A large-scale study by a research team at PwC provides concrete evidence that investing in Employee Experience really pays off. Among the key findings:
- A strong Employee Experience leads to lower absenteeism, reduced employee turnover, and increased productivity. These results directly impact financial performance.
- There are 11 key elements (drivers) that positively influence Employee Experience. These drivers vary in impact—not all have the same effect on absenteeism, turnover, and productivity.
- Of these 11 drivers, investing in well-being, development opportunities, and training yields the highest return, equivalent to 4.9% of total revenue.
Investing across all 11 drivers can yield savings amounting to 12.6% of total revenue.
What is Employee Experience?
It refers to the sum of all perceptions an employee has throughout their interactions with the workplace. It encompasses the entire employee journey from recruitment to exit.
The 11 key drivers
Based on extensive research, PwC’s research team identified the drivers with the greatest impact on absenteeism, turnover, and productivity. These are measured based on employees’ subjective experiences:
- Well-being: A sense of happiness rooted in feeling safe and supported.
- Stress: The experience of work-related stress.
- Schedule Satisfaction: The ability to influence when and where one works.
- Work Environment: The experience of both physical and psychological work conditions.
- External CSR: The company’s actions to protect or promote social welfare beyond its direct business interests.
- Training: Conscious acquisition and development of technical and personal skills.
- Leadership: Perceived quality of leadership.
- Diversity: Policies and practices that support equal rights and opportunities.
- Development Opportunities: Career growth and skill-building possibilities.
- Compensation: Fixed salary, variable bonuses, and other financial perks.
- Autonomy: The feeling of independence, flexibility, discretion, and trust/control
The business impact of the drivers
The chart below illustrates the impact each driver has on reducing absenteeism, lowering turnover, and increasing productivity.
Well-being stands out as the most impactful driver. Improving well-being from average to high delivers a benefit more than 12% greater than similar improvements in any other driver.
At the bottom of the chart is Schedule Satisfaction. It’s worth noting that the data was collected before the COVID-19 pandemic, so this driver may have a significantly different impact today and could rank higher in a post-COVID-19 context.
Map the current state and define interventions
How can organizations understand their current position across these drivers and determine what actions to take?
To calculate the return on investment for various drivers, it’s essential to establish a baseline, set clear goals, and define the initiatives needed to reach them. From there, organizations can estimate intervention costs and compare them to the financial gains.
PwC recommends beginning with baseline measurements to determine current levels across the drivers, then designing actions in close collaboration between leaders and employees. It’s important to remember that what works in one organization may not have the same effect in another.
Create baseline surveys with GAIS
With the GAIS platform, you can measure baseline levels for several of the PwC-identified drivers such as well-being, leadership, flexibility, mastery, and involvement. GAIS makes it easy to pinpoint which drivers matter most to employees and which need improvement. It also offers tools and guidance for how to improve each driver. And finally, GAIS makes it simple to track progress over time and evaluate whether your initiatives are delivering results.
About the report
This blog post is based on PwC’s 2022 report: The Benefits of Investing in People. The study was conducted by a research team at PwC Netherlands, who identified the 11 drivers based on their recurrence in academic literature and relevance to most businesses. The team then drew from a range of international academic studies to determine how each driver relates to absenteeism, turnover, and productivity. These three metrics were chosen because they have a well-documented impact on financial performance.
Read more about the report and methodology here.
