- American workers are now more introspective, thoughtful, and discerning than they’ve perhaps ever been.
- For employers, crafting employment value propositions that align with the new social contract of work can no longer be a passive project.
- Companies that want to win in the current talent wars would be wise to listen to the growing chorus of calls to embrace an employee experience design approach to managing their workers.
Over the past twenty-five years, many Fortune 500 companies have embraced qualitative customer experience (CX) research and design thinking as part of their innovation strategies.
Unfortunately, firms have been much slower to use design research to understand their own employees’ work experiences. One obvious reason is that customers represent potential future revenue, while employees represent costs. Until relatively recently, such logic has more or less made sense. But that seems to be changing.
In light of the epochal transformations that have occurred in the world of work during and since the pandemic, the quality and sustainability of companies’ employment value propositions (EVPs) have become increasingly urgent issues. Data from the Great Resignation is instructive. In 2022 alone, around 4.2 million people quit their jobs each month, totalling over over 50 million resignations for the year. Additionally, some research suggests that in 2023 70% of workers say they are ready to quit their jobs.
When one looks deeper into data on employee expectations for hybrid working, the numbers become even more alarming. According to McKinsey, 87% of workers would embrace hybrid work if it were offered, while CNBC reports that 64% of workers would quit their jobs if their current hybrid schedule was taken away. At the same time, around 50% of leaders want their employees back in the office five days a week. Going forward, threading the hybrid leadership challenge will be a critical leadership capability.
The Great Resignation has turned into the Great Mismatch between employer and employee expectations about the future. To avoid a further crisis of trust, forward-looking companies are looking soberly at the costs (financial and reputational) of maintaining EVPs that are out of touch with the post-pandemic social contract. Replacing valuable employees can cost several times the annual salary when all the lost productivity is factored in. Then there is the loss in institutional knowledge, relationships, and organizational capabilities.
EX Design: Employees as Customers
High-profile return to office (RTO) mandates notwithstanding, many companies are addressing the changing employer-employee dynamic and are starting to value employees the way they do customers. For these firms, the application of design thinking and design research to innovate the employee experiences is the logical next step.
IBM, in particular, has thoroughly committed to EX design. According to IBM, there are three interrelated elements that shape employee experience: physical environments, social connections, and the actual work to be done.
1. Physical Environments
For many generations, the workplaces that companies provided their employees were something of an afterthought. Cubicles, open-plan offices, and loud bull pens were given to the rank and file, while senior staff luxuriated in private offices with personal assistants on upper floors. In the new social contract, companies simply have to do better. Greater choice and flexibility, activity-based working (ABW) solutions, and of course hybrid options, are no longer optional or “nice to haves.”
Going forward, companies that “do hybrid” simply through scheduling (2 or 3 days/week at the office, etc.) rather than through a fundamental redesign + strategy + technology, will continue to lose talent to companies that are genuinely moving towards an EXD approach to managing people. And of course, working from home will be a central feature of our future physical environments.
2. Social Connections
Companies such as Automattic (parent of WordPress) and GitLab, which are both 100% remote companies and maintain healthy and vibrant company cultures, do so through the innovative use of open communication technologies that sustain daily and transparent peer-to-peer learning. These firms demonstrate that social connection can be maintained in virtual organizations.
However, most companies that are not tech companies still benefit from in-person working as a way to forge and sustain strong social ties. Thus, as it relates to the first point (above), it falls on companies to reimagine (and redesign) workplaces and workplace experiences where employees will voluntarily show up even when they are not required to be there.
3. The Work that is Done
The actual work that people do in an organization is arguably the most important element of employee experience. This is literally what your people do everyday. Are employees grinding away in endless cost-cutting exercises or scaling existing products or services? Or are they using their full creative muscles to either improve existing processes or contribute to new product/service development?
Companies such as 3M, Google, Haier, and W.L. Gore bake-in time during employees’ week, outside of their regular assignments, to “dabble” toward creating new forms of value for the company. Many of W.L. Gore’s 1,500 products, such as the Elixir guitar strings, were created by employees dabbling outside of the regular jobs.
In these firms, innovation is as much an HR (or EX) issue as it is a business-growth issue. Research by Culture Amp underscores this, suggesting that “nearly 8 out of 10 highly engaged employees regard their companies as having a culture that nurtures innovation.”
The Power of EXD in the Talent Wars
The dynamics of the labor market over the past three years have confused economists. How can so many people be quitting their jobs while unemployment remains at or near all-time lows (3.6%)? Where are all the workers?
It turns out that as powerfully symbolic as the Great Resignation has been from a statistical perspective, what’s behind the numbers is even more powerful. The Great Resignation is also the Great Domestication — a once-in-a-lifetime opportunity for people to rethink their values, lives, and careers.
American workers are now more introspective, thoughtful, and discerning than they’ve perhaps ever been. Crafting EVPs that align with the new social contract of work can no longer be a passive project. Companies that want to win in the current talent wars would be wise to listen to the growing chorus of calls to embrace an EXD approach to managing their people.
