7 Employee Engagement Metrics to Track for a Productive Workforce
Discover what employee engagement metrics you need to track to understand employee satisfaction to prevent performance dips and attrition.
Employee engagement can boost productivity, lower attrition, and create a better experience for everyone in the company. While research shows engagement levels are steadily increasing, there's still significant room for improvement as employees and employers continue to navigate post-pandemic changes to the workplace like hybrid work and return to the office (RTO) policies.
On its own, engagement can be hard to measure as it has a high degree of subjectivity. That’s where metrics come in. They offer an objective, data-informed way to analyze engagement, showing which strategies are working and which could be improved. Here’s everything you need to know to successfully track employee engagement metrics.
What are employee engagement metrics?
Employee engagement metrics are quantitative and qualitative measures that show how connected, involved, and satisfied an employee is at their job. The metrics gauge both how connected people are to their roles and how well they align with the company’s values.
Why measuring employee engagement metrics is important
Knowing the engagement levels in your company helps you understand how people feel in their roles. Employees who are dissatisfied with their job will start performing worse and sooner or later, will leave.
By measuring engagement metrics, you can stay one step ahead, seeing when such issues arise and taking steps to correct them. On top of these, a Gallup study brings some eye-opening statistics related to engagement:
Absenteeism levels of engaged teams are up to 81% lower than non-engaged ones.
Companies where employees score better in engagement are 18% more productive.
Teams with low employee engagement typically endure turnover rates that are 18% to 43% higher than highly engaged teams.
How do you measure employee engagement?
Some metrics are easy to measure. You look at numbers, compare them, and get your results. Employee engagement metrics aren't as straightforward. But there are a few techniques you can use to get accurate results:
Use surveys. They may be subjective and sometimes unreliable, but they are a good starting point. By getting your employees’ thoughts, you’ll get an idea of how they feel about their work and the company. Don’t rely solely on surveys, though, when making important decisions.
Check the net promoter score (NPS). The NPS shows you how likely a person is to recommend the company as a workplace to a friend. It is more common when measuring customer satisfaction, but you can just as easily use it for employee engagement. Like surveys, it is subjective, so use it alongside other metrics, like retention or absenteeism.
Track and measure HR metrics. Keep an eye on HR metrics like absenteeism, voluntary turnover, performance, and employee satisfaction to understand how engaged your employees are and spot trends that might signal a change in engagement.
7 metrics to measure employee engagement
Measuring employee engagement metrics is critical to having a productive and happy workforce. Here are some of the most important ones to track:
1. Absenteeism
A high absenteeism rate is often the first sign something is wrong in the company. It occurs when people no longer see the value of putting in the work, are overworked, or are simply unhappy with the company and their jobs. Plus, high absenteeism usually precedes voluntary turnover.
While several things could make people miss work, low engagement is one of the possible causes. It can also lead to issues for the other employees, as they’ll suddenly have more work on their hands.
2. Retention
Retention and engagement often go hand in hand. Retention is a critical component of productivity and performance. High turnover is a clear sign something is wrong within the company. Perhaps there’s a lack of diversity, no opportunities to learn new things, or engagement is low. When employees, especially top performers, choose to stay for a long time, it signals good engagement and satisfaction. Plus, high retention cuts down on costs that would otherwise be used to replace those who leave.
3. Employee NPS
The employee net promoter score is one of the simplest ways to measure engagement and satisfaction. You’ll need to start by asking employees a simple question: “What is your likelihood, on a scale of 1 to 10, to recommend this company as a workplace?”
People who give a 9 or 10 are promoters. They’re the happiest with their job and the company, and usually the most engaged ones.
Those who score 7 or 8 are passive. They’re not unhappy with the job, but they’re not extremely excited either. They might not recommend the company, but won’t say anything bad about it.
Finally, those who score 6 or lower are the detractors. They’re unhappy with the company, disengaged, and will probably leave at the first chance.
4. Employee performance
Engaged employees are more productive and perform better. Unlike previous metrics, there’s no single formula to calculate employee performance. You’ll need to look at various factors, such as:
The number of errors per employee
Revenue per employee
Human capital ROI (return on investment)
Number of sales
360-degree feedback
For instance, the number of errors per employee can indicate a lack of focus, motivation, or satisfaction. The revenue per employee is a good way to see how productive employees are. A higher number will indicate good productivity and good engagement. Similarly, a high number of sales can indicate employees are customer-focused and more satisfied with their work.
5. Workload balance
An employee’s workload is something that can make or break their engagement and satisfaction with a job. When a person constantly has too much on their plate, they will start feeling frustrated, and exhausted, and may even experience burnout.
Tracking each employee’s workload helps you see who is at risk of overwork, and who has additional bandwidth. You can ensure engagement and productivity won’t suffer due to poor workload balance, improving people’s quality of work.
6. Customer satisfaction
Customer experiences are closely related to your employees. Engaged employees who are happy with their jobs will almost always provide a better customer experience. They’ll perform better and be more dedicated to ensuring the customer gets the best possible services.
While this metric can tell you a lot about your employees, it is highly subjective, so you should always look at it alongside other engagement metrics.
7. ROI on employee engagement
Reading statistics on employee engagement from various studies can be a powerful motivator. But nothing will motivate you more than understanding the direct impact engagement has on your company.
Measuring the ROI on employee engagement will show you the real value this component has for your organization. For instance, a Gallup study found that companies with high engagement rates saw an increase of 20% in sales. Seeing the numbers add up in your organization will provide a good motivator and help you work on your engagement strategies.
There isn’t a one-size-fits-all when calculating ROI on engagement. It depends on which metrics you use and other KPIs you analyze. You can look at turnover rates, performance metrics, or other indicators to help you understand your ROI.
Using people analytics to measure employee engagement
To track engagement, you need to carefully analyze metrics, conduct surveys, pay attention to what people are saying, and how they behave. You also need to balance subjective components, like surveys and NPS with a more data-driven, objective approach.
People analytics can offer a straightforward way to achieve that balance. It can take your daily people data and transform it into valuable insights that can help you make data-driven decisions. Visier People® is designed to answer all your critical questions so that you can achieve your goals effortlessly.
The platform will give you a better understanding of what motivates your employees and what helps them be more engaged, perform better, and stay with the company longer. It is easy to set up and there are no complicated queries to run. This way, you can start using it right away and get all the answers you need.
Empower people managers to see how engaged their teams are compared to the engagement trends of other organizations in the business.
On the Outsmart blog, we write about workforce-related topics like what makes a good manager, how to reduce employee turnover, and reskilling employees. We also report on trending topics like ESG and EU CSRD requirements and preparing for a recession, and advise on HR best practices like how to create a strategic compensation strategy, metrics every CHRO should track, and connecting people data to business data. But if you really want to know the bread and butter of Visier, read our post about the benefits of people analytics.
