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People Management

6 Employee Engagement Metrics High-Performing HR Teams Measure

April 12, 2022
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6 mins

Engaged employees perform better. The best HR teams measure these six metrics to understand and improve employee engagement.

Lawrence Barker
Engaged employees perform better. The best HR teams measure these six metrics to understand and improve employee engagement.

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Are your employees engaged? 

If employee engagement isn’t a top goal for your HR team, it probably should be.

Employee engagement has a significant impact on important business metrics like productivity, employee retention, and profitability. Yet despite all the data pointing to the importance of employee engagement, research shows that only 15% of global workers are engaged.

We highlight six employee engagement metrics that high-performing HR teams measure to answer that question, along with some tips on how to improve each one.

Employee Net Promoter Score (eNPS)


Your employee Net Promoter Score measures how your employees feel about your company. The underlying thought is that if an employee would recommend working at your company, they must enjoy their work and be engaged. eNPS relies on one simple question: “On a scale of 1-10, how likely are you to recommend [your company] as a place to work for your family and friends?” 

Employees are split into three groups based on the number they select:

  • Promoters (9-10) are your most satisfied and engaged employees.
  • Passives (7-8) are neutral. They may be content in their roles, but not fully engaged or committed to your company.
  • Detractors (0-6) are unhappy and disengaged. 

You calculate your eNPS by subtracting the percentage of detractors from the percentage of promoters (ignoring the passives). Then, drop the percentage symbol for your score. A score between 0 and 30 is considered good, but what’s most important is that you are tracking how you compare over time. If your eNPS score is growing, your staff is becoming more satisfied and engaged.

Many companies follow up the core eNPS question with an open-ended question—like “Why did you choose that option?” — as a way to gather more actionable insights from their workforce.

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How to improve eNPS


eNPS surveys can give you insight into your current engagement, but you’ll need to work with your employees to understand how to improve. Some tips to improve eNPS include:

  • Ask your employees for input on what they value and what would make their work experience better (and then take action).
  • Make a tailored plan to help each group based on feedback. It’s often easier to move a passive into a promoter than it is to convert a detractor, so you may find it easier to start there.
  • Be transparent about your current eNPS and changes to it over time. Your people want to know that you’re listening and you’re invested in their well-being

Employee retention rate


Your employees won’t stick around if they’re not engaged. Employee retention rate measures how long people stay employed at your company. There are two ways to look at employee retention in relation to engagement:

  • Overall employee retention rate. This is the overall measure of how well you’re retaining employees. It’s a useful gauge because it accounts for all reasons employees might leave your organization. It’s best to calculate the retention rate on a monthly or quarterly basis. Divide the number of employees at the end of the time period by the number of employees at the start of the period, then multiply by 100 to get a percentage. 
  • Voluntary turnover rate. Voluntary turnover is when a team member leaves their job voluntarily. This may mean they found a new job, retired, or just quit. Voluntary turnover is particularly important to track in regards to engagement because an increase in people voluntarily leaving your organization is likely a sign of low engagement. You can calculate the voluntary turnover rate by dividing the number of employees who left voluntarily during a period by the number of employees who started the period. 

How to improve employee retention


Retention is a complex issue because the reasons employees leave a job vary widely. However, there are a number of common actions you can take to help retain your employees:

Absenteeism


Disengaged employees aren’t excited about their jobs, so it makes sense that they often have higher rates of absenteeism. Employees can and should take time off and use PTO to avoid burnout, but absenteeism is about measuring unexpected absences. 

You can calculate your absence rate for an employee by dividing the number of days they were absent during a time period by the number of days they were scheduled to work in that period. For instance, if Helen was absent 5 days this quarter but was scheduled to work for 60 days, then her absence rate would be: (5/60)*100 = 8.33%.

High absenteeism can signal low engagement, but low absenteeism doesn’t necessarily mean your team is engaged. Presenteeism—when an employee is working, but not at full capacity due to illness, disengagement, or other factors—may cost businesses as much as 10 times more than absenteeism.

How to improve absenteeism


Life happens. Every employee will occasionally be absent, but how can you reduce the frequency of unplanned absences and limit the impact on your business? Start with these tips:|

  • Find ways to reduce stress in the workplace. The fixes will vary from role to role, but a stressful work environment is a prime reason for absenteeism. 
  • Offer more flexibility. Whether it’s remote work, flexible hours, or an improved PTO policy, adding flexibility to your policies will enable employees to better work around other aspects of their lives and reduce absenteeism.  

Employee morale


Morale can feel like a nebulous thing. It’s about how your employees are feeling, what their outlook is, and how satisfied they are with their work. Many factors can impact morale, which is why it can be difficult to measure. But when members of your team are struggling with low morale, you can bet they aren’t engaged and they aren’t performing at their best. 

How to improve employee morale


The best way to track and improve employee morale is to keep a close eye on it. Taking your team’s morale ‘pulse’ every day enables you to quickly understand when people are feeling off. 

That’s one of the reasons why we built Kona, a Slack integration that checks in on your team every day. It enables you to understand how they’re feeling, builds camaraderie across your team, and gives you real-time insights into where you can provide support. 

Employee referral rate

eNPS (covered above) asks how likely your employees are to refer friends and family to work for you. That’s hypothetical. Measuring employee referral rate moves you out of the hypothetical into reality. If your team is disengaged, they’re probably not going to refer people they know to join your company.

There are several metrics you can use to measure the success of your employee referral program, including referral to hire rate, tenure of referrals, and average time to fill referrals. You can check your current rates against referral benchmarks to understand how you’re performing. If your numbers are lower than average, it’s a sign you need to improve your referral program and do some engagement work.

How to improve employee referral rate

  • Work on improving your company culture. Your current employees know your culture best, and if they aren’t referring people it may be a sign of an unhealthy culture. 
  • Create a structured referral program. Tools like ERIN make building out a smooth referral program simple. Applicant tracking systems like Greenhouse or Lever often have referral capabilities built-in. 
  • Incentivize referrals with bonuses or other rewards. Let’s be clear: incentives won’t be enough to induce referrals to a bad workplace. But if your culture is strong, incentives may give your team the push they need to start referring friends to your open roles. 

Performance metrics

One of the reasons employee engagement is so vital is that it has a direct impact on productivity and performance. A seriously disengaged employee is never going to produce the same results as a highly engaged employee. 

Your performance metrics are unique to your business and to each team, but tracking how they trend over time is an important employee engagement metric. If a team’s performance—quality, efficiency, goal achievement, etc.—suddenly starts to trend downwards, there’s a reason for it. That reason is frequently tied to employee engagement. 

How to improve performance metrics

We can’t—and shouldn’t—tell you how to run your business. You know how to do that better than us. But we will suggest that you treat poor performance metrics as a warning sign that you might have engagement issues.

Engagement is often overlooked as a reason for poor performance. We’re quick to blame things like external factors, bad planning, or poor management. Those things can certainly play a role in a failure to perform, but a sign of a highly engaged team is that they’re often able to overcome barriers and adjust to obstacles.

If your team is struggling to achieve their goals, poor engagement might just be the culprit.


Measure and act


High-performing HR teams know that without the right data it’s hard to prescribe the right course of action. Start by picking a few of these metrics and tracking them over time. As opportunities become obvious, take thoughtful action to improve your employee engagement. 

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Meet the Author

Lawrence Barker

Lawrence uses his decade of customer experience leadership to create content for B2B SaaS companies that love their customers. He writes on a broad range of topics, all with the aim of helping human-centered companies attract the right customers and empower them to be successful.

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