In 2020, while the S&P 500 experienced a 3.7% decline, the subscription economy saw a remarkable 13.3% growth.
In South Korea, the subscription trend gained momentum following Netflix's successful entry in 2016, expanding beyond content subscriptions like music, videos, and games to encompass products such as automobiles, furniture, and cosmetics.
Hyundai's Hyundai Select is transforming the service-oriented mobility ecosystem into a subscription-based model, offering everything from cars to bicycles and parking spaces.
According to a 2021 Incruit survey, 7 out of 10 adults in the country have experienced online subscription services.
With a trend favoring utility over ownership and advancements in technologies like cloud and big data, a significant number of companies, from large corporations to startups, are actively embracing the subscription-based business model. The subscription business not only combines products and services to create new value but also secures loyal customers, leading to stable profits – a win-win situation for businesses.
Fast forward to 2025, the subscription economy is projected to reach a staggering global market size of 2 trillion dollars, with around 100 billion dollars in Korea – solidifying its presence in the market.
Subscription economy signifies a shift towards personalized services based on customer data, delivered through platforms that transcend time and location constraints. In the realm of subscription business, customer experience plays a pivotal role in determining the success of a company.
However, customer experience is not the sole determining factor.
The process of service delivery directly reflects the 'employee experience'. A company cannot thrive in the subscription business without an exceptional employee experience.
In essence, in the world of subscription business, customer experience is a necessary condition for success, while the addition of employee experience serves as a sufficient condition.
While not a new concept, employee experience has resurfaced as a focal point in management discussions, particularly after the shifts brought on by the pandemic and the exodus of talent in the U.S. in 2020. As power dynamics shifted from companies to employees, the younger workforce, especially the Gen Z cohort, began showing a keen interest in the quality of their work experiences. This introspection led many to make decisions to change careers or opt-out of traditional employment paths.
The concept that "an employee's time moves faster than the company's time" goes beyond merely offering more remote work opportunities, flexibility, or delegation of authority. It emphasizes the need for strengthening employee relations, building trust, and focusing on employee satisfaction to ensure retention.
In the evolving landscape of a digitally enhanced environment and the challenges brought about by the pandemic, companies are grappling with issues such as employee engagement, retention, and knowledge sharing. As a result, employee experience has risen to the top priority in organizational strategies. A 2021 Willis Towers Watson global survey revealed that 92% of top decision-makers identified enhancing employee experience as a critical priority for their organizations in the next three years.
Another significant reason for the heightened interest in employee experience is the role of social media in talent acquisition. How employees experience the company doesn't remain a secret. The efforts a company puts into enhancing employee experience are visible and evaluated by employees on social media platforms like Glassdoor and Blind. Positive reviews and recommendations for a great employee experience can attract top talent, individuals seeking a company that provides a clear purpose, meaningful opportunities for growth, and where social media serves as a guide in their job search.
It delves into the daily life of employees, covering onboarding, growth, performance management, and more throughout their journey within an organization. The employee lifecycle begins from the day they join the company until the day they depart, encompassing their interactions and involvement with the organization.
Many believe that new employees exhibit high engagement levels that gradually decrease over time, reaching a low point when they decide to leave. However, the reality is far more complex.
Within a company, the employee lifecycle extends beyond onboarding and development, encompassing pivotal moments such as reassignment and parental leave.
This spiral-shaped employee lifecycle becomes even more pronounced as employees engage with digital customers.
In fact, employees from various multinational corporations have shared with me, "As we interact with digital customers, new tasks continue to emerge without clear onboarding or evaluation criteria in place."
It is crucial to consider that at any point in the employee lifecycle, a negative employee experience can lead to attrition. Instances of attrition may manifest as perception issues, increased absenteeism, decreased productivity, accidents, and ultimately, turnover.
For a company to thrive, it must provide tailored experiences at the 'moments that matter' for its employees.
Therefore, designing and implementing employee experiences at an organizational level is essential. A key aspect of understanding employee experience at the organizational level involves having specific, measurable metrics in place. These metrics may encompass employee satisfaction, engagement, and productivity at these crucial 'moments that matter'.
By enhancing employee experience, companies can ultimately increase employee engagement.
In essence, employee experience is the input, and employee engagement is the output.
Employee engagement is a measure of dedication, involvement, and passion towards work and the company. Engaged employees understand how they fit into the company's plans and strive to achieve the company's goals. It's the difference between showing up for work and showing up to collect a paycheck.
According to a 2021 Gallup survey on employee engagement, 36% of employees in the U.S. exhibit high levels of engagement, while 15% show low engagement levels. 49% fall into the category of moderate engagement.
Characteristics of highly engaged employees include:
On the other hand, characteristics of disengaged employees include:
No business function can operate without being influenced by employee engagement.
Employees are the engines that drive business functions. When employees feel invested in and respected, the engine performs at its best.
Turning exceptional employee experiences into high employee engagement results in a new customer experience through employee experience.
According to Gallup's research, companies that foster high levels of employee engagement drive higher business growth compared to those that do not.
In this scenario, employees are happier, healthier, and stay longer.
Additionally, key metrics of customer experience are more positive:
While employee experience is not a new concept, the concept of 'enhancing employee experience as a new customer experience' is a strategy that makes employees happier and, at the same time, creates advocate customers. In the fast-paced transition to digital business and the service economy, companies looking to survive and succeed must establish and implement strategies to enhance both employee experience and customer experience simultaneously.
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