Employee engagement is more than just a feel-good factor; it directly impacts your business’s finances.
Neglecting to measure employee engagement can take a toll on your business.
The key is to have the right metrics to gauge your employees’ engagement levels.
This blog explores various methods and critical metrics recommended by experts to measure employee engagement in your organisation.
But before delving into that, let’s address a crucial question.
Why should you measure employee engagement?
To improve employee engagement, it’s essential that you first measure it.
William Powell of The Leadership Advisor says, “There are over 20 years of statistical data and peer-reviewed documents that show a distinct correlation between engaged employees and better performance/bottom line numbers.”
Gallup survey also confirms that when your employees are engaged, they are 17% more productive, leading to 21% higher profitability.
Here’s how measuring employee engagement benefits you:
- Solve problems: Measuring employee engagement levels helps you address issues before they worsen. You won’t have to wonder why your employee retention suddenly plummets.
- Builds trust: Asking your employees for feedback shows them you care how they feel about their work and overall experience, leading to mutual trust.
- Increased retention: Employees who feel engaged and valued are less likely to seek another job, increasing loyalty to your organisation.
- Better commitment: Employee engagement means higher commitment. Engaged employees fit in and better understand the goals of your organisation.
- Improved customer service: If your employees are engaged, they will be more attentive towards your customers, leading to 10% higher customer reviews.
Employee engagement is a win-win situation for your business and team because it benefits both.
However, you may face some challenges in measuring employee engagement.
What are the problems with measuring employee engagement?
Some things are easy to measure because they have concrete answers. For example, the time you spend driving to work or your height and weight.
But employee engagement is not one of those things. It is an abstract emotion influenced by many different factors.
That’s why it’s challenging to gather employee engagement data and then interpret it.
Below are some key challenges that you can face while measuring employee engagement.
1. No clear definition of employee engagement
How your organisation defines and interprets employee engagement may differ from other businesses.
Your business may define employee engagement as happiness, while other organisations see it as satisfaction or commitment to their company goals.
This makes it hard to establish reliable metrics to gauge engagement levels company-wide.
2. Engagement is not productivity
William Powell says, “Employee engagement is much more on the emotional level than simply carrying out a task efficiently.”
So, you should not confuse engagement with employee productivity.
Employee satisfaction and engagement may contribute to productivity, but they are not productivity.
Unlike productivity, emotional states are hard to understand and measure..
3. Outside factors influencing engagement
While factors within your workplace can impact employee engagement, various external influences also play a role.
Various things can add up to create how your employees feel about working with you. Things such as the current unemployment rate, the cost of living in their area, any mortgage crisis, or family issues.
“In times of dramatically high unemployment, employees may feel vulnerable and emotionally connected to the firm. This is because they are happy the firm has provided them with a job,” says Arvind Verma of Elezor Consulting Services.
You can control these challenges by creating a proper employee engagement strategy and knowing the right metrics to measure.
The following sections discuss these in detail.
How to measure employee engagement? The tools, methods, and processes:
Let’s look at different methods to assess employee engagement levels.
1. Frequent short surveys
Employee engagement surveys allow you to check in with your staff regularly and get a pulse on their feelings about their work.
The process is simple.
You need to ask 5-10 questions about employees’ experiences at work and what, if any, changes they would make.
This consistent feedback will help you identify any issues early on and make the necessary changes to keep your team happy and productive.
2. Set up 1-on-1 meetings
Holding regular 1-on-1 meetings with every team member is a great way to understand what’s going on with them.
The advantage of this feedback collection method is that you can get more information about each issue because it’s a private and safe conversation.
IAPPD America’s President, Scott J. Simmerman, suggests, “Managers should ask questions and listen. They should ask their people for ideas about what needs to improve to make their workplace more efficient, and those ideas should be implemented.”
3. Calculate employee Net Promoter Score (eNPS)
eNPS is a more reliable metric for measuring employee engagement than other methods because it provides a numeric score.
