“I don’t consider that high employee engagement drives productivity or customer satisfaction.”

Said no manager ever.

Instead, companies agree that employee engagement has a big impact on performance. That it’s crucial And spend a huge share of their budgets in an effort to improve it.

But what is “employee engagement” more exactly? Is improving employee engagement all about boosting productivity? Does “personal satisfaction” stand for employee engagement?

John might be very satisfied with his manager and still not give his best on his work.

And how do you measure employee engagement? What employee engagement metrics should you use to get an accurate big picture of where your company is falling short? Is the typical annual engagement survey, where employees rate their own levels of engagement, enough?

Does it provide you with enough 100% objective data to look into?

Let’s get you some answers…

TL;DR:

• Employee engagement metrics help measure and understand engagement levels in a actionable way.
• Engaged employees impact business operations, profitability, customer service/satisfaction, productivity, and adoption of company initiatives.
• Key employee engagement KPIs include Employee Net Promoter Score, Turnover Rate/Retention, Customer Net Promoter Score, Employee Resilience, and Average Productivity.
• Employers should take a proactive approach to measure engagement and define desired impact before collecting data.
• Best practices for measuring engagement include engagement surveys, pulse surveys, and regular check-ins.
• Avoid common mistakes such as relying on culture/satisfaction surveys, surveying only a sample of employees, and not complementing pulse surveys with annual surveys.
• Employee engagement measurement should be part of a complete toolkit for improving engagement.
• Focus on a mix of quantitative and qualitative results, pairing data with open feedback from employees.
• Key metrics to focus on include employee net promoter score, work-life balance, new hire engagement rate, turnover rate, satisfaction with compensation, workplace relationships, and employee resilience.

What Are Employee Engagement Metrics?

Employee engagement metrics are employers’ tools for measuring how engaged their employees are.

And good engagement metrics are those that help you assess the actual levels of engagement. Not just the self-perceived ones.

With such data at hand you can:

• detect, in due time, declining levels of engagement in the case of particular employees

• identify the causes of these drops (or rises): what drives engagement among your workers

• identify the gaps that need to be filled

• design the most suitable interventions for influencing your employees’ levels of engagement

In short, employee engagement metrics are people analytics metrics that help you measure and understand your employees’ level of engagement in an actionable manner. 

Why Is Employee Engagement Important?

Because it drives performance and retention.

As simple as that.

When employees:

• are driven by the work they do (not to say “passionate” about their work)
• trust in the company’s leadership
• have a sense of purpose and belonging in the company
• are in good relations with their supervisors

… it impacts the business operations and overall profitability.

And speaking of benefits, here are some of the most valuable ones:

• Better customer service, better customer satisfaction
• Employees turn into your company’s more valuable advocates
• Increased employee productivity
• A higher adoption rate of the company’s initiatives

How to Define Employee Engagement KPIs

Now you know the benefits of having engaged employees. But how do you know that your company’s on the safe side of statistics? So you can be sure to “reap” these benefits?

You start using quantifiable data to measure employee engagement across your organization.

But things aren’t as straightforward as they would be in the case of measuring your other business units. Like marketing or production.

So, what data should you use to measure employee engagement?

And benefits are the answer.

More precisely, since you already know that employee engagement impacts productivity and loyalty, this is where your industry's performance KPI can give you the benchmark for a more effective analysis.

So, what are your company’s main performance indicators?

With those in mind, here are the employee engagement KPIs  you’ll want to monitor regularly:

Employee Net Promoter Score (NPS)

NPS is one of the critical employee engagement metrics you’ll want to track regularly.

“How likely would you recommend company X to a friend or a family member as a place to work?”

This is the ultimate question that’ll help you gain the insight you need to… anticipate and reduce the rates and costs of turnover.

How likely is it for your employees to turn into your company’s promoters?

Do you need to strengthen your employer's brand strategy

Turnover Rate/Retention

Who are the employees who quit your company?

Are you losing “A players” — high-performing employees who’ve been in the organization for a long time?

This is the most valuable indicator that you need to rethink your engagement strategies.

Otherwise, the cost of turnover will be significant: lower efficiency and huge holes in the budget caused by all those costs of hiring and training new people.

Customer Net Promoter Score

Is the score low? A decreasing employee engagement level might be the cause.

There’s a cause-and-effect relationship between employee satisfaction and the quality of customer experiences.

Employee Resilience

A low employee resilience score is another one of the crucial employee engagement KPIs you’ll want to measure.

And an indicator that certain employees are at risk of leaving the company: they’re not apt to adapt (quickly enough) to and manage an environment that changes frequently.

To adopt and cope with new and new initiatives that are being implemented regularly across your organization.

