Low EX companies were 6 percentage points below the index for return on equity, while strong EX companies performed 3 percentage points above the benchmark. (Photo: Shutterstock)
If you treat your workers well, your bottom line will likely bump, according to Willis Towers Watson's report, "Breakthrough research: Identifying the factors that make a high-performance employee experience."
The research found that companies demonstrating a strong employee experience (EX) consistently beat their sector on average by a clear margin of 2 to 4 percentage points across key performance metrics, including return on assets and equity, one-year change in profitability, and three-year changes in revenue and profitability. In contrast, companies delivering less effective EX consistently underperformed their peers by 1 to 10 percentage points.
"The best companies, in their employees' eyes, excel by inspiring connection to mission and purpose, providing growth opportunity to fuel ambitions, engendering deep trust in senior leadership effectiveness and creating a sense of drive through strong customer focus, ongoing change management and agility in meeting marketplace demands," the authors write. "The common characteristic of these factors is that they are a function of the mindset within the company."
Broken down by performance metric: low EX companies were 6 percentage points below the index for return on equity, while strong EX companies performed 3 percentage points above the benchmark. For a one-year change in gross profit margin, low EX companies were 10 percentage points below the index, while strong EX companies performed 3 percentage points above the index. For three-year revenue growth, low EX companies were 1 percentage point below the index, while strong EX companies performed 4 percentage points above the index.
What are the practical implications, for organizations to achieve success? Willis Towers Watson lists seven: EX now has a definition; EX is a business issue and needs to be managed; EX should be THE guiding construct for human capital; EX can be assessed; workplace essentials alone will not drive change; free the spirit of employees; and transforming the organizational mindset will bring the biggest gains.
"The most profound change though comes through a transformation of mindset — inspiring your organization around your purpose, driving agility and innovation to be ahead of the market, helping your people achieve their potential and building a trusting leadership environment," the authors write. "The fact that so few organizations do this well suggests it is hard. But it is the ultimate magic key to unlocking high performance."
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Katie Kuehner-Hebert
Katie Kuehner-Hebert is a freelance writer based in Running Springs, Calif. She has more than three decades of journalism experience, with particular expertise in employee benefits and other human resource topics.
