It’s official: Great employee experiences (still) result in superior financial performance

By Jill Havely, Angela Paul, Lindsay Stortz and Tiffany Shortridge, Ph.D. | February 26, 2024

Source: WTWCO

In a ground-breaking study first released in 2019, WTW identified the key drivers that shape and deliver differentiated employee experiences that lead to consistent financial success. Introducing the High Performance Employee Experience (HPEX) framework, this trailblazing research became the first of its kind to unveil the essential components for organizations to cultivate a dynamic employee experience, fostering both heightened engagement and unparalleled financial performance.

Global transformation has inspired companies to reinvent workplace practices, fostering a shift in the employee experience. We recently took a fresh look at the data that informs global High Performance Employee Experience to see how the factors changed, or remained the same, between 2019 and 2023. What did we learn?

• HPEX remains a strategic compass, guiding leaders to prioritize key components of the employee experience by examining the four fundamental dimensions: purpose, people, work, and total rewards.
• High-performance companies are most distinguished by their ability to inspire employees around their purpose, build high levels of trust in their leadership, drive a competitive position in the market through intense customer focus, agility and innovation, and recognize employees through tailored, differentiated, transparent and equitable pay and benefits.
• There has been a fundamental shift in the total rewards value proposition. Organizations who drive higher performance and engagement focus on the wellbeing, growth and recognition of their people.

The power of wellbeing, growth, and recognition in total rewards

Let’s look a little closer at the influence of total rewards on the overall value proposition and what makes a high-performance employee experience.

Wellbeing is foundational

The human impact of the last few years has underscored the significance of holistic wellbeing as a fundamental aspect of the employee experience. Organizations that prioritize wellbeing as an integral part of their culture and approach have consistently outperformed the average organization. By offering curated programs to improve physical, financial, emotional, and social wellbeing, organizations can enhance their employee value proposition and foster a culture of wellbeing that drives exceptional performance.

Wellbeing, has become a must-have rather than a nice-to-have. The leading indicator of wellbeing is based on a strong employee belief that their leaders care about their, and their family’s wellbeing.

While wellbeing did not figure as a significant differentiator in 2019, it now appears as an essential element. High-performance companies who prioritize employee wellbeing making it an integral part of their culture, outperform the average organization by more than five points.

By re-prioritizing wellbeing as an essential element of employee experience, organizations enable their employees to thrive both inside and outside of work – ultimately, for collective benefit.

Growth through skill development and clarity of career opportunity

The past few years have presented organizations with unforeseen, and often uncontrollable, challenges, leading to critical talent skills gaps and layoffs, and a heightened sense of uncertainty among employees. High-performance organizations have responded by revisiting their talent strategy. They're focusing on recruiting talent for their future needs, providing clarity on career path options and possibilities, reskilling or upskilling current talent to deliver on the evolving business needs and clearly articulating performance criteria and promoting those who deliver results.

When it comes to growth, the gap between high-performance organizations and the global average continues to widen with an eight-point differential.

High-performance organizations have responded by revisiting their talent strategy, focusing on recruiting the talent for their future needs.

Employees need purposeful career growth. They need clarity on the different pathways to progression, meaningful support regardless of their chosen path, and to trust in the interplay between their performance and recognition. And ultimately, that their career opportunities and recognition are fair and equitable.

Employees in high-performance organizations have more visibility to the opportunities available to them, are provided with relevant training to build skills for the future and receive support from leaders to help them achieve their potential – creating differentiated employee experiences.

Recognizing employees with personalized, transparent and equitable pay and benefits

Today, with new legislation on pay equity and transparency, uncertain economic environments and further ongoing global disruption, employees value pay and benefits offerings as never before. Leaders in high-performance organizations understand this. They have been modernizing programs to focus on fair pay and recognition practices, flexible and inclusive health and benefits programs that are affordable and accessible and retirement and savings programs that improve employees’ financial resilience while ensuring equity across employee segments. Without doing so, they face the risk of losing valued talent and difficulty attracting the talent needed to progress the business forward.

High-performance organizations are prioritizing pay equity that recognizes individuals based on contribution and merit. They understand that to remain competitive, they need to provide recognition that makes employees feel seen and meets their individual and loved ones’ needs. They focus on driving higher levels of awareness and education to increase transparency, understanding and appreciation.

High-performance organizations are 14% more likely to agree that the benefit program offered meets their needs and is able to continually meet their needs even as they evolve.

In early 2023, the gap of employee perception that they are paid fairly for the work they do widened between the Global High-Performance Organizations and the Global Averages. However, throughout 2023, as more organizations invested in education for managers and employees on how pay is determined, the percentage of employees who trust in the organization increased by 10% and perceptions of pay equity increased by 11%.

Great employee experience: The proof is in the numbers

Global high-performing organizations achieved nearly three times the revenue growth, eleven times the profit margin, and two times the return on equity compared to global averages. This shows that a better employee experience is associated with better financial performance. WTW’s Global High Performance group members whose financials were available to the public, outperformed the WTW global average group by these margins in 2023.

High-performing organizations continue to differentiate their employee experience from the average company and see superior financial performance as a result. Embracing the power of High-Performance Employee Experience in today's ever-changing world, where disruption, workforce transformation, and labor market shifts are the norm, leading organizations understand the importance of accelerating change by prioritizing the employee experience. It is the key differentiator between soaring success, average financial performance, or even failure. Through an inspiring purpose, trust in leaders, and motivation to perform, organizations can unlock the full potential of their workforce.

Achieve your organization's potential: Four ways to drive high-performance employee experiences and financial success

Transform your organization into a global high-performer, with elevated and differentiated financial performance driven by your people.

1. Evaluate your Employee Experience: Gain valuable insights into your current performance against high-performing norms through turn-key surveys. Uncover areas of strength and identify opportunities for improvement.
2. Review and modernize your total rewards program and policies: Assess the alignment of your current total rewards with employee preferences and your value proposition. Ensure you’re delivering programs that provide equitable and fair rewards and career practices, offer flexible and inclusive benefits and support holistic wellbeing programs that meet the needs of your diverse workforce (and their families).
3. Improve your employee experience and demonstrate the value of your total rewards: Connect and engage with your employees across all the touchpoints that matter most by creating a digital - always on - experience that delivers personalized information so employees can make informed decisions and maximize the value of their total rewards.
4. Assess your company’s readiness for change and accelerate change: Leverage the power of tools and change accelerator workshops. These insights and working sessions utilize data from our extensive employee and employer benchmarks to help you prioritize and strategize effectively.

Achieving a high-performance employee experience is attainable for your organization.

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