Other parts of this series:
The employee/employer dynamic has become more complicated in the 21st century—particularly in financial services. But research shows investment in the employee experience brings the competitive advantage. Here’s why.
We are living and working at a time when three trends have put the need for improved employee experience (EX) at the forefront in financial services:
- As the wave of retiring baby boomers reaches its peak, technological innovation is accelerating—intensifying cross-industry competition for rare digital skills.
- Banks and insurers are not in top form when competing for talent. The financial services (FS) industry is seldom the preferred destination for recent graduates and younger generations.
- The FS workplace is in a state of flux. A traditionally hierarchical and siloed industry is finding itself trying to adapt and thrive in a digital world that has an unprecedented five generations in the workplace.
You might ask, “What does employee experience have to do with all of this?” My answer to that is everything.
Employee experience: indulgence or investment?
Think about it this way: your company invests a fair amount in the customer experience, so why wouldn’t it invest in improving the same for employees? Research shows that companies that provide a great EX outperform the S&P 500 by 122 percent. And those with highly engaged workforces are 21 percent more profitable than their peers. Why? Because an engaged workforce is vital to the foundation for agile change.
As an example, Southwest Airlines founder Herb Kelleher was often asked who comes first: your shareholders, employees, or customers? His answer was unexpected.
“Employees come first, and if employees are treated right, they treat the outside world right, the outside world uses the company’s product again, and that makes shareholders happy. That really is the way it works.”
This was considered a bit controversial in the 70s and 80s. But as an early champion of EX, Kelleher instinctively knew that a supportive employee experience can—and his case, did and still does—contribute powerfully to fiscal performance.
Employees are waiting for FS employers to catch up to their consumer experience.
In the case of financial services, investment in digital is a strategic imperative to retain and recruit talent. With 71 percent of company leaders stating their workforce is more digitally savvy than their employer, it’s apparent that employees want their work experience to mirror their consumer experience: quick, convenient, mobile, and tailored. Seven out of 10 employees of highly automated companies say automation improves job satisfaction, increases time for creativity and creates opportunities for advancement. Key point: Employees want to work with the latest technologies because they feel it will benefit their work.
Engaged employees are happy employees.
Employee engagement isn’t just about acknowledging a milestone or life event, or holding a quarterly team event. It’s also about the having the right type of work. Leaders in FS are creating digital playbooks and including employees in the process. Some ways they are doing this include:
- Design thinking
- Investment in artificial intelligence (AI)
- Smart workspaces
- Employee portals
Using design thinking can give an outcome-based (versus process-based) perspective. In my experience, this allows everyone’s creativity to soar whilst designing the best solution for all. Engaging employees in the development of their work and environment is a key link to building trust and striking down fear that sneaks in at times of industry disruption.
Ahead of the curve with this is consumer finance company Synchrony, who set up employee “innovation stations” in 2014. Working on cutting-edge digital applications like AI or futuristic call centers, teams have delivered on ideas that have fueled growth and showed improvement in talent attraction and retention.
The future is all about employee experience – it is the differentiator, the ‘x’ factor.
There are many benefits to FS companies that tap digital to improve EX:
- Improved engagement and productivity
- Enhanced financial performance
- Competitive advantage
I think the biggest takeaway from the last decade for FS companies is that employees are often also your consumers or future consumers. (I would also say the same of contractors, alumni and candidates.) Which is partly why happy employees lead to happy (read: paying) customers. And if you’re a publicly traded company, that makes shareholders happy. So really, Herb Kelleher’s way of thinking wasn’t so controversial after all.
In my next post, I’ll explore the layers of the employee experience for financial services and HR’s role as a collaborative partner in change. In the meantime, click here to read more on “The Employee Experience as a Competitive Advantage” or feel free to connect with me here.