What does Employee Experience mean?
Employee experience, sometimes referred to as EX, is a relatively new term that encapsulates what employees encounter over the course of their tenure at an organisation from recruitment through to exit.
As long as there have been employers and employees there has been an 'employee experience'. So why is this gaining so much traction now?
Recently, studies have shown organisations that focus on improving their employee experience reap greater benefits in terms of productivity, returns, and employee retention. In 2017, Jacob Morgan's book "The Employee Experience" analysed the employee experience of over 250 global organisations. He found companies that scored highest on employee experience benchmarks have 4x higher average profits, 2x higher average revenues, and 40% lower turnover compared to those that didn’t. His research demonstrated that investment in employee experience pays off.
Covid-19 and Financial Wellbeing
The global pandemic has put greater stress on employees worldwide. A recent Willis Towers Watson survey found that 70% of employees report having new financial concerns due to COVID-19. The National Forum for Health and Wellbeing at Work (NFHWW) has expressed it's now imperative that businesses step up to protect employees from the potential “financial and mental trauma” posed by COVID-19 and the looming recession. It will take years for the economy to fully recover from the pandemic, with the younger generations taking the brunt of it for longer. Sir Cary, Co-Chair of the NFHWW, argues for "financial wellbeing to urgently become one of the central pillars of employee wellbeing strategies and for greater investment in resources and tools to support employees across all sectors".
Workplaces have a duty to support their employees' financial wellbeing ensuring that people feel comfortable in their economic futures and supported by their workplace. Organisations are increasingly recognising the importance of this and putting financial wellbeing at the top of their employee experience agenda.
Pensions and Positive EX
For most employees, their future financial situation is dependent on their workplace pension. Canada Life finds pension wealth represents nearly 20% of the average person's wealth, making it one of the largest assets most people will have in their lifetime after property. In 2020, 78% of employees in the UK were enrolled in a workplace pension (Office for National Statistics). Yet as many as 72% of employees are not actively engaged with their workplace pension (Atlas Master Trust).
Workplaces make a significant financial contribution to employees' workplace pensions, so it’s important they are aware of this important benefit they’re receiving. But beyond just awareness, working to actively engage and educate employees with their pension can also significantly improve their overall future financial wellbeing. Some 45% of employees would be willing to save more for their future if they had a better idea of how pensions worked, according to Capita Employee Benefits’ Employee Insight Report.
At Tumelo, we've seen that when employees have the opportunity to actually explore their pension's investments they gain a better understanding of how their pension is being managed and reportedly feel comforted by the sheer diversification of their investments. We have also seen that members become more engaged in their pension when they feel they're having a positive impact. A report by Franklin Templeton finds that significantly higher contributions could be invested annually by employees if responsible investing was incorporated into their pension, particularly for the younger generations. Business in the Community also finds that while 70% of people across the UK want their money to help people and planet, only about 5% of businesses align their pensions with their sustainability targets.
Investing in financial education and wellbeing, particularly relating to employees' lifetime savings, is without-a-doubt essential for a positive employee experience post-pandemic. Solutions that also incorporate positive impact and sustainability factors are likely to see greater results in the workplace.
We will be diving into this topic in greater depth on September 9th at 1pm in a virtual discussion with expert speakers. We will be discussing what workplaces can do to support their employees' pension experience as well as how sustainability factors can play an important role.
Join the conversation here: "How much do employees care about their pension and sustainability?"