6 Ways Employee Experience Drives The Bottom Line

Mark Arnold
6 Ways Employee Experience Drives The Bottom Line

Employee Experience—sometimes referred to as EX—is anything but a soft, abstract concept; in fact, employee experience drives the bottom line in several ways. We're going to examine a few right now. Think along, because I'd love to hear from you in the comments at the end.

Really quickly before we get into these, it may be beneficial to point out that while the terms employee engagement and employee experience are certainly interrelated, they're not synonymous.


For example, if we wanted to better engage our teams, we'd want to do more around things like coaching, learning and development, and helping them better navigate change. Those are all examples of things we'd do to engage our teams, and there are a host of other things that would fall under that umbrella.

Those things would certainly affect Employee Experience. We'd want to get as detailed and passionate as some of us may about CX. It's a holistic picture—a holistic journey—describing how people feel during their entire time interacting and working with an organization.

Now you can likely see how an organization's engagement efforts affect Employee Experience overall, but it's only part of the picture.

While an "engaged employee" is always a good thing, and while it may be evidence that at least that employee is having at least some positive experiences; it's important to understand that it's not necessarily conclusive evidence of a well-put-together, holistic Employee Experience strategy.

[bctt tweet="While an engaged employee is always a good thing, it's important to understand that it's not necessarily conclusive evidence of a holistic Employee Experience strategy. #employeeexperience #leadership #futureofwork #creditunion" username="MattMonge"]

That's something we at OTM can help with. More on that is coming soon. If you want to be on the short list of people with early access to that package, shoot me an email at matt [@] markarnold [dot] com or reach out via social media channels (@MattMonge).

Now let's take a look at some of these growth drivers. Because who doesn't want to accelerate their growth?


A huge chunk of a recent study's participants indicated that an application that (1) wasn't mobile-friendly, (2) was difficult or confusing to complete and submit, or (3) took too long to complete, would result in them giving up before hitting that all-important "SUBMIT" button.

Now before you're tempted to write that off as someone "not wanting something badly enough," think about from the user's standpoint. Or better yet, how about a quick example from our standpoint?

When we're trying to do something online, we (we being most of us in society today, generally speaking) have a low tolerance for websites and apps that don't just, well, work, right?

There are other places we can get pretty much anything we're looking for, so if a website is acting wonky on us, we're pretty quick to click out of it and move on to something that makes it easier, no?

[bctt tweet="Applicant experience is part of Employee Experience. Don't forget that. #EmployeeExperience #companyculture #creditunion #HR #cuinsight" username="MattMonge"]


Now think about it again from a potential employee's perspective.

If one of their first interactions with your organization is that the site is slow, or the process is convoluted, or they're trying to do it on their phone and they're being forced to use what's basically still a desktop version of the site—all of those things communicate something about the organization, whether intentional or not.

That sort of Applicant or Employee Experience is almost certainly costing you talent, which over time, costs you money. It costs you both in ongoing and prolonged recruitment costs, as well as opportunity costs.

At OTMS, we're about to release a brand new tool to help organizations assess not only their recruitment process, but their entire employee experience. But more on that later. I don't want to spoil anything.


In her piece for Forbes, The Un-Ignorable Link Between Employee Experience and Customer Experience, Blake Morgan cites a study pointing out that there are one and a half times more engaged team members at organizations with higher levels of consumer experience.

She goes on to quote J.W. Marriott's famous words: "Take care of associates, and they'll take care of your customers."

graphic with picture of j. w. marriott and quote about employee experience drives bottom line

in his recent article for industry publication CUInsight titled Maintaining a Positive Employee Experience in Tough Times, my teammate Mark Arnold says it this way:

Your employees, while still expected to deliver high levels of member service and experience, are also human beings and dealing with the same ongoing pressures as the rest of society. It’s a political year. Some regions of the country have dealt with ongoing natural disasters (hurricanes, wildfires, etc.). Civil tumult and economic uncertainty hang over many heads. And, of course, there is the ongoing pandemic. In fact, an increasing number of studies identify “pandemic fatigue” as a very real and impactful element in the lives of Americans.

[bctt tweet="Your employees, while still expected to deliver high levels of service & experience, are also human beings dealing with the same ongoing pressures as the rest of society. - @jmarkarnold #EmployeeExperience #creditunions @cuinsight" username="MattMonge"]


Turnover is a multi-faceted and complex thing, but it's also an area in which every organization can improve. Work Institute's 2020 Retention Report showed us yet another year wherein approximately three out of four employee separations were what are categorized as preventable by the organization.

And get this—in that same report, of voluntary separations, more than a third (37.9%) left within the first year.

Quick aside: Things like that are part of the reason my teammates and I are excited about an upcoming product and service line launch dealing with Employee Experience. But don't tell anyone. It's a secret. And it's going to be awesome.

Organizations with poor employee experience not only experience higher turnover (estimates vary, but this research shows it at 41%), but also higher costs associated with that turnover.


In different research, Professors Andrew Oswald, Dr. Eugenio Proto, and Dr. Daniel Sgroi—all from the Department of Economics at the University of Warwick—led a study for the Journal of Labor Economics within which four different experiments demonstrated how happiness at work was a causal force in employees being more productive.

And they're not alone, of course.

We're all familiar with Zappos' Tony Hsieh and his Delivering Happiness.

I hope you're just as familiar with Shawn Achor's The Happiness Advantage.


In a Harvard Business Review cover story, he discussed how happiness—yes, happiness—can and does produce higher profits for organizations.

And speaking of the link between happiness and organizational performance...


One of the many Gallup studies—this one the employee engagement meta-analysis—tells us that organizations with highly engaged people outperform other companies by 147%.

