CHAPTER 13
The Cost of Employee Experience

One of the things that organizations always get concerned about is cost. Specifically, I hear comments like “We don't have the budget that company X has.” This usually happens because of an overemphasis on things such as free gourmet food, designer office spaces, and crazy perks like free dry cleaning, massages, and on‐site dog walking. It's true; these things do cost money but the majority of things that shape the employee experience are actually free. What's the cost of treating people well, giving them flexibility and autonomy, hiring a diverse group of people, and giving them the opportunity to learn and grow? How we treat our people is free. Let's look at the 17 variables again below and see which ones require the most significant investment.

The majority of the 17 variables that employees care about most at work actually require little financial investment. Still, there are plenty of things that do cost a considerable amount. You can see a cost breakdown in Figure 13.1. A common example is office space and design. It's not exactly free to transition from cubicles and closed spaces to gorgeous floor plans with wooden floors, tons of natural light, cool‐looking conference rooms, and standing desks. General Electric (GE) recently went through this change, and I had the opportunity to visit its new offices in Boston while hosting one of our Future of Work Forums. Walking into the building, you'd think you're visiting a start‐up in San Francisco. It turns out that all the employees working in this location used to have offices, and now virtually everyone works in a multiworkspace environment (with mainly open spaces) with free snacks, nice adjustable desks, and beautiful decor. GE, like many other organizations, actually saw a real estate cost savings per square foot by shifting from an all office and cubicle layout to something more modern. It turns out you can actually fit far more people in this type of layout. The real estate cost savings were then used to further invest in things such as free snacks and nice decor. The point is that investing in some of these things doesn't necessarily mean that the organization has to spend more money.

Illustration depicting Cost of Employee Experience Variables.

Figure 13.1 Cost of Employee Experience Variables

If we're specifically looking at perks, then perhaps no organization is as famous as Google for its massive list of cool things that employees get, ranging from car washes and oil changes to organic grocery delivery to haircuts and salons to free food and even a concierge! What few people realize is that these things are not paid for in full by Google for employees. Companies like Google make these services available and are able to get negotiated rates, but oftentimes employees actually pay for them. For example, it doesn't cost Google anything to allow a mobile car wash and oil change company to come on site to help employees, but it does cost employees to use the services. Making perks available versus actually paying for all of these perks in full are two different things. When most of us hear of all the crazy things that Google does, we assume that the company is paying for everything, but that's not the case. Google focuses on convenience and on making life easier for employees, but it doesn't actually pay for everything. Some things it does actually cover, such as free food, subsidized child care, or shuttle services.

These things can be quite costly to Google, but they are worth it to make life easier for its people. Interestingly enough, according to Laszlo Bock, advisor of Google, the perks aren't the reason why people join or stay at the company. Google does these things for three simple reasons: It's mostly easy, it's rewarding, and it feels right. I know; it might not sound realistic or practical to do all the wonderful things that Google does, but according to Bock, “Remember, that most of these programs are free. They simply require someone at your company to go out and find a vendor who wants to sell to your employees, or organize a lunch, or invite a speaker to visit. Everyone wins.”1 But of course, Google didn't become an Experiential Organization simply by having great perks. It also scored off the charts for diversity and inclusion, employees feeling like they are a part of a team, the ability to learn something new or advance, and several other variables.

However, let's not be so naive as to think that investing in employee experience is quite that simple or quite that cheap. All the forward‐thinking organizations highlighted in this book will tell you that they have made considerable investments in everything ranging from people analytics and technology solutions to new management and leadership styles to learning and education programs to completely redesigning and rebuilding their people functions. Organizations like T‐Mobile, LinkedIn, Cisco, and others have quite literally held hackathons where they try to break their traditional human resources functions and workplace practices while coming up with better solutions.

The reason why employee experience is such a hard concept for many organizations to wrap their minds around is they are simply not designed to focus on delivering them. In other words, although the cost of implementing the 17 variables discussed earlier might not be that great, the cost to design an organization that is able to implement those 17 variables is. If you recall, at the beginning of the book, we looked at how our organizations have been created based on the ideas that employees are cogs, managers are zookeepers, and work is drudgery. Shifting from an organization that is used to thinking this way to one that thinks about creating employee experiences is definitely a grand challenge, which means resources are necessary. The Experiential Organizations in this book have quite literally had to redesign themselves so that they could be in a position to deliver experiences to their people. There's simply no getting around that.

The interesting thing is that these are crucial business investments that are going to have to be made one way or the other, either now or when your organization is stuck trying to play catch‐up to the competition. As shown from all the business and financial analysis in the previous chapter, the return on investment from making these investments in employee experience should be an absolute no‐brainer.

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