Uzma Atcha

Strategy Director, Merkle B2B, CXM Group - dentsu Singapore

The Service-Profit Chain stipulates that there is a direct correlation between a company's profitability, and its employees who are happy and engaged.

This Service-Profit Chain model works when an employee feels engaged and is more willing to go above and beyond to satisfy a customer, in turn creating value for the organisation. The customer ultimately sees the value and the happiness in an employee, and is more likely to purchase and continue being a repeat purchaser that will drive loyalty for an organisation. Once that loyalty is established, an organisation is more likely to see increased profitability. Thus, happy and engaged employees connect the dots with better profitability.

An increasing desire for values aligned with work

As a result of remote working during the pandemic, people have realised that they do not need to be in the office all the time. However, another macro factor that we need to pay attention to is this fundamental changing of the guard in the workforce. An increasing number of millennials and Gen Zs are becoming senior business decision makers. With each generation, there is going to be a difference in values and a difference in importance which they place on employee experience.

Increasingly more people are looking to have that values alignment with the work that they do. More people are looking for jobs beyond pay or beyond a career - the traditional ideals are no longer a motivation for individuals. So, how can business strategy be implemented in a way that trickles down to what an employee faces, experiences and feels every single day?

Time and investment commitment are critical to employee experience in change management

The biggest issues that organisations face are time and investment. Many companies fail to realise that any sort of change within an organisation impacts their employees. When many people look at change management, they look at things such as a digital transformation project, switching from Google Suites to Microsoft 365, or changing their enterprise resource planning (ERP) systems.

However, what they fail to realise is how that impacts the employees. For example, how an employee who is used to working on Excel spreadsheets is going to start using a system that tracks their time on the software. With such changes, any employee would potentially feel a little scared for their jobs. People are currently talking about AI and how that is going to replace their jobs, and these are very real concerns that need to be examined in employee experience.

Putting your Employee Value Proposition (EVP) to work

Shifting how we think about customer experience and linking it to employee experience is critical because it underscores the crucial role that engaged and motivated employees play in shaping customer satisfaction, ultimately leading to customer loyalty and increased revenue.

Creating this type of culture requires looking at your overall Employee Value Proposition (EVP) - a set of attributes and benefits that an employer offers to its employees. These may include tangible benefits like salary and health insurance, but also intangible benefits like flexible hours and a positive work culture.

Creating a compelling EVP is important for several reasons. First, it helps you attract top talent. In a competitive job market, candidates are looking for more than just a pay cheque – they want to work for a company that aligns with their values and offers a fulfilling work experience. Second, an EVP can help retain employees. By offering a compelling set of benefits, you can keep employees engaged and motivated. Finally, a strong EVP can boost your brand reputation and help you stand out in a crowded marketplace.

Terms like the great resignation, quiet quitting, and loud firing are symptoms of a much more significant generational and labour shift that isn’t going away anytime soon. How do we ensure employee satisfaction and engagement while also staying productive?

These five pillars form the backbone of the Service-Profit Chain:

  1. Internal Service Quality - By investing in employee development and fostering a supportive work environment through learning and development and engagement programs, companies can enhance internal service quality. This results in employees who feel empowered and valued.
  2. Employee Satisfaction - Happy and motivated employees are more likely to deliver exceptional service to customers, because they feel like they have skin in the game. Consequently, employee satisfaction correlates with customer satisfaction.
  3. Customer Satisfaction - When employees provide excellent service consistently, customer satisfaction increases. This, in turn, cultivates long-term loyalty and drives positive word-of-mouth.
  4. Customer Loyalty & Retention - Loyal customers are more likely to make repeat purchases and become brand advocates, thus generating a stable revenue flow.
  5. Profitability & Growth - Companies with higher customer satisfaction and loyalty are more likely to experience increased profitability and accelerated growth.

A strong EVP and a commitment to the Service-Profit Chain can help companies build a workplace culture that attracts top talent and leads to long-term success. Companies can thrive in today's ever-changing business landscape by investing in employee satisfaction and fostering a culture that prioritises customers.

Get in touch with us and unlock your company’s full potential: