Introduction
Employee experience (EX) has been an interesting segment to follow in 2023. There was a lot of progress in several areas including preliminary usage of AI across employee experience supporting technologies, more focus on certain labor segments and the increased use of data for more proactive strategies.
But what to expect in 2024? Some have been saying it may be a year of reassessment and pulling back on initiatives but I do not see this year as one where EX will lose ground. There could be some shifting priorities, but I do believe that this increased acknowledgement of EX as a critical factor to not just employee satisfaction but to operational efficiencies and financial gains will help to make 2024 a stable year for EX investments.
2023 Was the EX Year of …
Increased Focus on Agent Experience and Frontline Experience
This got some legs under it right after the pandemic, as those chaotic months revealed the gaps for these workers that had always been there, but 2023 saw some deepened interest in how to better support this large and diverse group of workers. Thankfully so, as frontline workers face lack of connection and belonging, subpar communications, lack of feedback opportunities and a plethora of technologies and systems to interact with. This doesn’t mean the problems were solved but means that the problems have been more widely acknowledged and companies are offering more specific solutions.
For frontline workers such as field service employees, there were solutions and capabilities announced that were aimed at helping to alleviate challenges such juggling a fragmented array of applications and needing to perform repetitive and mundane tasks. Examples included the announcements from Microsoft and Salesforce in this area.
Agent experience was particularly active this year with solutions announced focused on productivity supporting capabilities as well as some areas more directly tied to agent satisfaction and happiness. Agent burnout has been long known to be a real issue and one that is costly both in terms of lackluster employee engagement. Solutions to identify and get a feel for agent sentiment and possible burnout got some traction. Examples of this include announcements from Cisco Webex, Intradiem, and Cogito.
Companies also looked at how they can help their agents do their jobs better and potentially, perform it from where they might want through mobile apps. These technology can allow agents to deliver sales, service, or support from wherever they are, so long as they are connected to the internet.
Maturing Voice of the Employee (VoE) Programs + Using All Data Types for a More Proactive Strategy
In the EX technology ecosystem, feedback and VoE were solutions that have been a bit further along in adoption as companies move from data collection to analysis and action. The collection of data is becoming commoditized in the EX market, but it is that data that fuels the information flow that uncovers successes, failures, and areas of growing concern. With continued struggles to recruit and retain employees (particularly frontline workers), keeping a pulse on employee sentiment and satisfaction is more important than ever. For both CX and EX, it is often this data that fuels improvements and priorities across a company. This year saw progress in tying that data together and turning it into actionable intelligence. This was a trend across the board—for frontline, knowledge workers and agents. This includes not just employee feedback data, but data from operations, performance review and customer experience.
Making the submission of feedback easier also saw increased focus. It is ideal to have feedback become something that is in the flow of a work experience rather than an added action or responsibility, and it can also speed along the feedback loop.
Some interesting solution introductions this year included those from the likely experience management candidates such as Qualtrics and contact center companies such as Genesys but also other market players such as Beekeeper, 15Five, Netigate, and Fount.
The (Slow) Ramp of AI Across EX
Yes, there were so many announcements around AI to support HR and EX. The particularly hot area, as already mentioned, was in agent experience. And while there were certainly a lot of interesting capabilities launched and product road maps introduced, the ones that were actually in deployment and supporting a more positive agent experience included developing a solid bot and self-service strategy as well as functionalities such as post call summarization, next best action suggestions, sentiment analysis, real time coaching and knowledge base improvements and automation. Announcements of note in this area include those from Verint, Cisco Webex, RingCentral, and Amazon Connect. The use of AI in distilling down the data from VoE programs (similar to how AI was supporting this use case for CX) was also a welcome trend.
Another area, and one that will be very important heading into 2024 is the use of AI to help alleviate mundane HR tasks so that this group can focus on more strategic issues. It’s still beginning stages, but the use of AI to help solve the growing challenge of training, development, and upskilling got notice this past year and I expect it to be an area that HR will embrace. There has been a lot of movement in the labor market, partially spurred by the Great Resignation, the exploration of new career paths, retirements, and now layoffs. That means a lot of institutional and company-specific training walking out the door, and the market is experiencing a real skills gap. Aside from the pain point this is causing employers, training and capability development is becoming a critical component of an employee’s experience. People want to be supported in building or deepening skill sets that they can use for personal and career development. And companies will need to do this in the most employee-supporting but yet efficient way possible.
