Thinking About Slashing the Employee Experience Budget? Think Again

Between 2022 and 2023, employee engagement fell from 48% to 44%, and culture energy fell from 69% to 66% in the U.S. According to Forrester, those numbers are expected to drop drastically again in 2024 as companies look to cut costs, divesting in the employee experience, (mistakenly) deeming it not so mission-critical. 

Employers say they plan to pull back on employee perks, learning and development, workplace flexibility, and DEI—all of which total up to the employee experience (EX). And it’s likely because the labor market is cooling. 

Deprioritizing Employee Experience Is a Bad Idea 

U.S. job growth fell to 150,000 last month, and unemployment rose to 3.9%, according to the U.S. Bureau of Labor Statistics October jobs report, meaning workers have lost some bargaining power and leverage from the historic levels in 2021 and 2022. 

Resultedly, heading into 2024, employers are less likely to cater to employee tastes and attitudes, or care about keeping engagement numbers high. 

“Oftentimes employers will invest in employee experience when there’s a lot of attrition, or things are going poorly on the employee front, and they can’t keep talent,” said the authors of the Forrester report—and then abandon it when things improve. 

However, deprioritizing employee experience is never a good idea, regardless of the state of the labor market or company retention.  

That’s because a positive employee experience can raise engagement, reduce turnover, improve workplace culture, increase everyone’s productivity, and build better customer relationships. Ultimately, the employee experience affects profits, and employers threaten their bottom line when they turn away from it. 

Targeted Ways to Invest In Employee Experience 

In 2024, cutting the employee experience budget should not be about divesting it but rather focusing solely on employee programs with a true return on their investment. 

Here are the top ways employers can positively affect the employee experience in 2024 that pack a punch: 

• Build an employee rewards and recognition program.
  S2Verify recently surveyed HR leaders (C-suite, managers, administrators, and procurement specialists) from across the country, in industries ranging from financial services to construction to fine arts, at companies of all sizes ranging from three employees to 7,000 to take a pulse on the current state of HR and what HR departments are gearing up for in 2024. When asked to rank the most critical HR tech solutions for effectively executing all HR tasks and strategies in 2024, HR leaders chose employee rewards and recognition solutions as their number one priority.
  
  HR professionals are gearing up to build rewards and recognition programs in 2024 that acknowledge, celebrate, and amplify employee achievements and accomplishments among their colleagues and peers—ultimately recognizing that appreciation is key to a healthy workplace (97% of employees say that being recognized motivates them to do their best work), encouraging desired behaviors in employees, and improving engagement, productivity, and retention.

• Help employees connect to their purpose.
  According to the same S2Verify report, most HR departments (26%) intend to strengthen internal communications and emphasize company purpose, mission, and values to improve the employee experience in 2024. This move is likely in response to the fact that eighty—nine percent of employees desire a sense of purpose at work, as reported by McKinsey in a recent report titled Help Your Employees Find Purpose–Or Watch Them Leave.
  
  For employees, purpose-driven work means more daily motivation and enjoyment on the job. It means higher productivity; work doesn’t feel empty or futile any more. It feels meaningful and exciting. It means further career enrichment and development since employees connected to their purpose at work tend to care more about and dig deeper into their subject matter. It even opens the door for career mobility as purpose-driven work makes employees more likely to stick around (and stick it out through hard times).
  
  Purpose-driven work holistically improves the employee experience, which is why employees are helping employees connect to their purpose in 2024. Find out how here.

• Collect better data around the employee experience.
  The S2Verify trend report shows that employee happiness and satisfaction will be the number one focus area for HR data analytics and metrics in 2024. In general, the new year will be about collecting better, more sophisticated data about the employee experience across the employee lifecycle.
  
  Typical efforts to measure employee engagement (and other EX indicators) often involve gathering data on digital activity, badge swipes, absenteeism, and time—off analytics. However, the real challenge for HR leaders in 2024 will be to use data to understand and enhance the link between employee achievement and organizational success rather than merely monitoring work compliance.
  
  Tracking employee happiness and satisfaction via surveys and NPS will be one such method. Finding ways to gauge employee mental health and well-being, monitoring recognition frequency, and digging deeper into attrition patterns will also be important. 

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