This score is determined by asking a simple question that reflects an employee’s loyalty.
Use a question like this: Would you be willing to recommend the organisation as an excellent place to work?
You can add an anonymous comments section for employees to express honest opinions.
4. Identify employee engagement goals
Employee engagement goals help you determine which employees are disengaged at work and what your engagement metrics are trying to achieve.
While each company’s engagement goals differ, here are some example benchmarks to help you get started:
- Employees feel that their opinions matter at work.
- Employees notice professional growth and career development opportunities.
- Net Promoter Scores are nine or above on average.
- There is a high level of employee retention for a certain period.
- Employees regularly open your internal newsletter and show interest in company news.
5. Exit employee surveys
Use exit surveys to collect feedback from employees leaving your company.
Since your organisation no longer employs these individuals, they share honest feedback without fearing losing their jobs for speaking negatively about their experience.
Thus, exit surveys can give your managers honest employee feedback and insights.
Your exit survey should contain questions like:
- Were you given the tools and resources needed to do your job well?
- Did you receive feedback that helped improve your performance?
- What was the key deciding factor for you to accept the new opportunity?
- One thing you liked the most and least about your role?
These are some of the methods that you can use to measure employee engagement.
Now, let’s look at a step-by-step guide to measuring employee engagement.
A step-by-step guide to measuring your employee engagement with surveys
Here’s a simple process to measure your employee engagement using pulse surveys.
Step 1: Define your goals
Before you begin the process, decide what you want to achieve with the survey.
Do you want to gauge overall job satisfaction, understand employees’ views on management and leadership, identify areas of improvement, or something else?
Clearly defining your goals will guide your decision-making process throughout this exercise.
Step 2: Choose a survey tool
Select an online survey tool that will serve your needs.
Some options include SurveyMonkey, Google Forms, or specific engagement survey tools such as TinyPulse or SurveySparrow.
Ensure your chosen tool allows for anonymity to encourage honest feedback.
Step 3: Design the survey
Construct your survey. Start with demographic questions to help you categorise responses. Then, ask engagement-related questions.
A combination of grading scales and open-ended questions can provide a thorough understanding.
However, keep it short and focused since it’s a pulse survey. It should take no more than 5-10 minutes to complete.
Here are some questions to include in your survey:
- On a scale of 1-10, how satisfied are you with your job?
- How well do you feel your manager supports your professional development? (Rate 1-5)
- Do you have the tools and resources necessary to perform your job effectively? (Yes/No)
- How would you rate your work-life balance on a scale of 1-5?
- Do you feel that you are valued and recognised for your work? (Yes/No)
- On a scale of 1-10, how would you rate the communication from leadership?
- Are your input or ideas welcomed and considered? (Yes/No)
- Do you see yourself working here one year from now? (Yes/No)
- How would you rate your understanding of the company’s strategic goals? (Rate 1-5)
- On a scale of 1-5, how strongly do you feel aligned with the company culture?
- How confident are you in the leadership of this company? (Rate 1-5)
- Are there sufficient growth opportunities for you in the company? (Yes/No)
- What is one thing you would change about our work environment to improve your job satisfaction?
- How can our company better support your professional growth?
- What would it be if you could improve one aspect of the communication from leadership?
Step 4: Communicate to your employees
Before rolling out the survey, communicate its purpose to your employees.
Tell them how you’ll use the results and assure your employees of the confidentiality of their responses. You will see an increase in participation rate and quality of responses.
Step 5: Deploy the survey
Send out your survey to employees and ensure everyone can access it.
You may need to send reminders to ensure a high response rate.
Step 6: Analyse and interpret the data
Once you’ve collected the responses, it’s time to analyse the data.
Pay attention to both quantitative and qualitative data. Identify trends, areas of strength, and areas that need improvement.
Step 7: Share the results
Communicate the results back to your employees transparently and thoughtfully.
