How An Employee Experience Management Strategy Can Help with Retention: Theory and Practice

Turnover is arguably the costliest issue facing organizations around the world. In the U.S. alone, recent figures from the Bureau of Labor Statistics indicate that businesses are losing approximately one trillion dollars each year due to voluntary turnover. Combined with an estimate from PwC, an organization can be expected to spend 90-200% of an employee’s annual salary when totaling the costs of replacement. That’s a lot of dough.

Any organization that cares about its bottom line must address the issue of voluntary turnover, as it hurts more than just the cheque book. When an organization loses top talent, it experiences decreases in productivity, collaboration, and morale, not to mention institutional knowledge. If an organization loses enough of its best talent, it can expect an overall decline in the culture as remaining employees ask, “Why are all my colleagues leaving?”

Detecting Turnover Sources

It’s important for businesses in all industries to employ measures to prevent or reduce turnover. An organization-wide approach to recognizing the factors that increase the likelihood of premature employee exits is an important step for sustainability and growth. This is where an Employee Experience Management (EXM) strategy – that includes stepwise feedback, real-time continuous listening, and better decision support – can play a critical role to further understand factors leading to employee attrition within the organization.

What is Employee Experience Management?

Employee Experience Management (EXM) is a comprehensive and fully embedded approach that measures and influences the employee experience along the different career/employment stages with an organization – from hire to retire.

EXM is made up of multiple touchpoints, each of which can impact an employee’s decision to stay with an employer. It is understandable then, that an optimized employee experience leads to a host of positive outcomes.

This is something that HR leaders understand intuitively. According to Shelli Nelson, Managing Director, Talent Acquisition at Mason Industries, “HR Leaders understand that the war on talent is directly linked to [employee experience]. Powerful measures are needed to ensure that resources are being used effectively to keep employees engaged, productive and supported at the highest levels.”

Research from MIT indicates that enterprises with top-quartile employee experience achieve twice the innovation, double the customer satisfaction, and attain 25% higher profits than enterprises with bottom-quartile employee experience. The result of a strong employee experience and better employee recognition is higher job satisfaction, organizational commitment, and improved employee engagement.

Siloed Evaluations vs. Integrated Stepwise Feedback Along the Employee Journey

Most organizations regularly evaluate key points along the employee journey. These include onboarding, engagement, training effectiveness, competencies, performance, and even exiting. The Explorance approach to Employee Experience Management takes this a step further. It’s one thing to collect all this important data, it’s something else entirely to bridge this data collected along the different milestones of the employee journey to create a single data set.

Analyzing results separately for engagement surveys, training evaluations, or performance reviews is a challenging task, while assessing a true link between these data points is notably harder. The reason these various siloed tools exist is that organizations receive a lot of valuable information from them, especially if they are employed in a strategic and repeatable manner. Why then should an organization choose to complicate things and create more work for themselves?

In terms of understanding employee retention, the answer is simple—the drivers of turnover can be uncovered by accessing data the organization is already collecting. When an enterprise connects the dots from the employee experience data, patterns begin to emerge. Below is an example of a three-phase process that can be used to build employee retention models.

1. Phase I – Data unification

   The first phase here is to consolidate this disparate data in one central repository. This makes the next two phases of data visualization and analytics easier to perform as one can pick and choose what data to mine from the repository. Sometimes it makes sense to pull all of the data for a large, all-inclusive retention analysis, while other times it is more appropriate to pull specific portions of data for deep dives on how certain key areas of interest can influence retention.

2. Phase II – Pattern identification

   This phase is to identify the patterns relevant to turnover by utilizing descriptive statistics and data visualization. Segmenting your employees into appropriate buckets for analysis (e.g., business unit, job role, tenure, performance ratings, employee demographics) is a recommended approach. When Phase II is executed correctly, you gain insight on how data interacts with respect to retention and which patterns actually exist.

3. Phase III – Retention model formation

   This final phase is more sophisticated as it uncovers the drivers of turnover which will serve to build the retention model. It does so by using statistical analyses such as factor analysis, regression (linear and binary), and survival analysis. These statistical techniques can reveal which levers to pull to have the greatest impact on turnover.

   This rigorous approach helps to validate personal instinct as well as the results gleaned from descriptive statistics in Phase II. With high-quality data and experienced experts at your organization’s disposal, a model of retention becomes a realistic objective.

   Building retention models is a mix of art and science, but when constructed appropriately, the results are high-utility and high-value.

A Real-World Example

For better illustration, let’s consider a project I recently completed for a client. This is a real-world example of how linking data from different employee experience touchpoints can reveal surprising and actionable results. 

Employees working for this client generally operate under tight deadlines and are expected to meet challenging goals on a regular basis. The client hypothesized that engagement questions surrounding work-life balance, workload, and support from management would be the main drivers of turnover. After running the analysis, the hypothesis was proven to be mostly false.

Instead, organizational support for innovation and clearly defined project expectations were two of the greatest drivers of turnover.

We responded by building a model for the client to quantify how improvements in support for innovation, defined project expectations, or a combination of both would influence the likelihood that an employee leaves or stays in the company. Armed with this information, the client can now strategically address the retention issues by focusing on improving areas of the business that are empirically linked to turnover.

Organizations know who and what they are, leaders recognize their employees, and HR understands their cultural environment. Nonetheless, the above-mentioned example reveals a simple truth that translates broadly: sometimes the hypotheses of those who understand the organization best are (fully or partially) incorrect. Due to the high operational costs associated with turnover, when it comes to employee retention, we cannot afford to be wrong—even slightly.

Consider Employee Experience Management to uncover the truth about what is, or what is not, influencing employees to leave your organization.

In addition, consider whether you can afford to sit and be idle while your competitors implement People Analytics initiatives.

Mary Moody, Executive Coach at Life-Reimagined makes the case about the value of Employee Experience Management. “[It] give employers the tools to harvest and evaluate data they already have in a very focused way. Organizations embracing this capability will have a competitive advantage over their peers who haven’t in the war for talent.”

About John Heffernon:

John is an experienced employee lifecycle researcher and consultant. Over the course of his career, he has executed a variety of employee and organizational research projects including employee engagement studies, 360 assessments, learning measurement, learning analytics, and organizational culture assessments. In addition, John is a talented statistician who has validated survey instruments, conducted impact studies that blend learning analytic data with actual business data, and designed and evaluated learning measurement models to support Experience Management frameworks. This is done to ensure maximal impact and value for the organizations that depend on them.

John graduated from the University of Wisconsin, Madison with degrees in Psychology and Economics. He continued his education at Minnesota State University, Mankato, where he graduated with an M.A. in Industrial/Organizational Psychology. Before working with Explorance, John worked for Engine Insights as an Employee Research Consultant and the Organizational Effectiveness Research Group as an Organizational Development Consultant.

Learn how an Experience Management (XM) strategy can greatly facilitate employee retention