Enterprise, Channel markets

Investing in Employee Experience: Is There An ROI?

Author: Avanade's Ken Ramoutar

Come on, is it really true that investing in employee experience will pay off in better customer experiences or improved business performance? Intuitively, yes it does. But when it comes down to fighting for corporate investment dollars, what projects generally win out?

  • The ones that save lots of money? Yes!
  • The ones that have a direct impact on sales and customer growth? Yes!
  • The ones that make it easy for employee to collaborate, make decisions, and provide better customer service? Maybe.

In fact, many studies show investments in employee experience rank much lower in preference than other competing projects. One big reason is that it’s hard to show a direct connect from employee experience (EX) to customer experience (CX).

Do better employee experiences equate to better customer experiences? According to MIT Center for Information Systems Research, the answer is a definite yes. Better employee experiences do impact business performance. In particular, for companies that invest the most in employee experience yield valuable results:

  • Net Promoter score (NPS) doubled
  • Revenue from products introduced in the past 2 years doubled
  • Profitability up 26%

Also, according to Jacob Morgan’s HBR article, “Why the Millions We Spend on Employee Experience Buys us So Little,” there is evidence of systematic business gains for those companies thinking longer term. Compared with other companies, the experiential organizations had more than four times the average profit and more than two times the average revenue. They were also almost 25% smaller, which suggests higher levels of productivity and innovation.

The net is, there is some solid evidence that investing in employee experience drives improvements in profitability, net promoter score, revenue from new products, and productivity. Many companies should take a fresh look at the potential impact of employee experience investments.

Bonus: Learn more about how to implement a digital workplace and see examples of the future of work.

Ken Ramoutar is senior vice president of marketing at Avanade. Read more Avanade blogs here.