This past year saw announcements such as SAP SuccessFactors layering in AI across it entire HXM suite, that helps support not just talent acquisition and the smoothing of employee-employer types of transactions, but also the use of AI within a talent intelligence hub, that gives a company a broad picture, or inventory of the skills within its workforce, but also helps support employees in their own development journey. Companies like Workday, Oracle, and Ceridian also made announcements around AI- driven capabilities to support the EX.
Deepened Conversations around ROI of EX
While there have been frequent conversations around the popular topic of how EX supports CX and how happy employees make for happy customers, this conversation has broadened to include how EX itself can be a boon to the bottom line. While perhaps not as far along as the strategy that embraces the EX to CX conversation, 2023 was the year where this topic got more attention.
Technology segments such as rewards and recognition and those that support wellbeing, community and workplace connection are often looked at as perhaps “softer” parts of an EX that are “nice” to have. However, data points to a more a more concrete connection to bottom line. Companies who have a more mature employee feedback program are 6x more likely to exceed financial targets and 7x more likely to retain talent, even during times of high attrition. Rewards and recognition is also strongly tied financial results. I recently had an interesting conversation with reward and recognition provider Workhuman’s CEO, who had really solid data points around the ROI of recognition. In a year where budgets may be looked at closely, the data gathered in 2023 will be important proof points.
What Is Next for 2024
These are some trends in EX that I foresee developing in the coming year and will be digging into these a bit more as the year progresses.
- More acknowledgement of digital EX: An employee’s day-to-day interactions with not just people but also their supporting technologies can make or break that journey and either result in employee dissatisfaction and low engagement or serve as an enabler through points of potential frustration and friction. I expect to see more focus on this (throughout the employee journey, including onboarding) and companies investigating ways to help remove these potential friction points through a variety of actions. WalkMe’s support of EX through its Digital Adoption Platform is a good example of this strategy. I found Zendesk’s approach of applying what was working well for their customers and applying it to employees, also of interest, and a harbinger of what’s to come in the CX-EX segment.
- Continued AI Use Case Development: This one is obvious, of course, but I think 2024 will have people looking at the question—were all these copilot technologies good colleagues or not? I expect to see more incoming data, particularly from the contact center segment that will help support or redirect these use cases. There will also be a more cautious approach to the use of AI than we have seen in customer experience. Its more nuanced, there are more privacy and ethical concerns and to date, companies haven’t done a great job of building internal trust and strongly communicating the benefits. I expect this to change this year.
- Workforce Engagement Management (WEM) gains deeper acknowledgement of being critical to EX in contact centers. I struggled on whether to put this as a 2023 trend, or an area of 2024 growth but I still feel like contact centers are just beginning to connect these dots. The vendors in the space have actually been doing a good job helping companies reimagine WEM in this area (Genesys is a good example) and there will be more progress to come.
- Large companies continue to launch EX-related capabilities (or reposition existing ones as EX). Microsoft really fleshed out its EX platform Viva this past year and Oracle introduced new capabilities to its Oracle ME platform. There has always been debate on what is EX technology and what is not, but I expect that this year, with employees being concerned with the economy, there may be increased talk and perhaps some reframing of how payment flexibility and benefits are viewed and how they are part of the EX.
- Consolidation and acquisition for smaller niche EX- focused companies.
Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.
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Author Information
As a detail-oriented researcher, Sherril is expert at discovering, gathering and compiling industry and market data to create clear, actionable market and competitive intelligence. With deep experience in market analysis and segmentation she is a consummate collaborator with strong communication skills adept at supporting and forming relationships with cross-functional teams in all levels of organizations.
She brings more than 20 years of experience in technology research and marketing; prior to her current role, she was a Research Analyst at Omdia, authoring market and ecosystem reports on Artificial Intelligence, Robotics, and User Interface technologies. Sherril was previously Manager of Market Research at Intrado Life and Safety, providing competitive analysis and intelligence, business development support, and analyst relations.
Sherril holds a Master of Business Administration in Marketing from University of Colorado, Boulder and a Bachelor of Arts in Psychology from Rutgers University.
