take part in various onboarding activities devised by the HR department.

Stage #3: Retention

Following a successful onboarding process, the next stage requires employers to take steps to retain their employees for the long term. 

This is by far the longest and most complex part of any employee experience strategy, and here’s what Isidora had to say about it:

That said, data collection is a major part of this stage. Depending on the size of the team and the company, it can be collected through:

• Employee experience surveys,
• 1-on-1 meetings, 
• Team meetings, or
• Relevant KPIs.

This data will then indicate weak points in your current strategy, allowing you to take steps to improve it and keep your employees engaged and motivated. 

We’ll also mention some useful data collection tools you can use below.

Stage #4: Growth

Tied closely to the retention stage, the growth stage deals with an employee’s ongoing professional development — both in terms of their overall career and as a member of your organization.

To help their employees’ professional development, employers can:

• Create development plans,
• Organize in-house training programs,
• Have training courses by third-party experts, and
• Send employees to professional seminars.

In addition to career development, it’s also important to make sure employees have room to grow and advance within your company. 

A lack of advancement opportunities is also a major contributing factor to employee turnover. So, if hard-working employees don’t get promoted, they will likely look for opportunities elsewhere.

Stage #5: Offboarding

When it comes to employee experience, the last impression can be as important as the first. 

Sooner or later, employees will leave, which can happen for any number of reasons. They might get a better offer elsewhere, switch careers, seek to advance to positions that are not open at your company, etc.

This stage mainly comes down to a proper exit interview and an exit survey. 

Here, the employer gathers feedback, considers how the employee’s departure will affect the organization, and ensures that the employee leaves with a positive image of the company.

Ultimately, a positive exit experience means a former employee is more likely to recommend your company to others, and it leaves the door open for them to potentially return to your company at a later time.

What are the challenges to establishing a positive employee experience?

Now that we have explained what a positive employee experience is and what the key stages are, let’s take a look at the biggest challenges you’ll face when developing your strategy. 

Challenge #1: Optimizing processes and systems

The first (and usually biggest) challenge is adapting your workflow and work environment to improve the employee experience. 

Adapting to changing conditions in a large organization is never easy. It’s made all the more difficult when something that’s beneficial for employee experience might not be beneficial for the overall performance.

For example, a communication tool that you’ve been using in the first few years of starting your business might no longer be an ideal fit now that you have a larger team. To improve employee experience, you’d need to invest in a more feature-rich but more expensive app that would put a strain on your budget.

Challenge #2: Establishing a good work-life balance

Ask any expert, and they’ll likely tell you that the cornerstone of a positive employee experience is ensuring a good work-life balance for your employees. 

Unfortunately, this is often easier said than done, and as many as 77% of full-time employees have experienced burnout at their jobs.

Based on the industry or the nature of a particular department, employees may be required to stick to rigid schedules, work overtime, work weekends, or invest time in work-related activities that don’t normally fall under their official responsibilities. 

In such situations, maintaining a good work-life balance is much more challenging.

Challenge #3: Improving the onboarding process

Onboarding is crucial to integrating new members into a team and retaining them for the long term. However, onboarding research from Gallup shows that only 29% of employees feel confident in their roles after their onboarding experience.

In practice, onboarding can be a challenge for small and large organizations alike, albeit for different reasons. 

For example, smaller companies may need new hires to get up to speed as quickly as possible to keep things going smoothly. 

Meanwhile, larger and growing companies might not have the resources to provide proper onboarding for each new employee.

Challenge #4: Collecting data regularly

A positive employee experience isn’t an end goal but a balance that every business must always strive to maintain. So, a company must keep collecting data and adapting to changing situations and employee expectations.

This is particularly challenging for larger organizations, for obvious reasons. The more employees you have, the harder and more time-consuming it is to collect and analyze quality data. 

Just the same, implementing changes based on said data can also be quite resource-intensive. 

Challenge #5: Building and maintaining trust

According to Isidora Mirosavljevic, establishing trust might be the biggest challenge you’ll encounter:

Additionally, trust is something that’s difficult to gain but easy to lose. You could devote a lot of time and resources to earn an employee’s trust, and it would take relatively little to significantly undermine it.

