A guide for tracking the return on employee experience


Experts explore the value in shifting from a return on investment to a return-on-experience mindset.

The concept of return on investment is widely understood. It’s simply a matter of bang for your buck. However, as HR leaders who need to implement various solutions to improve the employee experience, you may find it is often a complicated endeavour to explain the financial return on expenditure towards something so intangible. A better metric to consider is the Return on Experience (ROX). That is the extent to which improvements in the customer and employee experience will drive profits and revenues.

Measuring this kind of metric is tricky as it requires a fundamental mindset shift, from thinking about products and services to customer experiences; and from company processes and benefits to employee experiences, none of which can be easily measured because there are many inter-linking and interdependent elements.

ROX provides a way to holistically look at all parts of the business that impacts experience, productivity and effectiveness.

“But what are those correlations that make a meaningful difference which, when multiplied, provide exponential value,” asks PwC South Africa’s leader for HR Technology and Culture, Barry Vorster. He, together with PwC South Africa People Analytics leader Bernice Wessels, Microsoft SA Business Applications  Lead, Natassia Katopodis,  and PwC Senior Manager Robert Sutherland, have pulled together their thinking on ‘employee experience’ in an effort to elicit dialogue that results in a  widely accepted, community-built, robust technique for measuring the return on experience

Microsoft SA Business Applications lead Natassia Katopodis says that, with Covid-19 changing the world of work “as we know it, employee experience has become the most important element of managing people, who are now detached from a centralised place of work. We need to hit refresh and transform the employee value chain and rethink assumptions about what was previously viewed as best practise to provide an exceptional employee experience.”

“Remote working has gone from something that was a nice-to-have option in companies’ employee value propositions to a reality that every single organisation has had to adjust to whether they were prepared for it or not,“ says Natassia, adding that mandatory remote working has brought with it a new set of challenges with regard to the employee experience.  

Natassia says it is now more important than ever for companies to be able to have real-time information and updates on how their employees are performing, feeling and engaging with the company.

“And to do that, companies need data from across the enterprise including a 360-degree view of the employee to create new and enhanced employee experiences,” says Natassia.

Culture is the key

Barry says the organisational culture speaks to the ability to mobilise emotional and rational forces within an organisation to reinforce new behaviour patterns required to underpin lasting change.  The trick is often to uncover the causal and mutually reinforcing loops between the two and to show how shifts in one affect the others.

Employees who are suffering physically, mentally or emotionally, for instance, miss more days of work and are less productive when they are working.  Chronic stress, too, could lead to an employee losing an average of 10 day's productivity a year due to absenteeism and an additional 12 days a year due to presenteeism. These are the touchpoints to look for when evaluating an organisational culture.

Says Barry: “It’s about being able to measure either an organisation’s cultural health or just depict the cultural situation as good and bad.  This is a delicate area and we would suggest the use of an index or a percentage change from a base index as the unit of measure – effectively benchmarking against yourself. Because you cannot copy a culture. Each organisation should find and leverage its own cultural strength.

There is also a link between employee engagement and wellbeing with low engagement often correlate highly with taking more unhealthy days, depression, high blood pressure, and so forth, while employees with high engagement tend to fall sick less often. A new and emerging factor that has started to affect employee experience is substance dependence, as this profoundly affects availability, productivity and engagement.

Show people you care

By having a seamless platform to engage, Natassia says it becomes a lot easier to take action that will enhance the employee experience before a problem arises.

“For example, we can see now that with people working from home, productivity levels have gone through the roof. People are working harder than they have ever done. The downside of that employees are not switching off and there is a much higher risk of burnout and stress-related illness,’ says Natassia, adding that having a dashboard where companies can monitor the activity or employees and run quick pulse surveys to learn about their wellness, can make the process of managing that risk far easier.

That is where it becomes important to incorporate tools, such as Microsoft Dynamics 365 Human Resources, which is an HR solution that helps take better care of your teams. This system offers an array of ways to foster employee connections and empower managers to influence the key drivers of the ROX. Expanding this toolkit, Workplace Analytics, which taps into data from everyday work, identifies collaboration patterns that impact productivity, workforce effectiveness, and employee engagement. Having such a unified view and the toolkit to take action helps speed transformation.

"Dynamics 365 has AI-driven insights and real-time dashboards that allow managers to monitor performance metrics for overall employee satisfaction scores and benefit from real-time insights based on customisable variables,” says Natassia adding that the platform also makes it possible to gauge how the employee experience is affected by the physical workplace and environment, unbalanced workforce numbers, inefficient processes, and so forth.

Measuring employee experience

Bernice says that an increase in employee experience suggests an increase in productivity that leads to an increase in the effectiveness of processes, innovation and the customer experience, which ultimately leads to an increase in shareholder value. But what is the employee experience exactly?

Without simplifying matters, but for the sake of a succinct and practical formula, the PwC teams suggests that Employee Experience = Positive Culture (PC) x People Wellbeing (PW) x Learning Agility (LA), with each element in the equation serving as a multiplier in affecting employee experience

This formula, however, only represents a heuristic with which to firstly appraise your organisation and to set an ‘Ex’ baseline. It doesn’t provide a complete answer, but rather attempts to cover the key aspects that require attention should you want to create an organisation that creates an environment and a technique to measure the employee experience.

it would also perhaps be wise to create a healthy culture index for your organisation, based on your cultural traits and aspirations.  What is important is to triangulate culture and engagement data and supplement quantitative insights with qualitative dialogue,” says Bernice.

Improving employee experience

Rob says that, ultimately, ROX is an amplifier rather than a self-standing approach. At the core of the approach is to find a holistic (as opposed to an individualistic) perspective that has both quantitative and qualitative value. Knowing this as a value, an organisation can pull levers to drive performance, productivity and creativity. A company cannot manage what it does not measure and measure regularly. It requires that organisations set clear, ambitious targets for all the aforementioned elements of the employee experience and couple that with learning expenditure.

“But you have to monitor your targets regularly.  Expenditure on learning is not enough.  The environment and space within which to learn are crucial. Multiplying the expenditure on learning by the opportunity to learn on-the-job provides our measurement for organisational learning agility,” he says.

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