It’s simple common sense that happy employees translate into happy customers, especially in customer-facing industries. It just stands to reason that if the server, cashier, bank teller, or retail employee is happy in their job, they’ll give better service to customers, who in turn will be happy with their experience. But Glassdoor did a bit of sleuthing to prove that it’s true. They linked their own unique data about employer ratings (how many stars a company has on Glassdoor, in other words) with the American Customer Satisfaction Index (ACSI). The goal was to take a look at how the mashup between the two data sets would shake out, and whether one was related to the other in any significant way.
What they found was a direct correlation between employee satisfaction and customer satisfaction. Specifically, for each one star improvement in an employer’s Glassdoor rating, they found a 1.3 point increase in customer satisfaction based on the ACSI. The effect was more than twice as large (each one star bump on Glassdoor equaled a 3.2 point bump on the ASCI) for companies with high customer contact with employees, like retail, food services, tourism, financial services, and health care.
Happy employees, happy customers. That’s great, but what effect does it really have on a company’s bottom line? Glassdoor went a bit further in its research to find out.
As it happens, higher ASCI scores and Glassdoor ratings are linked to higher company valuations. They found that each one star improvement on its Glassdoor rating translated into a 7.8% to 18.9% higher stock market valuations because of the improved customer satisfaction.
The key takeaway from all of these numbers for HR: The employee experience (EX) is just as important as the customer experience (CX), because one directly correlates to the other. It’s vital for HR to focus on making employees feel valued, engaged, appreciated, and heard. We all know how important those Glassdoor ratings are to talent acquisition and employee retention, but now there’s hard data that those ratings are important to customer satisfaction as well.