A 2017 Temkin Group benchmarking study showed similar results. More than four out of five employees (82%) at high-performing companies were highly engaged as a result of a positive employee experience.

That same Temkin Group study, by the way, revealed that less than half of employees at organizations with low consumer experience ratings were highly engaged in their jobs.

Go figure.

When people are living and working every day within a culture that engages them, that experience is far more likely to facilitate higher-performing human beings over time because they're invested in and committed to what they're doing.


There's a reason I'm dumping so much research in your digital lap. (And fair warning: there's more forthcoming)

I'd like to think I'm a bit of a realist in that I understand as human beings, each of our minds works differently (and thank goodness for that).

That being the case, for some, pointing out the logic of investing in employee experience will work. For others, appealing to their sense of doing what is right and good to their fellow human beings is what will most resonate. For others still, it's data and research that speaks loudest.

I'm a bit of an oddball in that I regularly lean on all three. I would appeal to the moral imperative argument (and I often do) even if there weren't mountains of research to back up this position. And there are mountains of research. You should see my study. (Or maybe you shouldn't—yikes).


Now check out this fascinating tidbit of research from MIT Sloan.

employee experience ex predicts business performance

Did you catch that? Twice the percentage of revenue from new products and services.

Think about that for a second. That's not status quo success. That's success whilst taking risks and innovating.

And then, on top of that, those organizations experienced 25% greater profitability!

Another study, this one by the Corporate Leadership Council, showed that organizations with engaged teams grew their profits by as much as three times what their competitors did.

There's also a big barrel of meta-analysis from Jacob Morgan, published by Wiley, that I'll give you a snapshot of here. It's from his book The Employee Experience Advantage that, when I first read it, I swear I thought parts of it had been taken from the scrawled notes inside one of my many notebooks.

That, or someone had performed one of those cool, but rather painful looking mind meld things that Spock does when he wants to get at the information in someone's head.

It's always great to see someone else passionate about the same things you are, but it's on another level when they conceptualize them in similar ways as well. Morgan does that, and he does it well. My thoughts every time I read Morgan's stuff, in the words of the aforementioned Mr. Spock:


graph showing employee experience improving employee performance and organizational performance

Revenue? Twice as high. Revenue per employee? More than twice as much. Profit per employee? Four times as much. Average profit? More than four times higher.

The IBM Smarter Workforce Institute concluded that organizations saw increased performance too, and that that positive employee experience drives the bottom line. When employees had increasingly positive experiences in the areas of belonging, purpose, achievement, happiness, and vigor—what they called the Employee Experience Index, or EXI—the effect was unmistakable.

In that same Smarter Workforce Institute study, increasing the EXI score by a margin of .25 corresponds to 0.86 percentage-point improvement in ROA and a 1.81 percentage-point improvement in ROS (return on sales).

graphic showing that better employee experience leads to better ROA (Return On Assets) and better ROS (Return On Sales)

Now, if you're like me and need that (above) brought from the abstract into reality, here's an example provided in the same IBM Smarter Workforce Institute Study:

Imagine if Company ABC’s sales revenue was $600 million and its ROS was 15 percent in 2017. At the same time, Company ABC had an average EXI score of 3.50, measured on a five-point Likert agreement scale via an employee survey. According to our analyses, if Company ABC could increase its EXI score by 0.25 (from 3.50 to 3.75), its ROS could increase from 15 percent to 16.81 percent. Assuming the same sales in 2018, the associated increase in operating income would be $11 million.

Yes, you read that correctly...

Well, almost. 11 million. 11 million dollars.

And some of you thought all this Employee Experience and culture stuff was just touchy-feely nonsense.

Employee experience drives bottom line action steps


Now that you see what Employee Experience can do in general terms, it's time to think about your organization. Here are some questions to get you started.

You'd be amazed at the level of amazing, unique, service teams can provide to not only members and customers, but also to each other, when you begin answering questions like these with specificity. (You'll do that within the scope of On The Mark Strategies' soon-to-be-unveiled-but-still-semi-Top-Secret Employee Experience Package.)

Nail down your Employee Experience Strategy

What does your Employee Experience Strategy look like? Can you articulate it clearly?

Define the stages of your Employee Experience Journey, and what success looks like in each one

Have you defined what success looks like at each stage in the Employee Experience Journey?

Become a truly empathetic organization, and deploy that empathy when viewing both the consumer and employee journeys

What are folks on your team Thinking, Feeling, and Doing at each stage in that journey? What do you want them to be Thinking, Feeling, and Doing? Get granular here.

Understand the holistic nature of Employee Experience, and determine points of intersection with Member/Customer Experience

Do you know how your Employee Experience intersects and interrelates with your Member/Customer Experience?

Weave Employee Experience together with your culture; allow them to inform one another

What are your team members' needs, expectations, and preferences related to their role, their leaders, the tools they have, and the organization as a whole? Are you talking with your team? As in, are you having real, human conversations with them? Culture is the great amplifier of every other organizational strength, which is why we're so big on it here at On The Mark Strategies.

There's a lot more we could talk about related to Employee Experience, of course.

We know Employee Experience drives the bottom line, but that's not all there is to it. One part of our aforementioned, not-yet-but-soon-to-be-released-and-so-super-duper-top-secret-that-I-may-have-to-kill-you-all-now-that-I've-told-you-about-it Employee Experience Package is an Employee Experience Assessment.

We use that assessment and provide credit union member experience training to help systematically guide leaders and organizations through the steps it takes to build a holistic Employee Experience strategy. We then weave that together with not only their Member/Customer Experience, but also their culture and brand.

Feel free to email me directly or reach out via any of my social channels (@MattMonge) to talk shop!

Mark Arnold
Founder and CEO