Experts reveal the challenges companies face when they don’t listen to employees, highlighting the importance of employee experience.
The importance of employee experience and employee listening is clear: Companies that listen to employees are more likely to be seen as an employer of choice, drive revenue, meet or exceed their financial targets, and achieve high levels of customer satisfaction and retention, according to research from the Medallia Institute and the Josh Bersin Company.
Given these benefits of employee experience, it’s obvious why every company needs an employee listening strategy. But the reality is, many do not.
In fact, according to a study we conducted in 2021, more than 50% of workers say their employers rarely ask or simply don’t ask for employee feedback. The same study found that the majority (68%) of employees whose employers do not ask for employee feedback are dissatisfied with their employer, compared to less than half (48%) of employees whose companies do not conduct employee listening initiatives say they’re not satisfied with their employer.
What Happens When Companies Don’t Listen to Employees
When companies fail to listen to employees, the consequences are real and widespread, impacting every aspect of the organization. Not giving employees the opportunity to share how they’re doing, what they need to be successful, and what the company could be doing better on an ongoing basis can lead to adverse customer, employee, and business outcomes.
Here are some of the top pain points companies can experience if they don’t listen to employees, according to Medallia’s in-house experts who have firsthand, real-world experience running employee listening and experience initiatives at leading organizations like Liberty Mutual Insurance, Citizens Bank, and the FDA.
#1: Customer experience suffers and customer satisfaction drops
“Employee behavior is customer experience, and if employees aren’t having exceptional, high-quality experiences themselves as employees, then the likelihood of them delivering great customer experiences is very low,” says Nina Bianchi, Solutions Principal, Public Sector, who served as Chief of People and Culture at the U. S. Food and Drug Administration (FDA) during the peak of the pandemic, in partnership with the U. S. General Services Administration IT Modernization Centers of Excellence.
“If employees don’t have the right resources — if they don’t feel like they have permission from management to solve customer problems or to make decisions when they’re interacting with customers, then that will eventually filter down to poor customer satisfaction scores,” adds Diane Daum, Senior EX Advisor, who has a PhD in industrial and organizational psychology and held internal consulting roles in HR analytics at Wells Fargo and in customer satisfaction and loyalty at TIAA.
#2: Employees become disempowered and disengaged, and lose trust in the organization
When employees don’t feel heard, they begin to lack psychological safety, can become disempowered, and lose trust in their organization, all of which can be costly for the business, according to Elaine Demers, Senior Manager of Employee Experience & Engagement, where she leads Medallia’s comprehensive employee listening program, collecting feedback across more than 20 touchpoints in the employee journey.
According to Gallup, employee disengagement costs organizations the equivalent of 18% of each disengaged employee’s salary annually. This research indicates that companies with 10,000 employees lose $60.3 million in decreased productivity annually.
#3: Employee morale decreases while burnout and mental health issues increase
Organizations that don’t collect employee feedback run the risk of overlooking points of friction within the employee experience, such as persistent, systemic issues that are time-consuming, tedious, and frustrating for the employee.
“When employees come to work to have an impact and to make a difference and they can’t, and instead end up spending their time on administrative tasks and time-consuming work, they experience burnout because they’re not doing something of value,” says Melissa Arronte, PhD, Global Employee Experience Practice Lead, and former Head of People Analytics at Liberty Mutual Insurance. “When we continually work on something that doesn’t really matter and we’re not really making progress, it’s stressful.”
#4: Employees become more likely to leave in greater numbers
Over the last year we’ve seen what happens when employees feel disempowered, disengaged, and burned out as a result of not being supported by their employer — they will eventually find their next opportunity.
“The Great Resignation came about as a result of employees not feeling valued, feeling disconnected from the organization, and not feeling heard,” says David Ostberg, Solutions Principal, Employee Experience, an industrial/organizational psychologist with over 10 years of specialization in employee experience and organizational culture. “If you don’t listen to your employees, your best people will leave and they’ll go to your competitors.”
As employee turnover increases, costs go up dramatically as organizations are left looking to replace people that were already trained. According to Gallup, these recruiting, onboarding, and training expenses can add up to between 1.5 to 2 times the salary of each employee that needs to be replaced.
#5: The employer’s brand reputation suffers
Not only do organizations end up losing top talent, their employer brand reputation could become tarnished as well. Employees who are having a rough time and don’t feel heard may open up about their negative experiences on platforms like Glassdoor or Comparable, explains Demers.
#6: Attracting new hires becomes more challenging
“In a competitive talent market, negative reviews on these platforms deter talent,” she adds. “Almost every candidate looks for reviews about a company.”
At the end of the day, employees want to work in great organizations where they feel valued and are having quality experiences, which is why employee listening activities that ensure currency employees feel recognized and supported are essential to organizations being able to attract new hires in the future, says Bianchi.
#7: Organizations have a harder time innovating and keeping up with the competition
Employees are often an untapped source of insight about what can be done to improve internal processes and systems and the customer experience. Employee listening programs can give workers a chance to share their innovative ideas, something companies might otherwise overlook.
#8: Companies struggle to create strategic goals and advance real, impactful change
Many companies center their employee listening on one-off annual or quarterly engagement surveys, missing the opportunity to hear from and learn from employees in real time. That lack of follow-through prevents organizations from being able to elevate the employee experience, says Grace Black, Group Director, Employee Experience Advisory, who has 20+ years of experience in designing employee feedback programs.
Being able to truly create strategic goals requires active, ongoing intentional listening that’s tailored to employees’ needs, providing them the opportunity to share feedback when they want via the channels they prefer, says Toni Land, MBA, BSN, CPXP and Head of Clinical Healthcare Experience, who has spent 30 years in healthcare working on patient, family, and employee experience initiatives.
#9: Instead of making data-driven decisions, team leads make decisions based on gut intuition and personal biases
“Managers make decisions that have huge financial implications about employee experience every day, but they make these decisions without data, instead relying on intuition, anecdotes, and their own personal experiences and biases,” says Arronte. “That’s why we need to measure the employee experience, to change this paradigm and truly enable data-driven decision making across the organization.”
#10: Overall company performance drops due to declining sales and revenue
All of the pain points mentioned here ultimately impact company performance — when employees leave, costs can add up and when customer experience and satisfaction drop, sales and revenue can go down.
Solve These Challenges with a Successful Employee Experience Program
Launching an employee listening strategy can deliver key outcomes for organizations, and the best part is this: companies can get started in as little as a few weeks and advance their efforts over time. Once up and running, you’ll successfully avoid several pain points that drag down both company and employee performance.
Want to create an effective employee experience program that works? Download your copy of Expert Insights: The Ultimate Guide to Building an Employee Experience Program, a step-by-step playbook packed with expert insights from leaders who have firsthand experience launching and advancing programs that drive results.
