For many companies, human resources has become an outdated term. Instead they have now shifted towards 'employee experience', which aims to focus on the bigger picture of how professionals feel in their role.
This brings together elements of workplace, HR, and management practices, to get a better and organic understanding of the overall experience people have at a company, boosting retention, loyalty and advocacy from employees.
But why the change, and is it just a new term for something that many companies have been doing for years?
Coined by John R. Commons and dating back to the late 1890s, the term ‘human resources’ became common in the 1910s and 1920s and encouraged businesses to view the people working for them as "capital assets". This and the idea that you should invest in your workforce as much as you did any machinery was undoubtedly a radical view for companies at the turn of the 20th century, but now feels outdated.
Why do businesses need to change now?
There are a number of reasons why, in 2018, companies need to be embracing employee experience ahead of traditional HR notions.
The digital revolution means employers no longer have to rely on their own intuition or 'honest' feedback from their workforce to measure how happy or satisfied they are in their role. Now there's a range of software, apps and integrated tools that can be used to get data-backed support on how employees feel about their job.
Over the past few years there's been a significant shift in who the people are in a workforce. If yours isn't already, it won't be long until it's dominated by millennials and they have a very different attitude to careers than previous generations.
Although they are less than a third of the population, by 2025 millennials will make up three-quarters of the workforce. This change in demographic brings with it a shift in the priorities for employee experience. Millennials want a job that is meaningful to them, rather than one that pays the best, with an employer who is supportive and gives them autonomy and flexibility.
This means a positive and mutually respectful relationship has become the main priority for employees.
What are the challenges ahead?
Deloitte's Global Human Capital Trends research highlighted a number of challenges that are currently making it difficult for companies to fully embrace employee experience for their workforce, including:
- Many companies haven't yet set this all-round experience as a priority for HR professionals and instead rely on annual surveys. This means that there is a lack of support and leadership when it comes to implementing employee experience strategies.
- HR departments still suffer from a degree of segmentation that makes them acquire the resources needed to address the various priorities, which range from management practices to workplace benefits and, often, the work culture itself.
- There's still a hesitation from businesses to embrace an all-round check on employee experience, which relies on consistently measuring and providing support to HR teams and line managers.
- Companies remain focused on “point-in-time engagement” and have not yet pulled together the disciplines of performance management, goal setting, diversity, inclusion, wellness, workplace design, and leadership into an integrated framework.
What's the solution?
According to McKinsey, employee experience is "essential for companies to compete effectively".
It believes the best models have companies working alongside their employees to deliver:
"personalized, authentic experiences that ignite passion and tap into purpose to strengthen individual, team, and company performance"
To achieve this, businesses need to invest time and money into understanding their employees as well - if not better - than they do their consumers and identify solutions to any pain points that arise.