Highlight what you’ve learned and what steps the organisation plans to take.
Step 8: Take action
Create an action plan based on the results of the survey.
This could involve implementing new policies, changing current practices, or initiating training programs.
Step 9: Reevaluate
Conduct pulse surveys periodically (quarterly or biannually) to check progress towards your goals. Reevaluate and adjust your strategy based on these follow-up surveys.
Remember, the goal is not just to measure employee engagement but also to improve it.
Surveys provide you with the data to make informed decisions about improving your workplace.
Now that we’ve established the need to enhance employee engagement through surveys let’s shift our focus to the practical aspect. The key metrics and KPIs you should track to improve employee engagement.
What are the most essential metrics/KPIs for measuring employee engagement?
According to employee engagement experts, these are the 5 metrics you should understand and track to assess employee engagement level at work:
- Employee absenteeism
- Employee turnover
- Employee retention
- Employee net promoter score (eNPS)
- Employer review site ratings
Based on these metrics, you can take action to improve employee engagement across your company.
KPI # 1: Employee absenteeism
Measuring the absenteeism rate can provide insights into how satisfied your employees are with their current situation.
A high absenteeism rate generally makes employees unhappy and may seek other opportunities.
Moreover, when your employee misses work, it makes it hard for other employees to do their job because they are burdened with more work. This makes them feel stressed and unhappy at work.
How to measure employee absenteeism?
Employee absenteeism is calculated using the following formula:
Absenteeism rate = (Number of absent days per employee) / (Total number of working days) x 100
How to improve employee absenteeism?
1. Identify the issue
Katie Stearns, Outreach Manager at BeeBole, suggests that instead of jumping right in controlling absenteeism at your workplace, take a step back and identify the issue.
“Are people calling in sick too often? What is too often? Could the issue stem from workload levels, management styles, or something specific to the office culture?” says Katie.
Answering these key questions will provide the context for addressing such a complex issue.
2. Put a process in place
The first thing is to keep track of what days the absentee has been absent, says Dave Crisp, former SVP of HR at Hudson’s Bay Company.
“When the absences exceed the average of others, it’s time to sit down with the record, show it to them, and ask them to explain why so often and totalling so much. That may produce a valid explanation, which you can discuss to fix it,” says Dave.
3. Stay positive
IAPPD America’s President, Scott J. Simmerman, suggests staying positive in such situations.
“Playing on the negative side of things will generally only worsen things. If you push, you can expect pushback. Build more teamwork and interdependence among the team so that you can increase the peer pressure to contribute,” says Scott.
KPI # 2: Employee turnover
The Employee Turnover Rate (ETR) is the percentage of employees who leave the company within a certain period.
A high turnover rate can be costly and detrimental to your business, so keeping track of it is essential.
According to William Powell, The Leadership Advisor, “Most of the time, highly engaged employees are less likely to leave voluntarily, so building an engaged workforce can help reduce your turnover rate.”
How to measure the turnover rate?
The employee turnover rate is measured using the following formula:
Turnover rate = (Number of employees who have left the company) / (Total number of employees at the beginning of the period) x 100.
How do you improve the employee turnover rate?
1. Audit your culture and career development plan
Jill Christensen, Employee Engagement Expert, suggests looking at your company culture and career development plan.
“According to a Job Seeker Nation Study, 32% of job seekers have left within three months due to company culture and other issues such as lack of career development, work-life balance, manager’s behaviour, comp and benefits,” says Jill.
“By auditing your culture and career development plan, you will identify issues you must focus on and improve,” Jill adds.
2. Supervisor-employee feedback
“In my opinion, bad bosses are the #1 reason employees leave,” says HR executive and consultant Darryl Clements.
Darryl added, “Addressing poor supervisor-employee relationships and feedback can resolve high turnover problems across many business environments. Because people will stay through hardships and tough times for bosses they like.”
