On this episode of the Experience Unveiled I am joined by Workhuman President Tom Libretto for a conversation on employee experience and the ROI of employee rewards and recognition.
Our discussion covers:
- The journey that employee experience has taken over the past few years
- Data tied to the benefits of reward and recognition, not just for employees but for a company’s bottom line
- What makes for a great rewards and recognition program and where do companies often fall short?
- The Workhuman ROI guarantee
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Transcript:
Sherril Hanson: Hello everyone. I am Sherril Hanson, Senior Analyst with The Futurum Group, and I’d like to welcome everyone to Experience Unveiled, a podcast that focuses on the experience segment and includes customer experience and employee experience. Each episode is going to consist of a discussion with someone in the field, industry expert in either one of those areas. And so today I’m going to dig into employee experience. As an analyst in this space, I have always considered, and I do personally strongly believe in the strong tie between employee experience and customer experience. You simply cannot provide a great customer experience if your employees are struggling, if they’re not well-supported, if they’re disengaged. So coming out of the pandemic, there was this heightened focus and interest in employee experience and its supporting technologies. Companies were struggling with retention and recruitment. There was economic volatility and fluctuating labor trends.
And so these technologies that people were starting to investigate were things like employee feedback and voice of the employee, performance and development, communications tools, taking a hard look at your digital employee experience, and solutions to support wellbeing, community, and culture. And it also includes rewards and recognition, which is something that we’re going to be talking about today. So there have been some good gains in interest in employee experience, but it does remain a bit to be determined if that enthusiasm is going to keep building. And one of the keys to keeping this momentum going is going to be proving to organizations how investing in these technologies, it’s not just going to make for happier employees, that it’s going to help their bottom line. So today I’m welcoming Workhuman President Tom Libretto for a chat on this topic and to talk about why it’s so important to be making these investments in employee-supporting technologies. So Tom, thanks so much for being here.
Tom Libretto: Thanks, Sherril. It’s a pleasure to be here with you today.
Sherril Hanson: Yeah. So let’s dive right in. Workhuman’s a company that I have followed for a while, solidly in the rewards and recognition space, but I know also has some other solutions. But for those who might be unfamiliar, can you give us a high level on the company?
Tom Libretto: Yeah, sure. Workhuman, we’re over 20 years old and really pioneered this concept of employee recognition as part of a total reward strategy against the fundamental belief that we as human beings have a fundamental need to be recognized, appreciated. And through that we do our best work, and in aggregate we thrive as writ large employee populations and as human beings. And we’ve built, over the last 20 years, science-backed technology that maximizes the joy, the engagement, and the fulfillment that are derived out of frequent peer-to-peer social recognition.
Sherril Hanson: Thanks for that background, Tom. One of the topics that I’ve been eager to discuss with you is your take on where you feel companies are landing in their interest in EX-supporting technologies. I feel like every month it’s a new term. I’m sure you’re seeing it as well. The great resignation, quiet quitting, the big stay. The other day I saw rage applying. And so I feel like companies and HR groups have been a bit more in a reactive state rather than a proactive state. And as we’re starting to close out 2023, just wanted to get your gauge on what you’re seeing, and the journey that EX has been taking over the past few years and where you think we are now.
Tom Libretto: Yeah. I’d say, first of all, it’s a fascinating place to be. And you’re right, there is almost a never ending cycle of hype cycles. You mentioned a few. The great resignation, quiet quitting, bare minimum Mondays surrounded by economic volatility and geopolitical instability. All at the same time we’re seeing a massive change in employee expectations, some of them catalyzed by those market disruption events but others that have been building for quite some time as new generations enter the workforce. Things like putting a premium on recognition and appreciation in the workplace, connection and belonging, balance and well-being, strong workplace culture, inclusion, equity, and diversity, and wanting to work for companies that are socially and environmentally-responsible. So this confluence of really seismic events and trends are leading HR professionals to wonder, what the heck am I going to do about all of this?
Sherril Hanson: It’s a really long laundry list of things to have to take care of, too.
Tom Libretto: Yeah. And many companies get caught in a bit of the flywheel of trying to chase that next trend or that current trend and end up solving for the symptoms, not the root cause of what is underlying within their organization and driving either a thriving culture or a decaying culture.
