As a business leader, you work very hard to know what is going on in your organization. You pride yourself on understanding and measuring every aspect of your business. You seek out data. You make informed decisions about risk, forecast growth, and connect investments to outcomes. You’re rigorous — OK, obsessive — about making sure there’s not a gap in how your customers experience your brand or product that could be filled by a competitor.

But do you know which five high-performing employees are most likely to quit? Do you know which new parents won’t return from parental leave despite every intention to come back to the workforce? Can you identify the experiences that are actually empowering new managers in their first leadership roles versus overwhelming them and causing undue stress? Without that knowledge, business leaders won’t know how to engage in the right ways to prevent unwanted employee attrition, burnout, and stress. Those gaps will be very costly with significant impact to the bottom line.

For too long, organizations have relied exclusively on operational or O-data™. O-data measures hard numbers like costs, accounting, attrition, supply chains, and sales. O-data is essential, but is a lagging indicator that tells you what is happening in your business. X-data™ measures the human factor data — an individual’s beliefs, sentiments, emotions, and intentions. X-data is a leading indicator that tells you why something is happening or will happen. Without both X- and O-data, it is impossible to get a full picture of your organization.

Culture, well-being, engagement, and trust are just a few of the themes that have dominated the workforce and people discussion over the last year. And they’re all important. But overwhelmingly, companies — including many fast-growth companies with reputations as disruptors — have neglected something far more important: experiences. These companies tend to focus on finding gaps in the consumer experience and filling them. But when it comes to their own people, they have an experience gap. This is their Achilles heel — and in many cases, they don’t know it until it’s too late.

The sustainably successful companies will be those that can identify and close experience gaps. Companies will gain a competitive advantage by filling people experience gaps in the form of new workforce models and experiences that are proving to be the secret sauce of company and financial growth. That doesn’t mean free food and a ping-pong table near every craft beer station. It means supporting people in ways that really matter — including through life experiences that may appear to have no direct connection to the workplace. In today’s experience economy, employees expect and seek out the same customer-grade experience of their favorite brands and products in their workplace. And the people experience — how your company supports your workforce in the moments that matter — is indicative of your business's future performance, growth, and success.

What kind of experiences? The birth of a child. The death of a loved one. Someone’s first leadership role or a promotion that requires them to relocate, put their children in new schools and put in extra hours, a health scare, or unexpected expense that affects one’s financial situation, just to name a few.

In many ways, these experiences define our lives and bring us meaning. They’re also often where the biggest pain points occur. If organizations zero in on what causes people stress and leads them to a state of burnout, they’ll see it’s often happening at the intersection of work and life. It’s why nearly a third of caregivers have had to leave their jobs to care for someone. It’s why over 75 percent of expecting mothers say they’re excited to go back to work after giving birth, but 43 percent of them will quit their jobs at some point after that. Quite simply, when people don’t feel supported, they disengage or leave. And employee attrition costs businesses an enormous amount of money, with some estimates suggesting the costs can be as high as 1.5x or 2x the departing employee’s annual salary.

If your company supports people in the experiences that matter most, you’re going to have a remarkable advantage when it comes to attracting and retaining top talent. When your people have what they need, and feel proud — not resentful — about their company’s influence on their lives, they’re going to be more motivated, more productive, more creative, more loyal. They’ll invest in their work, instead of dreaming of greener pastures or furtively scanning job listings. From there, the math is simple: a more engaged, productive workforce equals a healthier balance sheet, a stronger bottom line.

If you don’t support your people in this way, you’re putting your company at unnecessary risk. If you have an experience gap — where what you think is happening with your people is completely different that what’s actually happening — you risk losing your most talented people. After all, why would talented people stay with you if you’re failing them when other, more forward-thinking companies are creating great experiences for their people by combining X-data and O-data to help them thrive through the moments that matter?

Defining and Measuring the People Experience

If you’re thinking, “I already do what you’re talking about, we do people surveys…” — what we’re talking about is different. An annual survey or trust score helps you see black, white, and maybe some gray at a moment in time. You need to see your people experience in living color. As business leaders, you need to be able to understand the impact of the people experience on financial performance. You need to know what is happening, why it’s happening, and what actions to take to prevent unwanted scenarios before they occur and to help you correct them when they do occur.

Enter The Thrive XM Index, developed by Thrive Global and SAP + Qualtrics. The Index is redefining well-being as a category and is a celebration of companies creating exceptional people experiences and setting themselves up for sustainable business success.