And the main indicators you’ll need to track to assess the level of employee resilience are social support, self-efficiency, and optimism about the organization’s future.

Employees planning to stay with the company for more than 1-2 years are usually more resilient than those who consider the possibility of leaving in less than 1 year.

Average Productivity

Slowdowns in production or in sales (or lower performance) can be traced back to a decreasing level of employee engagement.

A disengaged workforce is a less productive workforce.

What Is the Best Way to Measure Employee Engagement?

First of all, go for a proactive approach to measuring employee engagement. Identify issues before (key) employees start to leave and problems scale up to the entire organization.

Secondly, start with the end: define the desired impact of your survey and work from there. Backward.

• Who’ll be in charge of following up on the results of your employee engagement surveys?
• Who will take action based on the data you will have collected?
• What kind of “action”? What will an intervention look like?

The answers to these questions will help you put together a more well-defined approach.

And here are 3 key methods you’ll want to incorporate into your employee engagement strategy:

Run Engagement Surveys Twice a Year (And Pulse Surveys In-Between)

Why this “combo” when traditionally companies would conduct (just) one engagement survey per year? The annual survey?

Because that’s no longer enough. With workplaces becoming increasingly dynamic, you’ll want to monitor those fluctuating levels of employee engagement. And measure engagement constantly.

In this case, biannual employee engagement surveys provide you with the benchmark you need to determine what new tactics to implement for increasing engagement.

While frequent pulse surveys help you:

• Get a real-time and holistic view of your employees’ level of engagement

• Track progress in their levels of engagement

• Compare results to those you get from your biannual surveys

• Identify micro trends happening at key points throughout the year (e.g. maybe the engagement level is higher after the annual team building)

Tips to consider when running pulse surveys:

• Ask specific questions during your pulse surveys, that help you identify the drivers of engagement

• Be ready to intervene, with concrete actions, based on the feedback you get from your employees

Monitor Peer-to-Peer Interactions

A very productive employee who isn’t actively interacting with his teammates can be a disengaged employee.

You’ll want to monitor the state of connectedness in your workplace. Are your employees:

• ready to help their colleagues when needed?

• respectful to their peers?

• team players?

• sharing their ideas in real-time?

• sharing feedback and recognition for their peers?

• ready to share their knowledge and resources with the rest of the team?

• inclusive and accepting?

• ready to intervene, when needed; to advance with various key projects?

Knowing what’s going on between employees will help you:

• anticipate who’s at risk of becoming disengaged

• detect opportunities to better motivate the teams and each individual

Pro Tip! Don’t rely solely on historical data, but use AI to track the level of connectedness at your workplace. It’ll help you identify the impact of various workplace factors (e.g. performance review periods) on your employees’ level of engagement.

Have Regular 1:1s 

Informal 1:1s with your employees is another effective way to measure employee engagement.

Why? Because:

• they’re in-person: employees feel more confidential and safer, so you get more detailed feedback on various aspects influencing their level of engagement

• they’re usually longer (hour-long), so employees have more time at their disposal to open up to you so you can get a real sense of what’s going on with them

Things To Avoid When Measuring Employee Engagement

As you’re putting together the best employee engagement measurement strategy, it’s equally important to know which are the “wrong ways” to measure employee engagement.

Here’s a  list of “don’ts” to consider:

Don’t Stick to Companies Culture Surveys

Or “satisfaction” surveys.

But if you do want to stick to your culture surveys, make sure they contain the essential employee engagement metrics.

And don’t do it like too many organizations do, that run satisfaction surveys that lack these key metrics. That is merely measuring employees’... opinions on issues with too little impact on their engagement.

Don’t Survey Just a Sample of “X” Employees

You’ll only compromise your survey results.

A thoughtful employee engagement measurement strategy should include surveys run on ALL the employees.

For, not only will you get inaccurate results, but by surveying just a selection of them you communicate to them that your company doesn’t care equally about all of its employees.

Don’t Rely on Pulse Surveys Only

You’ll want to pair them with annual (or bi-annual) surveys instead.

Why? Because:

• pulse surveys will only get you lightweight, real-time feedback on specific topics.

• whereas annual surveys help you track key trends over time; help you see the bigger picture.

Frequent pulse surveys are valuable, there’s no denying it. They’re quicker and help you measure your employees’ levels of adaptability in real-time.

But you shouldn’t turn them into the foundation of your employee engagement measurement strategy.

Make sure you always complement them with annual surveys. They’re the ones helping you identify bigger trends over larger periods of time.

Don’t Rely on Surveys Alone

Instead, you’ll want to have a complete “toolkit” for improving employee engagement.

In other words, don’t stop at the measurement part: surveys alone won’t improve employee engagement.

