Why employee engagement is a bigger CX concern than ever before

While stubborn obstacles such as organisational silos and company culture are consistently ranked amongst the biggest challenges confronting customer experience leaders, the latest MyCustomer research has seen some new concerns emerge as serious issues. 

Published in collaboration with the European Customer Experience Organization (ECXO), the research report – Customer Experience Leadership In An Uncertain Economy – asked 143 senior customer experience leaders about what they believe will be the biggest obstacles to the success of their CX programmes in the next 18 months.

Organisational silos (reported by 50% of respondents) and company culture (cited by 40%) were comfortably the most commonly cited obstacle - as they were in previous studies conducted by MyCustomer in 2020 and 2022. 

But there were also some challenges that customer experience leaders have become significantly more concerned about over the past 12 months. Unsurprisingly, given the economic landscape, budgets/investment is something that has risen to be of greater concern as the global financial situation has worsened. 

And connected to this, demonstrating CX programme ROI was cited as an obstacle by far greater numbers than in previous studies. 

MyCustomer

But one surprising issue that has dramatically escalated in concern in the latest report is employee engagement/motivation. While it was cited by few in 2020 and 2022 (cited by only 14% a piece), it has now shot up to 28% of our respondents reporting it as a potential obstacle. 

Employee engagement has, of course, always been something that should be of note to customer experience management. 

“The customer experience does not exist in a vacuum and is the product of many factors,” says Steve Belgraver, senior manager of client delivery at NTT and a founding member of the ECXO. “Depending on your preferred definition it is fair to say they all agree that one of the crucial factors that determines CX is determined by the employees of the service provider. This is especially true for products and services requiring a lot of employee-customer interaction. 

“But it goes much further than that as those same employees are also often the ones ‘behind the scenes’ responsible for implementing, running and improving the required underlying business processes. And indeed studies have shown that happy employees not only correlate well with efficiency, creativity and productivity but ultimately happy customers. And it’s the organisation’s leadership which plays a key role in enabling their people, through engaging leadership and by instilling a sense of purpose and pride that actualises employee potential. In short, whatever happens inside the organisations is felt outside by customers.”

Susanne Fries-Palm, chief customer officer at Yonder, and a founding member and senior advisor of ECXO, is in agreement. 

“Employee engagement is a key factor in determining the success of a customer experience programme and finally the success of a company,” she notes. “We can see that engaged employees are much more likely to provide high-quality customer service and deliver positive customer experiences. When employees are unmotivated, it negatively affects their performance and thus the customer's experience.”

She continues: “A simple example: although you do not see the employee when on the phone, you can hear if the employee is smiling or not. That means the employee's ‘mood’ impacts the contact with the customer and thus also the relationship with the customer. We can see that every day, motivated employees, which create positive experiences for the customer, can thus even ‘compensate’ small ‘bugs’ in the product. Engaged employees are more likely to go above and beyond for customers. Whereas disengaged employees bear the risk of providing poor service, or they might be less likely to adhere to company policies and procedures. This can lead to negative customer experiences. Finally, it damages the reputation of the brand.

“In addition, low employee engagement might impact internal collaboration and communication, which are critical for successful CX programmes. When employees are not engaged, they are less likely to share ideas, collaborate with their colleagues, or provide constructive feedback that can help improve the customer experience or processes etc. I think it is natural, we probably all have already experienced that it is much more fun and effective to collaborate with engaged employees.”

A growing concern

But with the past 18 months having witnessed the phenomenon of ‘the Great Resignation’ and then ‘Quiet Quitting’ in the wake of the pandemic, it would seem that senior customer experience professionals are now more concerned than ever about employee engagement and the impact it could have for customer service performance. Furthermore, there is a serious talent shortage across many industries, and customer service is no exception. 

“Our own CEM+ research shows a correlation of around 85% between the way employees and customers perceive the brand. So the employee experience drives the customer experience providing they are intentional and aligned,” says Shaun Smith, founder of Smith+Co.

“This is even more important post-COVID because employees have higher expectations of work-life balance and many sectors, hospitality for example, are suffering from staff shortages. That means the employment market is even more competitive and brands are competing for talent. 

“The way to win is to be just as clear in communicating the proposition to prospective employees as you are to your customers. We also know that brand purpose is important because employees want to work with companies that they admire for their values and the contribution they make to society. As we suggested in our book ‘On Purpose - Delivering A Branded Customer Experience People Love’, having a clear purpose that speaks to what your customers, employees and the broader society values is becoming increasingly important.”

Martin Hill-Wilson, founder of Brainfood Consulting, believes that customer experience leaders need to work with their counterparts in human resources to ensure that staff feel supported, engaged and cared for, thereby staving off any serious issues. 

“Back to back crises have left ‘little in the tank’ for many,” he explains. “So resilience is low and attention is often diverted to issues that erode wellness: the energy foundation of motivation and engagement. Wise CX leaders will use their non silos mindsets to see important connections between their efforts and the whole vulnerability/wellbeing/new work-life balance expectations that are currently engulfing their HR colleagues, and join forces in a common quest for boosting stakeholder vitality and loyalty.”

Fries-Palm agrees that CX leaders have an important role to play in employee engagement. “It is essential for organisations but also for customer experience leaders to pay attention to employee engagement and motivate their teams to provide positive customer experiences.

“This can be done for example by showing positive examples, being a role model,  recognising and rewarding employees, providing opportunities for professional development, creating a positive and supportive workplace culture, and involving employees in decision-making and problem-solving processes related to the customer experience.”

And Kari Korkiakoski, CEO of Futurelab Experience, also believes that to counteract the growing challenge of employee engagement, businesses might also want to put their recruitment strategy under the microscope - and this includes customer service and CX teams. 

“Instead of using the famous Richard Branson quote ‘Hire the best and they will take care of the rest’, companies should understand what kind of CX they want to delivery how to differentiate from competition, and what kind of capabilities and skills that requires. If you are running a seven star hotel, you would need personalities and people that are fully capable of delivering all the details in your CX book. But if you run a fully DIY-hotel, you - to simplify - don’t need anyone to smile (of course, if there is a problem someone needs to fix that). You just need supporting staff. And this doesn’t mean that DIY-hotel CX would be worse - it just serves different audiences with different CX goals. 

“And now, if you have the problem of finding employees that would be able and ready to deliver your high goals for CX, you might need to re-evaluate your strategy and focus more on automated and digital services. I’m not saying this is what I would wish for, but this could be the reality.” 

Download the full research paper for further insights.