Reports Link Employee Engagement and Customer Experience

By Rebecca R. Hastings, SPHR Oct 29, 2012
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A number of reports released in 2012 that examine the link between engaged employees and customer satisfaction suggest that human resource professionals could hold the key to improving the customer experience and generating better business results.

“Companies that want to improve customer experience (CX) will need their HR professionals to become more involved in building employee engagement,” according to the report CX Needs More HR Focus on Employee Engagement, released Sept. 26, 2012, by Temkin Group, a market research and consulting firm.

Temkin surveyed 302 HR professionals from U.S. organizations in August 2012, and asked them to prioritize 14 specific HR activities—including recruiting/hiring, employee engagement, manager training and executive coaching—and rate their effectiveness in each area. The top five priorities, rated as “critical” or “very important” by respondents, were:

  • Recruiting and hiring.
  • Retaining key employees.
  • Employee training.
  • Supporting corporate strategy.
  • Employee engagement.

Although a majority of respondents rated their effectiveness in each area as good or better, the study revealed a 14 percentage point gap between the importance and effectiveness of two activities: retaining key employees and employee engagement. When asked about their priorities for the next three years, respondents placed retention and engagement at the top of the list of areas requiring the most improvement.

One in five respondents said that “few employees” were highly engaged at their companies. Eight percent said “almost all” employees were engaged; 28 percent said “most” were engaged, and 44 percent said “many” were engaged.

Fewer than half of HR professionals (48 percent) said they are responsible for ensuring managers are evaluated based on the employee engagement levels of their employees.

Moreover, HR professionals said there are a number of obstacles that prevent them from helping their company become more customer-centric. Topping the list:

  • HR professionals do not have the bandwidth (35 percent).
  • HR leadership has not defined it as a priority for HR (32 percent).
  • Senior leaders have not defined it as a priority for the company (32 percent).

Employee engagement is critical for customer experience success,” said Bruce Temkin, managing partner of Temkin Group, in a news release. The results provide a compelling case for customer experience and human resource professionals to work together more closely, he added.

Remove Systemic Obstacles to Good Service

The Maritz Poll, a separate employee engagement study released Sept. 6, 2012, found that employees often feel their hands are tied by corporate policies that focus on bottom-line needs, rather than customer needs.

“There is a lot of talk about how happy employees result in happy customers, but little discussion of how unhappy customers produce disengaged employees,” said Rick Garlick, senior director of consulting for the Hospitality Research Group at Maritz Research.

“When the employee becomes the ‘fall guy’ because their hands are tied by poor customer service policies, nobody wins,” he said in a news release. “In such scenarios, the customer is not helped (and may be lost as a result), the employee feels helpless and inadequate and the company’s bottom line suffers,” he added.

Maritz surveyed 2,879 full-time U.S.-based employees and found that fewer than one in five companies have policies and practices that facilitate effective customer service. For example:

  • 8 percent of employees said their company’s policies and procedures make it easy to satisfy customers.
  • 9 percent said their company frequently seeks suggestions for improving customer satisfaction from employees who have regular contact with customers.
  • 10 percent said their company sets specific goals for achieving and improving customer service and satisfaction.
  • 10 percent say their company provides effective training to support excellent customer service.
  • 13 percent said that they have the authority they need to respond to customer problems and requests promptly.

Moreover, just 17 percent said they completely understand the values that their company wants to convey to customers.

Employees’ views are changing for the worse, according to Maritz.

  • Just 20 percent of employees said they feel providing excellent customer service is their company’s top priority, down from 29 percent in 2011.
  • Even fewer—14 percent—said their workgroup has a clear understanding of customers’ needs, down from 20 percent in 2011.

Nevertheless, more than half (52 percent) of those surveyed who have direct interaction with customers said they enjoy customer interactions very much.

“Our survey respondents make the solution quite clear: empower employees to help customers and both will view the company in a more positive light,” Garlick said.

Motivation for HR

With a long list of responsibilities to fill, HR professionals might wonder what role they can—and should—play in supporting a service-oriented culture.

According to “Employee Behavior Increases Customer Spending,” a research summary released Oct. 4, 2012, HR professionals can help their companies increase revenue by as much as nearly 23 percent by investing wisely in communication, recognition, and incentive programs to improve employee engagement.

The paper, published by a thought leadership organization called The Forum, affiliated with Northwestern University, is based on research conducted by Dr. Frank Mulhern of Northwestern, together with researchers Don Schultz, Heidi Schultz, and Robert Passikoff.

“Customer perceptions of the brand, and the employee behaviors that influenced them, had a direct and positive impact on how much money customers spend per visit over time,” the report concluded.

The researchers found that a 10 percent increase in effort made by employees to try to satisfy the needs of a customer translated into a 22.7 percent increase in customer spending. Moreover, the link between employee satisfaction, customer satisfaction and financial performance existed even when employees didn’t have direct customer contact.

The report’s authors advise HR executives to improve their engagement and communication with all employees, not just those who deal with customers, or risk squandering additional growth opportunities.

Rebecca R. Hastings, SPHR, is an online editor/manager for SHRM.

Related Articles:

Employee Engagement: How to Get It and Keep It, SHRM Online Employee Relations Discipline, June 2012
Culture Sets Tone for Engagement, HR News, June 2012

Expert: Processes, Not People, Drag Down Engagement, SHRM Online Employee Relations Discipline, May 2012

Retail Sector Struggles with Low Employee Engagement, SHRM Online Employee Relations Discipline, April 2012

When Surveying, Treat Employees Like Customers, SHRM Online Employee Relations Discipline, March 2012

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