How Investing in Employee Experience Brings a Positive Return

BY Katie Chambers | June 04, 2024

With all the employee-experience software options to choose from, the idea of choosing one to incorporate into your HR structure can be daunting. And in times of tightening budgets, it can be challenging to make the case for the spending. But according to a recent study by employee experience platform WorkTango, organizations that invest in employee-experience software see a 2-to-3 times return on the money they put into it.

The study surveyed 1,077 North American HR leaders, 90% of whom said that knowing which employees are engaged is especially important in an uncertain economic climate. An interested and enthused workforce is a loyal, steady workforce and employee experience (EX) software can help HR managers keep a finger on the pulse of workers’ attitudes, needs, and desires.

As WorkTango states in its recent report, “EX investments represent a low risk and high potential reward when it comes to creating an employee experience that connects your workforce across hybrid environments, supports the daily efforts of individual employees, and enables every team member to perform at their highest level.” Ninety-three percent of those surveyed achieved a positive or neutral ROI from investing in EX software.

Finding the Right Software

Among the several types of EX software on the market, each has its own unique offering to complement your organization’s long- and short-term strategies and goals. Among those surveyed, 70% prioritized software that helped with performance management, 67% wanted employee recognition and rewards, and 56% needed support with employee listening and surveys.

Some employees respond better to certain interactions with organizational leadership than others. WorkTango recommends surveying team members to see what matters most to them, from public recognition to company swag, and then choosing software accordingly. Ideally, you should identify a solution provider that offers several capabilities within a single platform for maximum ROI.

Click above to view and download WorkTango's report

As you make your software selection, WorkTango suggests focusing on the three deciding factors listed as most important among those surveyed: reporting and analytics capabilities, ease of use, and cost. That said, researchers noticed that among the few companies that reported neutral or negative benefits reaped from employee experience software, all named cost as their top deciding factor. It’s important to invest in a quality product, and not just check a box while watching the budget.

The ROI on Employee Experience Investments

What do employers hope to achieve with their investment in employee experience technology? It’s not just about saving money or making the HR department more efficient, although those are certainly added benefits. The focus for many organizations is the return on individual people. The top areas of expected ROI among those surveyed were an increase in employee productivity or performance, an increase in employee retention, and an increase in customer satisfaction.

According to WorkTango’s report, it takes time, as well as employee adoption and utilization, to produce positive outcomes. You may not see results overnight, as the employee-experience technology implementation requires a gradual culture shift. Seventy percent of the HR leaders surveyed said that their executive team expects to hear about the impact of these investments within the first six months.

It’s important for HR to align on executive expectations for key updates and have a conversation about the timeframe for implementation and what is realistic and measurable. HR leaders should be prepared to report on three key areas: people ROI (employee engagement and regrettable turnover), company ROI (customer satisfaction and performance/productivity), and HR’s ROI (cost savings and team efficiency).

The real ROI results are clear: EX software is the smart, meaningful, and financially savvy choice. Out of the 1,077 organizations surveyed who invested in this technology:

  • 65% achieved higher employee productivity and performance 
  • 58% improved employee retention
  • 54% increased customer satisfaction
  • 33% saved on costs compared to their previous efforts
  • 32% saw a higher employee Net Promoter Score (eNPS), meaning employees are more likely to recommend the company
  • 31% reduced the total HR time spent administering employee-experience programs
  • 31% saw reduced absenteeism
  • 17% saw an increase in Glassdoor ratings
  • 16% saw an increase in company stock performance

Best Practices for Achieving ROI

A few trends popped up among those surveyed who had success with their employee-experience software. These organizations prioritized data-based measurement of the program’s impact over anecdotal evidence, setting specific goals and then measuring against those goals over time to demonstrate value.

They also aligned early with executive leadership on what success for EX investments should look like, whether that’s an increase in productivity, retention, customer satisfaction, referrals, positive brand awareness, or a combination of all those factors. And finally, these organizations encouraged and incentivized employee experience platform adoption.The more the platform is successfully used, the higher the ROI.

Frequent employee recognition and engagement was positively correlated to company performance, with those surveyed seeing an increase in quarterly revenue. WorkTango’s ROI report states that “supporting employees by investing in the employee experience leads to what we call the compound interest of a great team member: they stick around longer (retention), they produce at a higher level (performance), and as a bonus, they tell others about what a great company they work for.” By investing in the happiness of their employees, leaders are investing in the success, growth, and longevity of the organization.

Editor’s note: From Day One thanks our partner, WorkTango, for sponsoring this sponsor spotlight. Download WorkTango’s ROI report here.

Katie Chambers is a freelance writer and award-winning communications executive with a lifelong commitment to supporting artists and advocating for inclusion. Her work has been seen in HuffPost and several printed essay collections, among others, and she has appeared on CBS New York, Cheddar News, and iWomanTV.

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