Sherril Hanson: Yeah. Yeah. And definitely those are all trends we’re seeing as well. And I feel like it’s pretty easy to talk about what I look at a bit as the warm and fuzzies of rewards and recognition and employee experience. But there’s another side of this, and it’s the primary topic that I wanted to talk to you about today, which is the ROI of recognition.
Tom Libretto: Yeah.
Sherril Hanson: And Workhuman has partnered with Gallup to provide research not just on that topic but on a wide range of topics. And there’s been some compelling data coming out of that research that I was hoping you could bring up a few data points to chat about.
Tom Libretto: Yeah, absolutely. And I’ll start by saying that we’ve been a successful organization predominantly because we’re disciplined about drawing a bright red line between what has long been considered that warm and fuzzy thing that gets offered to employees and the impact of that on tangible business results. And we’re trying to move the conversation into one that starts and ends with, “Look, if you want to move an employee population forward into a thriving one that is going to have tangible impact on your top line and your bottom line, this is the best way to do it.” And like you said, we partnered with Gallup. We do our own research as well. And it unearths all sorts of evidence around why investments in strategic rewards and recognition and pervasive gratitude across an employee base are a much better investment, in a lot of cases, than other technology or program investments an HR leadership team might make or a company might make in general. So just to throw a few stats at you, when we analyzed the marketplace in general, we found that there’s a real dollar quantifiable impact to the concept of engagement, which has long been this qualitative and subjective territory.
Sherril Hanson: Right.
Tom Libretto: But for example, the organizations or employees that strongly agree that their organizations are great places to work, which is an indicator of their engagement with that company’s culture and their business, are five times more likely to say that when they are recognized. When they feel connected to that company’s culture. They are four times as likely to be engaged in their work every single day. They’re almost 70% less likely to feel burned out and 55% less likely to be looking for new job opportunities.
Sherril Hanson: Yeah.
Tom Libretto: So you pull that thread through a little further, and employees that answer that very simple question on the biannual or annual survey related to, do I feel appreciated and recognized for the work that I do? Moving that single question significantly higher through, for example, investments in strategic recognition programs has direct impact on top talent retention, employee engagement, ergo employee productivity, and ultimately that translates into higher revenue per employee and, ultimately, lower cost. Lower personnel cost impacting EBIDTA margins at the bottom line.
Sherril Hanson: Yeah. I’m wondering if you’re hearing more about this. People are hybrid, and whether companies are requiring it, not requiring it, it’s going to be in our mix moving forward. And having that hybrid workforce, where people are a little bit more physically removed from the office, it’s going really important to make sure, with these EX types of technologies, that they’re feeling that sense of belonging even though they might not be physically sitting at their desk next to their co-workers every day.
Tom Libretto: Yeah, 100%. We talk all the time about almost the eradication of personal connections that are built extemporaneously when we’re together face-to-face in an office environment. You think about the younger populations in the workforce, not to age myself but it’s been a long time, but when I first started in a business environment as an early worker, the relationships I formed with my coworkers were of tremendous value both personally and professionally. And with that now-
Sherril Hanson: And still now. You carry those relationships with you throughout your career. And so it’s a really important factor for people to think about.
Tom Libretto: It is. And to your point, figuring out ways, mechanisms, technologies, or programs to reintroduce person-to-person connectivity, it has to be a top priority, particularly, as you say, because this world of hybrid is going to be with us forever.
Sherril Hanson: Right. Right. Another piece of data that stood out to me in some of the research that was published with Workhuman and Gallup was that only about, I think it was 34% of employees are saying that their employer has a formal recognition program. So work to be done in that area on adoption.
Tom Libretto: Yeah.
Sherril Hanson: But what was also interesting, that out of those that did have one, only 13% were rating it as excellent. And so my question to you is, for those companies that are adopting it, as well as the technology vendors that are providing a recognition program, what’s missing? What makes for an excellent recognition program?
Tom Libretto: Yeah, it’s a super important question. And I’ll say that the 13%, or the other 87% who don’t rate their employer’s recognition and rewards programs as excellent, very often experience a program that’s hidden in a dark corner of the company’s intranet. It’s not role modeled by senior leadership. It’s not communicated robustly and regularly to employees until it becomes muscle memory, and therefore it never does. So those are programs that are check-the-box exercises so that, coming out of an annual survey, an HR department can say, “Yep, we did that.” But they really didn’t do it.