3. Build a work environment aligned with employee priorities
Employee Engagement Expert Jill Christensen believes that a significant disconnect between your employees’ needs and managers’ thoughts is a big reason behind your staff quitting their jobs.
“Managers think employees want more money, development opportunities, and work-from-home options. On the other hand, workers want to be valued, have a sense of purpose, work with kind and loyal colleagues, and have a flexible schedule at work,” says Jill.
Creating a work environment and company culture based on employees’ priorities is crucial to staying ahead of the curve and retaining employees.
KPI # 3: Employee retention
Employee retention is the inverse of employee turnover. It is a metric that looks at employees who stay at your organisation, which indicates good engagement.
How to measure employee retention?
Employee retention is measured using the following formula:
Employee retention rate = (Total number of employees – Total number of employees who left) divided by total number of employees) x 100
How to improve the employee retention rate?
1. Recognise your employees
One key ingredient to improving employee retention rate is employee recognition, suggests Jill Christensen, Employee Engagement Expert.
Jill further cites a study by Psychometrics: When asked what leaders could do more to promote engagement, 58% of respondents replied, “Give employee recognition.”
“Now is the time to check your recognition program to guarantee it fits today’s realities: online, global, exciting, wide-ranging, and easy to use,” Jill says.
2. Exhibit a habit of trust
Executive Coach Jennifer Musselman accepts that trust has a domino effect.
Employees will work harder and get more productive when they trust management and the people who give them their assignments.
To create more trust among employees, Jill suggests “building personal connections, being honest and transparent, motivating your team members, giving credit, avoiding favouritism, and demonstrating competence in your work when leading a team.”
3. Encourage feedback
Jill Christensen suggests “conducting forums encouraging employees to be open, feel safe and talk about work situations and career development.”
Asking your employees for feedback implies that you value their opinions and trust them to have insights that could improve the company.
KPI # 4: Employee Net Promoter Score (eNPS)
“eNPS is a simple way for a company to get started with their employee engagement tracking”, says Jill Christensen.
It’s measured through an employee engagement survey. Respondents rate this on a scale of 1-10 using a survey template like this:
“How likely would you recommend the organisation as a workplace to others?”
The answer is broken down into 3 categories:
- Detractor: The one who answered 0 to 6
- Passive: The one who answered 6 to 8
- Promoters: The one who answered 9 or 10
eNPS formula
Employee NPS = (promoters – detractors)/ total respondents
According to Qualtarics, a good eNPS score is between 10 and 30.
Anything below 10 indicates some significant areas that need improvement. Employees’ net promoter score above 30 is outstanding.
KPI # 5. Employer review site rating
Review sites provide valuable insights for employers, not just from current employees but from those who have also left the company.
A recent study has found a positive correlation between a company’s Glassdoor rating and employee engagement. The study showed that the more reviews a company has, the stronger this correlation will likely be.
Such sites help you understand how to improve future employees’ work environment and engagement.
What are the mistakes to avoid when measuring your employee engagement?
Here are the most common mistakes you should avoid while measuring employee engagement:
- Don’t rely only on pulse surveys. Organise an annual employee engagement survey to get a big picture across the company.
- Don’t survey only a part of your employee population. When you leave out employees from your engagement surveys, it biases your results.
- Don’t make employees take endless surveys about their feelings about work. This acts as counterproductive for employee engagement.
- Don’t focus on quantitative results only. Track the data and qualitative feedback (comments) and use them together to improve your engagement strategy.
- Don’t just collect the feedback. Act on it to improve your employee engagement.
Measuring employee engagement boosts your employees’ productivity levels.
Tracking metrics, as recommended by the experts, and conducting surveys can help you measure and improve employee engagement.
However, combining the right tools with these metrics and surveys can accelerate the improvement of your employee engagement.
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A team communication app like Talk Magnet can keep your employees engaged through effective communication and collaboration.
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