How to establish a positive employee experience and improve it further

Establishing a positive employee experience across the board is a challenge — however, it’s far from impossible. 

If you wish to secure a positive experience for your employees, here are 6 tips that should provide a solid foundation:

• Know your industry,
• Know your employees,
• Educate team leaders and managers,
• Tru and implement remote or hybrid work,
• Consider employee well-being, and
• Don’t forget the whole.

Now, we’ll go over each of these tips in greater detail.

Tip #1: Know your industry

No business is an island, as they all operate in ever-changing, competitive industries. And the first step to establishing a positive employee experience within your company is to know what’s happening outside of it.

Since most employees you’ll be onboarding will have prior experience in their line of work, you have to raise the bar – or, at the very least, not lower it. 

To do this, it’s important to maintain awareness of the culture and conditions offered by other businesses in your industry. 

To further illustrate just how important this is, research into company attrition amid the Great Resignation by MIT Sloan has shown that a toxic work culture has a 10.4 times greater effect on attrition rates than compensation does.

Tip #2: Know your employee

Each employee is unique, and employee experience is highly personalized by nature.

As such, if you wish to provide a positive experience, it’s crucial to get to know your employees, both as individuals and as professionals.

Tip #3: Educate team leaders and managers

To most employees, their manager or team leader is going to be more than just the first upper link in the chain of command. 

They will be a teacher and mentor who has a large role to play in establishing team culture and building an atmosphere of trust for new employees in their respective teams.

To illustrate just how important a role a manager plays in employee experience, research from DDI has shown that 57% of employees left their jobs because of bad managers. On top of that, 32% have seriously considered leaving for the same reason.

As such, it’s crucial to keep managers and team leads involved in the ongoing development and execution of the company’s employee experience strategy.

Tip #4: Try and implement remote or hybrid work

One of the few positive things to come from the COVID-19 pandemic was that it showed companies around the world that there was a different way to do things. 

Virtually overnight, remote work went from niche to standard. As the latest remote work statistics show, almost 41% of full-time employees work remotely or based on a hybrid model in 2023.

So, even now that the storm has passed, many businesses find that remote or hybrid work reflects positively on their bottom line and on employee experience. 

It has become common practice in many industries, and even if your business isn’t one that would traditionally accommodate remote or hybrid work, it stands to offer many benefits.

That said, looking for ways to implement remote work and meet employee expectations — such as by implementing virtual project management techniques and investing in remote work tools — would be a good place to start.

Tip #5: Consider employee well-being

It’s impossible to establish a positive experience without considering the physical and mental well-being of the employee. 

Naturally, there are many factors to take into account when talking about something as multifaceted as employee well-being.

So, in addition to keeping the previous tips in mind, you’ll also want to:

• Ensure teams are adequately staffed to minimize stress and overtime,
• Create an atmosphere of trust and responsibility, 
• Plan out stable schedules and working hours, 
• Give employees freedom and agency in how they approach their work, and
• Maintain communication with employees about their job satisfaction.

As you’d expect, employee well-being is important when it comes to retention, and as Gallup’s research shows, thriving employees are 32% less likely to look for a new job.

Tip #6: Don’t forget the whole

An employee experience strategy is a complex whole, and you should never dismiss a particular element of the strategy as “less important.” 

This is precisely what Isidora told us when we asked her for a pro tip on developing a successful strategy:

How to design an effective employee experience strategy

If you’re wondering how you can start implementing an employee experience strategy at your company, here are the main steps you need to take.

Step #1: Have personnel dedicated to employee experience

If you plan on making employee experience an important part of your success strategy, the first step should be to put someone qualified in charge.

This might be an HR generalist, a specialist employee experience manager, or even a team of HR professionals.

Of course, the number of people you need dedicated specifically to employee experience is going to depend on:

• The size of your company,
• Your budget, and
• The specifics of the EX strategy.

Whatever the case, it’s important to put an expert at the helm and have someone who can focus on creating and maintaining a good strategy.

Step #2: Collect employee feedback

Before you can begin devising and implementing a strategy, you need to know what to focus on. As such, the second step is to collect employee feedback through surveys and interviews. 

Generally speaking, surveys are excellent for collecting data about key factors on a company level, but 1-on-1 interviews are key to providing a personalized experience for each employee. 

