The term “Experience Economy” was first used by B. Joseph Pine II and James H. Gilmore, in a Harvard Business Review study, describing the booming demand from buyers for superior customer experiences (CX). To provide meaningful experiences, companies needed to understand their customers and build trusted relationships. This was achieved with the collection and analysis of the experience data. Today, the experience economy has further evolved, extending to the experiences companies create within their workplaces.
The Employee Experience (EX) Economy
The experience economy is especially important to younger staff at work. The median tenure for workers aged between 25 to 34 is 3.2 years, compared to 10.3 years for employees aged 65, according to the US Bureau of Labor Statistics. To keep their best young talent today, the future leaders of the company, managers need to build moments of truth and treat them the way organizations are treating customers.
Due to new technologies and automation, McKinsey predicts that 65% of children entering primary school today will ultimately end up working in jobs that don’t even exist yet. This rapidly changing face of the workforce means that it is increasingly likely that leaders would be managing people who are more skilled technically than they are, or possibly even performing tasks they have had no experience in before. Indeed, just 15 years ago the jobs of Digital Marketer or Data Scientist didn’t exist except in the most esoteric of companies - today, it’s hard to imagine any company succeeding without them.
Managers then need to learn how to enhance the employee experience and leverage data to make good decisions about motivating their staff, especially where they are in an unfamiliar job territory. One example would be in recognising research around employee needs and engagement. The employee hierarchy of needs for increased engagement doesn’t deviate far from what looks like Maslow's hierarchy of needs; once you have met the lower level needs (essential resources), you are expected to address higher levels of self-actualisation, the sense of purpose and individual achievement. For the leader in this case, connecting daily tasks with a meaningful purpose will increase employee's involvement in their responsibilities.
Organizations have to find the best formula to engage employees promptly. A strong culture and a common purpose will strengthen the employee’s trust in the company. In particular, in the case of intense growth, organizational changes, or uncertainty that can be identified as a threat by talent.
The rise of Intelligent enterprises
This recent interest in employee experience is due to the manifested correlation between employee engagement and the bottom line of the company.
This consciousness not only concerns tech-savvy industries but every industry. Traditional sectors like healthcare, retail, or banking should be even more concerned. Companies with a high volume of employees are often extremely dependent on the customer’s experience and service standards, which is intimately related to their employees’ motivation.
However, connecting engagement with business results in the traditional way through the annual engagement survey creates operational drag, and data latency challenges. HR needs to be equipped to efficiently collect and analyze employee experience data without unnecessarily expanding headcount or dedicating a team to the endeavour.
Technology plays a critical role in enabling organizations to understand what motivates people and make sense of decisions. Experience data, when analysed skilfully, serves as a reliable leading indicator of operational data. Continuously monitoring the correlation between engagement and business results by leveraging HR tech software, intelligent tools, and real-time analytics can empower HR to make business-relevant predictions and mitigate against service disruptions from any structural change.
This level of people analytics maturity requires the ability for companies to break data silos and speed up the time to process an increasing volume of data. Removing tedious administrative tasks by deploying technology allows HR to focus on the emotional component of their responsibilities to improve employee experience and sense of belonging.