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How to Measure Employee Engagement

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Employee engagement and positive workplace culture are critical to a company’s success.

However, while business leaders in all industries at least somewhat understand the concept of employee engagement, not everyone knows how to go about measuring employee engagement.

Top employers focus on creating and fostering positive culture habits that help connect people to a common purpose—but they also need to measure the effects of such practices. Sure, you can witness the results, but by tracking the right metrics, you can duplicate the process and ensure ongoing positive engagement.

Let’s explore employee engagement and the best employee engagement metrics.

What is Employee Engagement?

According to Gallup, employee engagement is the “involvement and enthusiasm of employees in their work and workplace.” It helps you understand employees’ perspectives on the crucial elements of your workplace and its culture.

Engaged employees feel good about their daily tasks and ongoing projects. They actively participate in the workplace. Disengaged employees, however, are simply going through the motions without connecting to their activities.

Key Benefits of Employee Engagement

To understand the importance of measuring employee engagement, first you need to understand the importance of engaged employees. Here are the primary benefits.

Reduced Employee Turnover

When employees aren’t engaged and lose interest in their work and care for their workplace, they are likely to seek a job with another company. Focusing on enhancing employee engagement can prevent a costly hiring process to replace employees who resign.

Less Employee Stress

Employees who don’t feel engaged tend to feel more stress, and stress decreases employee engagement. You can see the vicious cycle forming. Since stress costs American companies more than $300 billion per year, it is worth it to focus on employee engagement metrics.

More Productivity

Feeling engaged boosts positive energy. Therefore, engaged employees tend to put more effort into their work. An August 2020 Gallup article noted that engaged workforces are 17 percent more productive, which frequently leads to higher profitability and longevity of the company.

Improved Customer Experience

Your customers are the point of what you and your employees do daily. When your employees feel engaged and aligned with your company’s mission, as well as supported, they are more likely to provide customer service.

Increased Loyalty to Your Company and Brand

The more engaged and included employees feel in your company, the more likely they are to serve as ambassadors of your brand, on duty and off duty. They might sing your praises on social media or casually represent you in the best light in any situation.

Why are Employee Engagement Measurements So Important?

It’s important to understand how your employees feel about their work and your company. These individuals make decisions and do things daily that can affect your workforce and the rest of the company.

If you take the time to measure and evaluate employee engagement, you can identify negative trends and work to change them. By getting ahead of negativity, you can improve employee retention.

The way you and your leadership team treat your employees, as well as the way they treat each other, can make a positive and often speedy impact on employee attitudes, behaviors, and actions. However, left unchecked, poor employee engagement can place your employees, company, and reputation at risk.

Employee engagement metrics can also help you determine the effectiveness of your human resources (HR) team and your team-building activities. By tracking these metrics over time, you can determine which tactics improve engagement—and which ones don’t work.

Overall, employee engagement measurements and their analysis provide insights into improving your employees’ connection to their job, their work, and your business.

How to Measure Employee Engagement Using 7 Key Metrics

In today’s unpredictable workforce, identifying engaged and unengaged employees is crucial to company and employee success.

By tracking the following employee engagement metrics, you will have a better idea of overall employee engagement.

1. Turnover Rate

A company’s turnover rate reveals its ability to retain key employees by measuring the duration of each employee’s tenure.

2. Workload Balance

No one wants to feel overloaded. When employees are required to work long hours to meet deadlines, or they’re taking on more responsibilities without additional compensation, their motivation drops. Keep an eye on employee workloads. If they’re regularly stretched thin, it might be time to bring on new workers.

3. Employee Net Promoter Score (ENPS)

While the first two metrics might seem familiar, this one might be new to you. The eNPS was inspired by the net promoter score (NPS), measuring the popularity of products and services. The eNPS works similarly, but it focuses on employees and their feelings about their workplace. It measures how likely employees are to recommend their current workplace and company. This metric is quick, simple, and provides vital information.

4. Employee Absenteeism Rates

You can glean a lot of information when you look at absenteeism rates, especially those that form a chronic, negative pattern. While it’s important to be flexible with sick leave or other personal leave, frequent and widespread absences can indicate disengaged employees. When absenteeism becomes a trend, it can lead to a team-wide downward spiral.

5. Internal Promotion Rate

The opportunity for professional growth, including promotions and raises, is a prime driver for employee engagement in a company. Your willingness to nurture talent from within can pay off with highly engaged employees. This ensures better employee retention, especially of top performers.

6. Employee Satisfaction

While employee satisfaction and employee engagement aren’t totally unrelated, they do have their distinct differences. Satisfaction expands beyond engagement to include factors like employees’ feelings about things like benefits, salary, and overall working conditions.

Here are some questions you might include when trying to understand employee satisfaction as a metric:

  • Do you feel like your job is allowing you to use your most valued skills?
  • Do you feel valued in your position?
  • Do you feel like you get the recognition you deserve?
  • Do you have a good relationship with your manager and co-workers?
  • Are you happy with your salary?
  • Do you feel like the company cares about your overall well-being?

7. Customer Satisfaction

When employees experience low engagement rates, it often trickles down to their interactions with customers. While employees won’t necessarily have an overtly negative interaction with customers, they might not present an engaged and enthusiastic face for their company.

Work with Compass to Measure Engagement

Do you feel like you are using the right tools to measure employee engagement? If you need guidance, our culture consulting and leadership team can help. We offer in-person and virtual courses that can help you create a positive company culture that fuels employee engagement and delivers the best results.