Linking employee wellbeing to financial performance: an inconvenient truth

Employee wellbeing initiatives must coincide as much as possible with improving the customer experience.

Let us caveat the following by saying that, of course, we believe passionately in employers treating their employees with trust and empathy. It’s at the core of what RiddleBox is all about. And of course we acknowledge the serious impact that mental health issues are having on individuals’ ability to express their best.

But in order for CEOs and board rooms, generally motivated and targeted by short-term financial performance, to give the wellbeing agenda their attention (and thereby increase the chances of sustainable progress), the case for its impact on the bottom line needs to be far stronger.

Here at RiddleBox, we have been doing a lot of analysis to attempt to correlate wellbeing, employee experience, customer experience and performance from the data we collect from our clients.

This is what we have found over the last 13 years:

  • Wellbeing initiatives have a positive impact on employee experience (no surprise)

  • Often, where wellbeing initiatives are most obvious, employee experience is good but the customer experience and financial performance is poor

  • Where customer experience and financial performance are good, but employee experience is poor, any commercial success will only be short-term

  • Sustainable financial performance requires BOTH employee and customer experience to be good

And what do we mean by ‘good’?

We ask employees and customers to measure the experience they are receiving from their managers and organisations using our RBX Index, which uses the scores from 11 statements, and a big data algorithm, to generate a single experience score for each stakeholder group out of a maximum of 100. The employee and customer experience score needs to consistently be over 70 to result in sustainable financial performance.

The results comparing wellbeing and customer experience in the same organisation allow us to create the following graph:

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Zone A: Happy teams but often unproductive or un-focused. There is a lack of commercial acumen, customer-centricity and goal clarity. Result: poor performance

Zone B: Generally fulfilled and satisfied employees and customers. Could be improved by greater purpose alignment for employees, and even more customer success focus. Result: good performance

Zone C: A strategy which sees more customer-focus than employee attention. Result: increasing levels of employee attrition, stress and, ultimately, a decline in customer experience

Zone D: Pure customer or product focus which causes employees to be over-worked and feel under-valued. Result: strong financial performance which starts to decline when top talent leave and new talent don’t want to be treated in the same way

Zone E: Very fulfilled, satisfied and loyal employees who deliver a consistently outstanding customer experience. Result: lasting financial performance and stakeholder engagement

There seem to be 2 key conclusions:

Firstly, employee wellbeing initiatives should be accompanied by a clear strategic relevance and, where possible, a clear connection into improved customer experience.

Employee wellbeing and ‘customer success’ should not operate in silos.

For example, many organisations are investing in employee coaching. This clearly creates a valuable way for employees to improve self-awareness and provides them with space to reflect on challenges and opportunities. But the benefit should not stop with the employees: the skills gleaned in the coaching conversations can be channelled into customer dialogues, if the willing is there and the learnings are highlighted. After all, questioning techniques, active listening skills and empathy are the foundations of good sales practice.

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Secondly, it’s impossible to manage wellbeing or experience for employees or customers unless the perspectives of the different stakeholders are measured and compared over time to each other, to self-assessments and to performance KPIs. Research suggests that less than 1 in 5 organisations say they measure ROI from wellbeing initiatives, with 1 in 2 organisations relying on employee churn as the main indicator of the impact. A universally applicable measure of wellbeing, employee and customer experience – like RiddleBox’s RBX Index - is required to fairly benchmark an organisation, and correlating this number over time to financial performance is required to truly get the message to CEOs and board rooms that employee wellbeing, when combined with a related focus on the customer experience, leads to lasting commercial success.  

So the risk is that until customer metrics, employee engagement and wellbeing initiatives are combined onto a single platform, and trends are viewed through a performance lens, too many organisations will take the false short-cut of plying their employees with fruit, gym memberships and health insurance at the expense of true customer-centricity.

The reality is that you can have both ways.

RiddleBox are continuing their research into organisations’ wellbeing initiatives. Throughout June 2019 you can contribute to the research quickly and anonymously HERE