Here’s a statistic that might give you pause: 40% of employees are planning to quit their job or are unsure about their future at their current company, according to the 2025 Lighthouse Research & Advisory Culture, Performance and Recognition Study.
It’s a significant number that highlights the growing importance of understanding and improving employee experience.
What is “employee experience?”
Every company has two types of customers: external (the people consuming their products and services) and internal (the people they rely upon daily to deliver these crucial products and services and build revenue). Both types of customers are equally important.
However, many companies target all their efforts on their external customers at the expense of their internal customers. Focusing on employee experience rights this balance. It puts a spotlight firmly on employees as internal customers who need to be equipped with the optimal work environment, resources and support they need to serve external customers well and succeed.
Your employee experience – sometimes referred to as EX for short – is the sum total of the employee journey at your organization, from the recruitment, hiring and onboarding process to the exit interview. It encompasses every impression, interaction and job-impacting consideration along the way, including:
- Company mission, vision and values
- Workplace culture
- Benefits and compensation
- Policies, workflows and procedures
- Leadership and management style
- Communication
- Level of transparency
- Degree of workplace flexibility and support for work/life balance
- Dynamics within teams and among co-workers
- Tools and technologies used at work
- The actual workspace, whether physical or remote
- Employee-engagement initiatives, such as rewards and recognition
- Career development and growth opportunities
- Performance management
- Wellness programs and other wellbeing initiatives
- Access to ongoing resources and support
In short, it’s what it feels like to work at your company every day, and employee experience directly influences:
- How happy and fulfilled your employees are
- Whether employees feel valued and appreciated
- The depth of employees’ commitment to your organization
- How motivated employee feel each day
Ask yourself: Do employees like feel supported, valued and set up for success in their roles?
Why employee experience matters
More than ever, employee experience is emerging as one of the most powerful levers organizations have at their disposal to drive big results. When done well, it can drive real impact across the board, including:
- Higher productivity
- Stronger engagement
- Gained innovation
- Improved employee retention
- Increased revenue
Even so, many employers persist in viewing their employee experience as an optional, frivolous endeavor – a flex when they need to up their recruiting game and, on the flip side, an unnecessary expense to cut when budgets are tight.
However well intended, this approach may overlook the long-term impact of employee satisfaction and engagement.
Regardless of what’s going on in the labor market, employers can’t get complacent and pull back on investments in their employee experience. Even if everything looks calm on the surface and resignations are flat right now, when the market inevitably shifts again you’ll pay the price in the form of:
- Lost performance
- Reduced morale
- Departure of valuable employees
While labor markets shift, building employee goodwill and convincing your workforce to stay requires a consistent, long-term strategy.
Employee experience myths to dispel
1. “It’s just a perk.”
Workplace perks can be part of your overall employee experience, but your employee experience is so much bigger than a Friday pizza party or a paid gym membership.
Improving your employee experience isn’t a surface-level quick fix to make people feel good – it’s about alignment between what employees want and need and what organizations prioritize.
2. “I know what my employees want.”
So, what do employees want and need? As it turns out, there’s a pretty big disconnect between employer and employee perceptions of what their workplace is like and what is most important. Consider these sobering facts uncovered in the 2025 Lighthouse study:
Only 4 in 10 employees say their workplace prioritizes work/life balance well.
Employers are 23% more likely than employees to rate the culture as positive and supportive.
Companies are 25% more likely to underestimate the importance of fair compensation and benefits.
What does this mean for your company? Many initiatives – no matter how well meaning – will likely miss the mark because of erroneous assumptions about what employees value.
Instead, talk to your employees and figure out what matters most – then focus on those things consistently and execute well.
3. “A little bit of this and that will work.”
A piecemeal approach can often lead to misalignment or missed opportunities.
- All the specific elements of your employee experience must be part of a larger strategy and working in sync to avoid friction.
- Partial solutions fall flat – employees need both tools and support to succeed. Example: don’t just give employees a training program – also give them a manager that engages them in frequent conversations to give feedback on their performance, explain how new knowledge and skills relate to their roles and tie training to career goals.
According to the same Lighthouse study, when both the right tools and support are present, employees are 50% more likely to understand their roles and four times more likely to say their culture boosts productivity and satisfaction.
4. “It’s just employees who need support.”
Who in your company sets the tone for the work environment, works closely with employees, supports them and has the greatest influence on your employee experience? Your middle managers.
Who’s most likely to get overlooked in receiving support themselves? Also your middle managers.
Remember, even the best managers can’t thrive in an environment that doesn’t support them. They’re part of your workforce too and they also are susceptible to burnout and disengagement.
5. “Employees all want the same things.”
Although commonly shared values exist, the way people define a great employee experience isn’t one size fits all. It often depends on where they are in life and in their careers. For example, each generation, from Baby Boomers to Gen Z, tends to have its own unique priorities.
Interestingly, the Lighthouse study also found that the #1 priority for employees of all ages is work/life balance.
Talk to a diverse range of employees to inform your company’s approach and create space to accommodate their differences – like training managers to adapt their leadership style or tailoring recognition to individual preferences.
How to evaluate and improve your employee experience
Understand what’s working and what’s not by leveraging feedback mechanisms like:
- Employee surveys
- Focus groups
- Feedback sessions
Follow up each request for employee input with timely, visible action. Otherwise, these become missed opportunities to demonstrate to employees that what they say matters, and you can damage relationships with employees.
The case for employee experience as a business strategy
At the core of every business operation is your people.
People serve customers.
People do the work every day.
People dream up new ideas and innovations.
People respond and adapt to change.
As we’ve said before, when people are happy, they do these things well and it has a direct impact on your business. This is why employee experience matters to the bottom line – it’s a strategic lever that directly influences output, efficiency and, ultimately, profitability.
We call the combination of better productivity, performance and retention the “return on employee” – your return on the investment you make in your people by delivering a great employee experience.
Especially in small- to mid-sized companies, gains in productivity, performance and retention are critical. With leaner teams and fewer buffers for error or delay, these boosts have an outsized business impact.
Summing it all up
Employee experience is not a feel-good initiative that leaders trot out to help the company whenever times gets tough – it’s a core part of your business strategy that requires consistent, long-term attention and effort, regardless of labor markets. When done well, it generates a powerful “return on employee” in the form of better performance, productivity, engagement, retention and, ultimately, revenue. When crafting your employee experience, remember to talk to employees to understand their wants and needs, tailor the delivery to different preferences and make it part of a cohesive strategy that encompasses tools and support.
Want to learn more about employee experience in greater depth? Download the full report: A critical moment: Why employee experience should be every company’s priority.