As such, you’ll have to utilize both if you wish to collect quality data efficiently.

Step #3: Invest in EX based on feedback and weak points

After you have the relevant data, the next step is to put it into practice. 

Use it to analyze your current situation, isolate the main issues regarding the employee experience at your company, and take concrete steps to address them.

Step #4: Continue to monitor changes and adapt

After it’s put in place, the employee experience strategy needs to be monitored as time goes by. So, the next step in the process is to determine a set of KPIs relevant to your strategy so that you can:

• Identify beneficial factors and activities,
• Identify new weak points,
• Devise new strategies, and
• Improve existing ones.

Moreover, it’s important to continue collecting information from employees, both through surveys and interviews.

To ensure continued success, you need to consider all the data you collect and take concrete steps to update and improve your strategy. 

Essentially, you need to keep repeating steps 2 through 4 as time goes on to stay ahead of the curve and ensure your strategy remains effective and viable.

Positive employee experience examples

Wondering what positive employee experience looks like in practice? Here are some examples.

Example #1: Acknowledgment

Every employee likes to have their contributions acknowledged, even if the contribution or the acknowledgment is relatively minor. 

In fact, according to a survey from Bonusly on the importance of employee appreciation, as many as 46% of the 2,000 employees surveyed had left a job due to a lack of acknowledgment.

By acknowledging an employee’s work and effort privately, publicly, or during team meetings, managers can contribute a lot to integrating a new member into a team at no real cost. 

Example #2: Independence in work 

Every company should strive to do the best it can to provide its employees with freedom and independence in terms of how they approach their work, especially considering that – according to Forbes – 71% of employees feel micromanagement negatively affects their performance.

By shifting the focus from time invested to results achieved, managers can not only enhance employee experience but also develop a culture of personal accountability in their team.

Example #3: Flexible working hours

Tying back into the importance of a healthy work-life balance, and according to Deloitte’s workplace flexibility survey, allowing employees flexibility in their working hours can increase morale by 33% and productivity by 29%.

An employer could let employees choose:

• When their work day starts,
• How many hours they work in a day, 
• How many days they work per week, as well as
• How many breaks they take and how often.

Many positions that don’t involve interacting with clients or don’t require a lot of communication with colleagues can be awarded a great degree of flexibility – “so long as the deadlines are met” or “so long as 40 hours are logged at the end of the week.”

Ultimately, this can provide an employee with a better work-life balance, and it shows them their employer trusts them to handle their work responsibly, without unnecessary restrictions or micromanagement.

Example #4: Weekly check-in meetings in the onboarding phase

Organizing weekly meetings with new employees can be a great way to improve the onboarding process and improve the overall employee experience.

Through these meetings, HR personnel can:

• Get first-hand insight into how new employees are taking to their positions,
• See how well the employees are integrating into their respective teams, and
• What their overall experience looks like over the course of the onboarding process.

Meanwhile, the employees can:

• Voice their concerns and ask questions,
• Interact with other employees outside their own team, and
• Start integrating into the company culture.

What is an employee experience survey?

For the most part, surveys are going to be the main way for you to collect data on your employee experience strategy. 

While interviews can be a lot more precise and provide more extensive information, conducting them regularly in larger organizations can be quite time-consuming — if not downright impossible.

So, while surveys are not as precise as interviews, they provide important general insight into the performance and weak points of your strategy. Plus, they also highlight the key points you can focus on in interviews.

Generally, employee experience surveys can be divided into:

• Candidate surveys — information about the recruitment process collected from all candidates,
• Onboarding surveys — feedback regarding the onboarding process,
• Engagement surveys — information regarding employee engagement,
• Professional development surveys — information on the efforts to further the employees’ professional growth, and
• Offboarding surveys — information related to an employee’s departure from the company and the offboarding process.

Of course, this list is by no means exhaustive, and the exact types of surveys and their contents will depend on your employee experience strategy.

Wondering what a general employee experience survey looks like? Take a look at our sample survey below:

🔽 Plaky employee experience survey template

5 Employee experience tools to use

Finally, here are some useful tools you can use to help plan, organize, and execute your employee experience strategy.

