Looks at return on equity, gross profit margin, revenue growth
Businesses with strong employee experience (EX) outperform sector peers by two to four percentage points (pp) in a number of key performance metrics, according to a study.
Conducted by Willis Towers Watson, the study shows that companies with strong EX performed three pp above the sector average when it comes to return on equity. They also recorded three pp above the benchmark in a one-year change in gross profit margin and four pp above the norm in three-year revenue growth.
Companies with poor EX, meanwhile, were six pp below the return on equity index, 10 pp below the one-year change in gross profit margin index and one pp below the three-year revenue growth index.
“This confirmation that EX sits at the heart of delivering exceptional customer experience and superior financial performance has profound implications for human capital strategy,” says Stephen Young, global practice leader on employee insights at Willis Towers Watson.
The study looked into the employees’ local conditions, including training opportunities, immediate supervision and teamwork. It also factored in aspects of organizational functioning, such as senior leadership effectiveness, customer focus and company competitiveness.
“The highest-performing companies have a very strong focus on how their employees feel about the organization, from inspired by its purpose and trust in leadership, to confident in achieving career aspirations. These factors set organizations apart,” says Patrick Kulesa, senior research director at Willis Towers Watson Research and Innovation Center.
The transformation of the leadership mindset is the key to a company's high performance, says Young.
“[It’s about] 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 culture of leadership trust. The fact that so few organizations do this well suggests it’s hard. But it’s the ultimate magic key to unlocking high performance.”