It’s the follow-up actions your managers will take (after the surveying and data analysis part) that will help you improve engagement across the organization.

The tech they start using to encourage those specific habits that drive engagement.

Don’t Go for Quantitative Results Only 

Instead, pair them with qualitative feedback. With open-ended comments.

For running an engagement survey is also about collecting opinions. Not just about collecting data, analyzing HR KPIs for employee engagement, and determining “a final score”.

Pair the collected data with employees’ open feedback about various topics and issues and you’ll get a clearer picture of the next steps to take for improving engagement across your company.

Employee Engagement Metrics Every HR Manager Should Watch

Now that we’ve cleared the “don'ts” out of our way, your key question remains: “How to measure employee engagement… the right way?”

So you can detect issues and intervene with smart workforce management decisions early enough.

What are the key engagement metrics that you should focus on? Metrics that’ll help you collect relevant data only?

Here are the top 10 employee metrics you’ll want to track regularly:

1. Employee Net Promoter Score

This metric — expressed as a score (or percentage) — will help you assess employee satisfaction and commitment to the company.

And it’s a great indication of:

• how likely it is for your employees to recommend your organization to their peers.

• how likely it’ll be for you to get a cultural-fit hiring thanks to these valuable referrals

2. Work-Life Balance

This metric measures employees’ levels of prioritizing work and personal activities.

It’ll also help you assess to what degree activities related to their job are present in their after-work lives, too.

Stressed-out employees, who can’t strike a work-life balance, stand a higher chance to get disengaged. And less productive, more likely to make mistakes.

It may not be the easiest metric to measure — you can even ask employees themselves — but it sure is worth the effort. This way, you'll know what are the best workplace practices to implement to help them achieve a better balance.

3. New Hire Engagement Rate

A metric that measures new hires’ job/position satisfaction.

Stats show that 20% of newly hired employees leave their job within the first 45 days. And 40% of them within their first 6 months with a company.

This makes it one of the critical employee engagement metrics you’ll want to track by running new hire surveys within their first month, 2, and 3 months.

4. Employee Turnover Rate (ETR)

It’ll help you assess the company’s probability to retain its employees. And how long they remain in the company.

You’ll want to detect those factors that impact retention decisions and rely on them to predict employee retention scores.

Pro Tip! You’ll get some really valuable insights tracking new hires’ levels of satisfaction. The number of people that remain in the company long after their probation period is a great indicator of how effective your onboarding process is.

5. Employee Satisfaction with Compensation

How satisfied are the employees in your company with their compensation compared to the current market rate?

It’s one of those valuable employee satisfaction metrics that’ll help you detect, in due time,  signs that they might want to leave the company for better offers.

6. Workplace Relationships

Meaningful workplace relationships have a significant influence on employees’ levels of engagement.

It’s something you’ll want to monitor, regularly: 

• How frequently do they communicate with management?

• Are employees developing positive professional relations with their co-workers?‍

7. Employee Resilience

A high employee resilience score indicates:

• Enthusiasm for the company’s future

• Self-esteem

• Optimism

• Reliance on support

• Adaptability

A company’s success depends on how its employees respond to problems. On how they interpret “problems” and how quick they are to adapt to changing environments.

To the new initiatives that are being implemented across the organization.

8. Employee Satisfaction with Leadership

Measuring employees’ level of satisfaction with management will help you predict retention, engagement, and performance scores.

And to identify those managers who set themselves apart as true “leaders”. Who manage to retain people around them and within the company.

9. Workplace Recognition

Employees who get acknowledged for their results, for going the extra mile, get more engaged with the company.

And more motivated to continue to do their best work when involved in future projects, too.

This is what makes workplace recognition one of the employee engagement metrics that’ll help you assess how productive and engaged people in your company are.

And to measure how effective your rewards programs and employee recognition efforts are.

How do you measure workplace recognition? You use levels of productivity, employee retention probability score, and company turnover as baselines to compare your collected data to.

10. Autonomy

Micromanagement and employees’ sense that they lack control over their own tasks kill employee engagement.

Whereas employees who feel they’re given enough autonomy at work are more likely to develop resilience and self-reliance. To feel more trusted and competent in their roles.

But how can you measure employee autonomy?

You ask managers key questions like:

“How free do you feel about making your own choices in your role? About managing your own time and responsibilities?”

Or you come up with specific opportunities for them to take leadership over certain tasks (e.g. a monthly meeting) and keep track of their performance.

With this list of key employee engagement metrics at hand, measuring your employees’ job satisfaction, their wellbeing, their sense of commitment to the company, and connectedness to their colleagues gets more precise. More strategic.

Just curious now: which 3 engagement metrics are the most important for your organization?