Tool #1: Plaky 

A good project management tool is a must-have in this day and age, and Plaky might just be the one you need. The app was launched relatively recently in 2022 but has grown and expanded quickly, making it one of the best options in 2023.

So, what makes it stand out, and how can it help your employee experience strategy?

First and foremost, Plaky provides an HR project management hub with all the PM essentials, with unlimited projects, tasks, and users in the free plan. 

Moreover, it also comes with several useful HR management templates, such as the:

• Recruitment template,
• Onboarding template, and
• HR requests template.

Overall, it’s a convenient and powerful tool that’s well-suited both for experienced employee experience specialists and those who are still learning about HR project management. That said, Plaky can be a great asset for any organization seeking to improve employee experience on every level.

Tool #2: Google Forms

Next, Google Forms is a simple and robust free app that anyone can use to conduct surveys quickly and easily in organizations of any size. 

It has all the core features you’d expect to find in a survey tool, such as:

• High customizability,
• Multiple question types,
• Streamlined anonymous data collection,
• Convenient data analysis, and
• Many useful templates.

Tool #3: Clockify

Every organization that aims to be efficient needs a time-tracking tool, especially those that involve remote work or independent contractors. 

This is where Clockify comes in, as it’s a powerful tool that offers a number of useful features. This includes time tracking and reporting, as well as several useful management features.

On the time tracking front, the app allows users to:

• Track time spent on projects automatically or manually,
• Edit and review their timesheets, and
• Plan work time and schedules in the calendar view.

The app also gives users a clear overview of important data with:

• A comprehensive dashboard, 
• Several types of exportable reports, and
• An activity monitor that tracks locations and takes screenshots.

On top of all that, the app also has several features that simplify management and finances, such as:

• Invoicing, 
• Expense tracker,
• Scheduling, and
• Time off management.

That said, Clockify is a useful and highly versatile tool that’s easy to use. 

We’ve already mentioned the importance of efficient time management and quality tools for employee experience, so all things considered, this app makes things easier for everyone involved.

Tool #4: Pumble

You’ll hear it time and time again — communication is key to a good employee experience. And in this era of remote and hybrid work, it’s more important than ever to choose the right communication app. This is where Pumble comes in.

This team chat app has all the features you’ll need for hassle-free communication in teams of any size, with no price tag attached. 

Specifically, Pumble lets you:

• Create as many channels as you need and organize them into groups,
• Communicate through threads to prevent channel clutter,
• Communicate through DMs with anyone in the workspace,
• Save important messages and announcements,
• Send scheduled messages,
• Share files, along with voice and video messages, and
• Organize group calls and video conferences.

The app is also available on Windows, macOS, Linux, iOS, and Android and can be accessed via a web browser. That said, team members can communicate freely, regardless of what type of device they’re using.

As mentioned before, team cohesion is important, and it can be more difficult to maintain a sense of community if some or all members of the team are working remotely. 

As such, apps like Pumble are not only practical but also useful for improving this particular facet of digital employee experience.

Tool #5: BambooHR

As a popular and versatile tool, BambooHR excels particularly when it comes to tracking employee satisfaction. 

It has a number of useful features for HR management, including:

• Gathering information,
• Keeping records,
• Managing payroll,
• Managing time off,
• Onboarding,
• Offboarding, and more.

Most notably, BambooHR’s most important feature when it comes to employee experience management is its employee satisfaction survey. 

It’s a convenient tool to collect input from employees with complete anonymity, followed by detailed analytics that will allow you to easily identify weak points and improve your strategy.

Of course, BambooHR might not be ideal for everyone, so if you’d like to learn more about some viable alternatives, take a look at our selection of the best HR software solutions for small businesses in 2023.

A positive employee experience can make a world of difference

Any growing business should prioritize long-term growth over short-term profits, and a strong employee experience strategy embodies that perfectly. 

While it may seem like a considerable strain on the company’s resources at face value, you will see the investment returned several times over due to reduced turnover and increased engagement.

To make sure your employees have a positive experience, you must have a well-organized workflow. This is easily achieved with the right PM software. Plaky is a customizable tool that’s simple to use and enables you to organize your workflow so that everything runs smoothly. Sign up for Plaky’s free account today and manage your projects with ease.