For many chief executives, surviving the challenges of the COVID-19 pandemic in 2020 offered a critical takeaway: Transitioning to a more remote workforce is one of the most cost-effective, beneficial investments any company can make.
New research from ESI ThoughtLab and ServiceNow suggests they should step up these investments in 2021. Survey data shows that digitizing employee experience boosts productivity while slashing costs, leading to increased satisfaction for employees and customers.
“A company worries about its bottom line,” says Yvette Encarnacion, SVP and director of human resources at Columbia Bank in New Jersey. “It also worries about the client experience and the employee experience. Investing in digitization addresses all three. Now I need one person instead of two to do manual processing. That hits the bottom line, keeps the person engaged, and keeps the clients happy.”
The pandemic is forcing some CEOs to consider that equation for the first time. “If someone had asked me two years ago to work from home for a month, I would have had a negative view on that,” says Yoni Assia, CEO of eToro, a social trading and investment firm.
But after navigating the initial challenges of managing a remote workforce, he says, “we have learned that we can run the organization effectively.” Looking ahead, Assia says he is focused on a new set of objectives to maintain a high-quality employee experience.
“How do you create and distribute culture, where people meet each other less?” he says. “How do you provide more tools to help people with their productivity and measure productivity in a distributed workforce? Those are some of the new challenges.”
According to the global survey of more than 600 executives across five major industries (financial services, healthcare, manufacturing, public sector, and telecom), 44% of companies cited increased employee productivity as a key benefit of digital employee experience (EX), more than any other.
Of the five verticals surveyed, healthcare and manufacturing organizations saw the greatest productivity benefits of digital EX: Just over half of organizations in each sector cited it as the strongest argument in favor of digitization.
More broadly, the organizations defined as being the most advanced with digital EX in the survey are also getting a significantly bigger productivity boost than relative beginners: Nearly 60% of EX “leaders” reported productivity gains, 17 percentage points higher than the rest of the pack.
The second-most significant benefit of digital EX is cost reduction. Forty-one percent of surveyed executives said that converting manual processes into digital workflows for employees created efficiencies that lowered costs. Manufacturing (49%) and public sector (42%) organizations were the biggest savers of all industries.
Adopting digital processes also had a cascade effect, improving both the customer experience (40%) and employee satisfaction (39%). Financial services firms led the way, with more than half of companies in the sector reporting higher customer and employee engagement scores.
These investments resulted in fewer customer complaints, coupled with less time and budget spent on manual tasks, leading to a happier, more productive workforce.
Low investment, high yield
Despite these benefits, companies aren’t spending much to digitize the employee experience. Across all sectors, organizations spent an average of $1.65 million annually on digitizing employee experience. With surveyed organizations averaging $7 billion in annual sales, that accounts for just 0.023% of revenue.
What types of organizations are making the biggest annual investments? Manufacturing firms ($2.3 million) led the pack, with 40% of that spend going toward robotic process automation (RPA) to automate repetitive work.
Where should CEOs make technology investments that support digital EX? According to the survey, the deepest areas of current tech spend are in RPA (29%) and cloud-based platforms (30%). But executives report seeing the greatest ROI from investments in cloud platforms (32%) and tools that allow them to collect employee feedback (30%).
In this latter category, leaders outdistance beginners by a wide margin (39% to 22%). That suggests another valuable takeaway for chief executives: Companies that succeed in a work-from-anywhere world try the hardest to listen to employees’ needs and address those as quickly as they can.