How do we determine which companies are creating an exceptional people experience? With the Thrive XM Index, we’ve created a framework that gives companies a different way to gather insights about their own employee populations. It brings together an organization’s X-data (employee-reported people experience information) and O-data (HR-reported performance insights), and then explores their impact on business performance. Companies will be able to connect the people experience directly to their bottom line. And they’ll assess risk and forecast future growth by gaining unprecedented insight into the place where people experiences show up as business outcomes: on the income statement.  

Together, we’ve identified five key elements of the people experience that will be measured by the Thrive XM Index:

• Career Experience
• Family Experience
• Health Experience
• Financial Experience
• Time Experience

Within each of these experiences, we’ve mapped out the Moments That Matter, the moments in which companies’ relationships with their people are made or broken. They’re the moments when trust, loyalty and dedication are built — or disengagement and burnout take root. Over time, they become the difference between sustainable business performance and a dysfunctional people strategy that hinders growth, productivity, and performance.

The People Experiences and the Moments That Matter include:

Career Experience: This includes moments such as on-boarding, joining a new team, or becoming a manager for the first time. For example, imagine a retailer that is struggling with high turnover. Company leaders know they have an employee attrition problem, and they know this is increasing their recruiting costs and negatively impacting customer satisfaction, but they’re unsure of the root cause. When X-data reveals that new employees are overwhelmingly dissatisfied with the on-boarding process and don’t feel adequately equipped to perform at their best, leaders commit to improving the new employee experience, reducing turnover by 15 percent and yielding a meaningful improvement in SG&A costs.

Family Experience: This may include moments such as having a baby or caring for an elderly parent. Imagine you’re the head of a tech company and want to offer a maternity leave policy that’s good for your people and good for business. You know the costs to the company are high if women quit within the first year of returning to work — by one estimate, as much as $91,800 per mother. A traditional view suggests simply investing in a longer maternity leave policy. But X-data shows that merely extending your policy is not enough to retain these vital employees and reduce the cost of replacing them. It turns out that they want flexibility in taking their time away from work — including flexibility when and how they transition back. It takes a nuanced, experience based view to understand and respond to this.

Health Experience: From sick days to mental health to high stress moments, the health experience looks at key moments that can define the people experience at an organization. And not just executive and white-collar positions. Think of a manufacturing environment, where safety is paramount. Much of the conversation around health and safety focuses on downstream factors in the past, such as healthcare costs and incident reports. But when you zoom in on the individual employee experience — on the factory floor, or at a construction site — health and safety aren’t so one-dimensional. X-data helps you understand, for example, employee sentiment and gain insight into the workforce mindsets and beliefs that may be putting employees at greater risk of a safety incident. For example, digital distraction when leaving a worksite may be leading to a major increase in injuries. You can wait for an accident to occur to decide to fix the problem. Or, by getting regular, real time feedback you can take preventative action to better protect your people and improve business. Employee safety has direct effects on your bottom line: in 2017, the total cost of workplace injuries was $161.5 billion.

Financial Experience: Financial worries can be a leading cause of stress, but few companies think about how their peoples’ financial situations connect to the health of the company balance sheet. Imagine you oversee a company with a large call center division staffed by hourly workers. You’ve probably heard that most Americans don’t have enough savings to cover a $1,000 emergency expense, but you might not have considered how this can impact your workforce in ways that directly influence the customer experience and the bottom line. O-data will tell your workforce has a productivity or retention problem, but without X-data, you might never know that your workers’ financial stress was part of the root cause.

Time Experience: This includes moments such as leave, time off and flextime work schedules. Take the airline industry, where up to 15 percent of labor staffing and associated costs is planned to cover unplanned absenteeism. When X-data shows that employee engagement is one root cause of airline personnel “calling out” at the last minute, an HR department can shift its digital employee engagement strategy to reduce unplanned absenteeism and cut costs that will pass directly through to the bottom line.

How the Thrive XM Index is Different

There are a lot of tools out there that try to understand the employee experience. But the Thrive XM Index is different in key ways. Unlike existing corporate tools, which are often employer-centric, the Thrive XM Index is person-centric, taking a holistic view of employee well-being. We consider the full range of human experience, in which work is a key factor — but not the only factor. We have an upstream focus, examining the root causes of issues measured by other tools. We provide unprecedented insight into the upstream factors that determine employee well-being, performance and productivity — allowing you to anticipate challenges, course-correct and drive better outcomes. Finally, and most importantly, we focus on five key experiences and the moments that shape our lives and careers.

All these differentiating factors make the Index unique. But it’s the ability to bring together X-data and O-data to connect the people experience to the bottom line that make it transformative for businesses. To learn more about the Thrive XM Index, go to Fortune.com/ThriveXM.

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