Sherril Hanson: Yeah.
Tom Libretto: Those programs that are designed from the start to catalyze and support the company’s values and then are executed and evidenced every single day are the ones that are designed for results from the get-go. And they have senior leadership buy-in. They’re role-modeled by leaders across the organization. And it becomes part of the day-to-day operation of the company. And when that happens, that’s when those hockey stick impacts on employee engagement, well-being, connectiveness all take root.
Sherril Hanson: Yeah. It’s really important to have those systems in employees workflow.
Tom Libretto: Yeah.
Sherril Hanson: And that’s definitely a big issue that we’re seeing not just for our rewards and recognition program, but any of these employee-facing technologies that are being implemented. That they do get a little bit dusty if you don’t have support from multiple levels helping to keep raising it up.
Tom Libretto: Yeah. 100%.
Sherril Hanson: Yeah. And so the last thing I really wanted to chat with you about and that I thought was super interesting was this announcement that Workhuman made this past fall about something called the Workhuman ROI Guarantee. So I was hoping you could give some color to that and why it was something you decided to offer.
Tom Libretto: Yeah. Look, we, for a long time, as evidenced by the Gallup research that we collaborated on, are big believers… not just believers, but we prove time and time again that recognition does deliver these types of measurable and quantifiable results. So we took it a step further and offered to the market a guarantee that puts our fees at risk if we’re unable to prove to a specific client that we have moved the needle on these predefined measurable impact results. And putting that into the marketplace has been tremendous for us. We’ve got a lot of great reaction. A little bit of controversy, as people are like-
Sherril Hanson: I can only imagine, so yeah.
Tom Libretto: But we so deeply believe that investments in this area result in these sizable outcomes and that we, in many ways, uniquely can prove that with a robust data and analytics capability that we’ve built over those 20 years, that we were willing to offer this to the marketplace and change the conversation about it.
Sherril Hanson: Yeah. And that kind of touches on my last question, which is around the increasingly crowded employee experience technology field. The EX technology ecosystem. I pointed out at the beginning, there’s, as we view it, a lot of different segments in there. And there’s companies that focus maybe just on one, or companies that try to do all of it. And then now I feel like you also have the larger human capital management companies of the world that might offer a tiny little application, and now they’re positioning themselves as employee experience companies. And so do you feel this ROI Guarantee helps somewhat as a differentiator in a crowded field? And you mentioned maybe it could even be like a catalyst to help move the market forward. Or is it an attention-getter for C-level executives? Or all of the above? Probably that. Yeah.
Tom Libretto: It’s definitely all of the above. We think about it sort of equal parts education and changing the dialogue from the check-box exercise, and we can claim victory because we addressed this employee need or want, to something that is more fundamental about moving a business forward with quantifiable impact that CEOs and CFOs and COOs and CHROs will understand and be able to use to validate investments in something like rewards and recognition versus other things that are more subjective.
Sherril Hanson: Right.
Tom Libretto: It’s also equal parts a challenge to the market to think more strategically and quantifiably about the outcomes that they purport to drive. And last but not least, very much a differentiator. As I mentioned, we’ve invested huge sums of money in a data and analytics capability that we provide with our product and service to our customers that allow them to tap into all manner of correlative analysis to different types of data and business outcomes that they’re trying to drive. And this was a way to crystallize all of that into a market offering.
Sherril Hanson: Yeah, that data is key. And what we’ve also been seeing is it really helps CHROs or other similar types of roles get a seat at the table when they have this data to present upwards to people.
Tom Libretto: Absolutely.
Sherril Hanson: Which also helps move the strategy of EX forward.
Tom Libretto: Yeah. It’s been a long time since a CHRO has been able to go forward with an investment ask that is backed by science-based evidence around the different needles that they can move within their organization.
Sherril Hanson: Right, right. Well, Tom, this has been a great discussion. Nice to meet you and to chat about this important topic. I’m going to be really eager to see how things shape up in 2024.
Tom Libretto: Yeah. Thanks, Sherril. It’s been a great experience talking to you, and I can’t wait for the next one.
Sherril Hanson: Yeah. So thank you, everyone, for tuning in, and be sure to subscribe, rate, and review the podcast on your preferred platform, and watch for the next episode of Experience Unveiled.
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.
