The Link Between Employee Experience and Growth
In the relentless pursuit of growth, businesses often channel their efforts into customer experience, product innovation, and marketing strategies. Yet, behind the metrics and campaigns lies an often-underestimated driver of success: the employee experience. In today’s competitive landscape, organizations are beginning to recognise that investing in their workforce is not merely an ethical obligation—it’s a commercial imperative.
In recent years, the connection between employee experience and business success has moved from intuition to evidence, as research continues to shed light on the critical role employees play in driving organisational performance.
Rethinking Employee Experience: From Cost to Catalyst
For decades, employees—especially those in customer-facing roles—have been treated as a line item in the profit-and-loss statement, a cost to be managed. But this outdated perception is giving way to a deeper understanding of the value employees bring to the table.
A study cited in the Harvard Business Review provides compelling evidence of this shift. Researchers analysed data from a global retail brand and found that if an average store could improve its employee experience metrics from the bottom quartile to the top, it could achieve a more than 50% increase in revenue and nearly as much in profitability. These gains demonstrate that employee experience is not just a "nice to have" but a strategic lever with tangible financial outcomes.
Bridging the Gap Between Employee and Customer Experience
It’s no coincidence that organisations with excellent customer experience (CX) often excel in employee satisfaction. The two are intrinsically linked. Employees are the face of the brand, particularly in industries such as retail, financial services, and professional services. Their attitude, engagement, and expertise can create moments that delight—or disappoint—customers.
Consider a financial services firm where advisors routinely interact with high-net-worth clients. If those advisors feel undervalued or overworked, their demeanour will reflect this, leaving clients dissatisfied and disengaged. Conversely, advisors who are well-trained, supported, and motivated are more likely to exceed client expectations, fostering trust and loyalty.
The Measurable Impact of a Positive Employee Experience
The financial and operational benefits of enhancing employee experience are well-documented. Here are three specific ways organisations can directly link employee experience to growth:
Boosting Productivity: Engaged employees deliver more. According to studies, businesses with highly engaged workforces report a 17–20% increase in productivity. This is not limited to operational efficiency; engaged employees are also more creative, contributing to innovation—a key driver in tech and professional services sectors.
Enhancing Customer Loyalty: There is a clear correlation between employee engagement and customer satisfaction. Employees who are empowered and supported are more likely to go above and beyond for customers, creating the kind of positive experiences that drive retention. In retail, for example, a helpful associate can transform a casual browser into a loyal customer.
Improving Retention and Reducing Costs: Employee turnover is a silent killer of business growth. It disrupts teams, erodes morale, and results in significant financial costs. Research suggests that replacing an employee can cost up to twice their annual salary. A strong employee experience reduces turnover, helping organisations retain top talent and avoid the cycle of recruitment and training.
Integrating Employee Experience Into the Business Model
Despite the evidence, many businesses struggle to act on it. The problem often lies in the siloed nature of HR and financial data. The Harvard Business Review study found success by integrating these data streams, linking employee metrics such as tenure, skill level, and job satisfaction directly to financial outcomes like revenue and profit per employee-hour.
For organisations seeking to replicate these insights, the process starts with data. By aligning HR systems with business performance metrics, leaders can identify which aspects of the employee experience have the greatest impact on outcomes—and where investments will yield the highest ROI.
For example:
Employee Longevity: Long-tenured employees often bring deep expertise and a stronger understanding of company values, leading to better performance.
Training and Development: Investment in employee skills not only improves performance but also signals to employees that they are valued, enhancing morale and retention.
Workplace Well-being: Programs that support mental health and work-life balance can reduce burnout, a major contributor to disengagement and turnover.
Building a Culture of Employee Centricity
While data provides the roadmap, culture is the engine that drives change. Organisations that excel in employee experience share common traits:
Authentic Leadership: Leaders must genuinely value employees, not just as workers but as people. This includes showing empathy, recognising contributions, and fostering open communication.
Alignment Across Teams: CEOs, CHROs, and CFOs (or those in charge of these functions within smaller organisations) need to collaborate, ensuring that employee experience initiatives are embedded in broader business objectives rather than isolated HR programs.
Continuous Improvement: Employee needs evolve, and so must employee experience strategies. Regular feedback loops and adaptability are essential to staying ahead.
The Risk of Ignoring Employee Experience
In an era of hybrid work, shifting employee expectations, and fierce competition for talent, neglecting employee experience is no longer an option. A lacklustre experience can lead to disengagement, high turnover, and even reputational damage. In contrast, organisations that prioritise their workforce stand to benefit not only from operational improvements but also from enhanced brand reputation—employees who are proud of their workplace often become ambassadors, attracting talent and customers alike.
The Business Case for Employee Experience
The link between employee experience and growth is undeniable. Engaged employees drive innovation, customer satisfaction, and operational efficiency—all of which fuel revenue growth and profitability. As the Harvard Business Review study illustrates, even modest improvements in employee experience can result in significant financial returns.
For C-suite executives, the message is clear: employees are not just a cost to be managed but a resource to be nurtured. By placing people at the heart of business strategy, organisations can unlock a cycle of engagement, satisfaction, and growth. In doing so, they not only ensure their own success but also create a workplace where employees thrive—a win-win in every sense.
Who are Lagom Consulting?
At Lagom Consulting, we do more than craft marketing strategies; we become your strategic partner in navigating the complexities of the financial services landscape.
Our expertise lies in three key areas:
Growth Strategy – Helping you improve market share and attract new clients with clear, actionable plans.
Service Line Development – Assisting in the creation and launch of new revenue-generating services to expand your business.
International Expansion – Guiding your entry into new markets, with tailored advice and access to trusted providers who align with your operational needs.
We pride ourselves on a hands-on, no-nonsense approach. Whether stepping in as your fractional Chief Marketing Officer, Chief Commercial Officer, or Chief Revenue Officer, we act as an extension of your team—advising, supporting, and driving growth as though it were our own.
At Lagom Consulting, your success is our success. We believe in sustainable, results-driven marketing solutions that avoid the pitfalls of ad-hoc tactics. Instead, we focus on building long-term strategies that deliver measurable outcomes and set you apart in a competitive marketplace.
Partnering with Lagom Consulting means more than just working with consultants—it means gaining a trusted ally committed to growing with you.
Speak to us today to see how we can support you.