The ROI of frontline employee feedback

It’s a well-worn cliché for companies to claim that their employees are their most valuable asset. But are you actually harnessing the power of your employees? To do that, you need to have employee feedback channels. So are you listening to upward feedback from your frontline employees? Or are you leaving this valuable asset untapped?

Why effective employee feedback is important

Here are 5 reasons you should capture upward feedback from your frontline employees. Your frontline employees are at the forefront of your business. Maybe they’re dealing with customers. Maybe they’re directly producing your product. Maybe they’re cleaning your locations. Wherever they are, these employees have the real world, real-time insights that can drive sales, secure customer loyalty and grow your business.

1. It addresses changing customer needs—in real time

Businesses invest millions of dollars in market research and customer insight surveys—without tapping into their key source of customer insights. Your frontline employees handle customer questions and feedback every day. Implementing strong employee feedback systems gives you a direct line to what your customers really care about.

Take fashion brand Zara. Fashion is a notoriously fast-paced and competitive environment. To stay ahead of the curve, Zara relies on their retail staff to share insights like customer requests, ideas for new cuts and styles and even trends they identify by studying what customers wear as they shop. 

Brand strategist Martin Roll explains: “Zara employees are trained to listen, watch and be attentive to even the smallest seismographic signals from their customers, which can be an initial sign that a new trend is taking shape.”

The results? By gathering employee insights, Zara beats out the competition. Whereas competitors may take months to showcase a new style, Zara can have them on the shop floor in a matter of weeks. Using the signals from your frontline feedback channels can help you take pole position in your market, anticipating new trends and meeting customer needs as they arise. And that means higher sales, better CX and stronger customer loyalty. 

2. It empowers your workforce to drive business outcomes

Empowering your frontline employees with upward feedback channels may also be the key to boosting your sales and growing your business. 

When you empower your employees and make them feel that their actions have a direct impact on the business, you can turn them into active ambassadors for your brand. A study from the Harvard Business Review showed that when frontline employees were empowered, there was a significant boost in business performance. According to the study, companies who invested in employee empowerment reported higher levels of customer satisfaction, service quality improvements, top-line growth and boosts in market position. 

By empowering your employees to share their feedback, you create a virtuous circle. Creating a connection between the work your employees do and business outcomes encourages them to feel a sense of pride in their work. As you encourage frontline employees to develop new ways to boost customer satisfaction and brand loyalty, you make every location into a customer experience lab. And then by gathering that employee feedback and best practices, you can scale the most successful ideas across your business. The result? Your employees are engaged, and you’re seeing better business outcomes. 

This culture shift is part of what Bain & Company calls “frontline obsession,” which is all about securing customers as your best advocates, empowering your frontline employees and encouraging relentless experimentation

3. It wins the war for talent by being an employer of choice

Labor costs are no joke. If you want to win the war for talent, you need to focus on building the emotional bond between your employees and your mission. 

The workforce is changing. Gen Z and millennials now make up more than half of the US workforce and they arrive at work with different expectations. Our own research has found that frontlines now have a different hierarchy of needs focused on openness, transparency, respect and recognition. Sure, employees will show up for a paycheck. But employees who have a commitment to your business will go above and beyond and deliver real business gains.   

So, how do you create a winning employee experience? According to LinkedIn’s Global Talent Trends Report 2020 it’s all about listening to and acting upon employee feedback—and expanding the circle of which employees are engaged and involved in decision making.

While head office may be used to soliciting feedback from deskbound employees, frontline employees can be overlooked as a source of critical information. But when a core part of your employer brand is listening to your workforce—your entire workforce—you attract more top-performing candidates that want to join your organization.  

4. It avoids unnecessary employee turnover

There’s nothing worse than spending weeks recruiting, hiring and training staff, only to have them quit in the first month (or the first day!). And it’s not only frustrating: it’s costing your business money, too.

A report by the Center for American Progress estimated the typical cost of turnover at 21% of an employee’s annual salary. And according to the Bureau of Labor Statistics, the annual rate of separations is particularly high for industries with high numbers of frontline employees. So how do you prevent a sky-high turnover rate and protect your bottom line?

The evidence is clear. Giving space for employees to share their feedback (even when they’re dissatisfied) can prevent employees from walking. Researchers from the Good Business Lab found that employees at one manufacturing company who were given a chance to voice their concerns were far less likely to quit than those who didn’t receive the same feedback opportunity.

In the current labor shortage, already-high turnover rates are at risk of getting out of control. Knowing that feedback is welcomed and will be listened to is a crucial part of getting your top people to stay put. 

5. It saves money through better data-driven decisions

Your frontline employees are experts in their area. When you gather their feedback, you can make data-driven decisions with the input of the people who really know how the job gets done. Take the example of the national airline who saved $30 million dollars when they engaged their cleaners, bag handlers, ground crew and ticket agents in coming up with cost-saving ideas 🤯.

In fact, broadening your sources of feedback can lead to more creative solutions and limit the risk of groupthink. Diversity in teams has been repeatedly shown to lead to better business decisions—one study found, for example, that inclusive teams make better decisions 87% of the time. That’s why it’s so important for frontline and frontline organizations to ensure they’re hearing from voices across the business when making decisions. By engaging frontline employees in upward feedback channels, you increase your chance of identifying missed opportunities—and avoiding costly mistakes.

Why acting on employee feedback is important

One final warning: gathering frontline feedback alone isn’t enough. You need to act on the feedback. According to a recent report by LinkedIn, 1 in 3 companies do not regularly act on employee feedback—and that’s a problem. 

Ignoring frontline feedback doesn’t just leave employees feeling like they’re not heard at work. It also leaves valuable ideas on the table. Famously, Hewlett Packard ignored Steve Wozniak when he went to the company with his prototype for a personal computer, and we all know how that ended. 

Of course, changing an organization’s culture to bring in new employee feedback channels can take time and effort, but it may be the key to boosting your competitive advantage. After all, it was a junior software engineer’s suggestion that led to the creation of Amazon Prime. 

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Your frontline employees are an invaluable source of ideas, energy and creativity. When you harness the insights of your frontline employees, you create a culture of innovation. And you make it clear to every employee, from shop floor to C-suite, that they are playing a vital role in building the next phase of your company’s success. Who wouldn’t want to be a part of that?