Last updated December 23, 2020

How to measure employee engagement (steps & metrics)

Now that you’ve learned what employee engagement is, defined an employee engagement strategy, and looked at some employee engagement examples, how do you know whether your employment engagement strategy worked?

In this section of our employee engagement guide, we’ll share some tips on how to measure employee engagement. 

How to measure employee engagement

Why is employee engagement important?

If you’ve made it this far, you probably are well aware of the general benefits of employee engagement. Since today, we’re talking numbers and how to measure employee engagement, we think it’s reasonable to introduce this topic with some key data.

So why is it important?

But even with the best intentions, you need to know how to measure employee engagement.

“Without a sense of purpose, no company, either public or private, can achieve its full potential.” Larry Fink, BlackRock CEO

Why you need to measure employee engagement

It’s not enough to just launch some employee engagement strategies and hope it works. Yes, engagement is based on emotion, which is subjective and may seem hard to measure. But data on engagement can be both qualitative (e.g. asking employees how they feel) and quantitative (e.g. measuring turnover rates). 

You can’t manage what you don’t measure, at least that’s how the saying goes. And we believe that not only is this saying true, but that you can and should measure employee engagement. 

Here’s how to measure employee engagement:

Ways to measure employee engagement

There are many ways to measure how your employee engagement strategy is performing. We’ll list 7 options below and then move on to the engagement metrics you can measure within them.

1. Start by defining a goal for why you want to measure employee engagement

Why do you want to improve employee engagement?

Before you decide to start measuring engagement, you should know what you hope will happen when you have better engagement for employees. Ideally, you’ll have set these goals before starting your strategy or action plan. But let’s revisit them now.

As an example, some goals of a more engaged employee might be to:

  • Increase employee productivity
  • Become an “employer of choice” in your industry (receive better talent)
  • Improve customer satisfaction
  • Reduce turnover and absenteeism
  • Increase shareholder value

Figure out which goal most resonates with you. Use those to see whether your strategy for the engagement of employees is going in the right direction.

2. Annual engagement surveys

With the fast-paced, quarter-by-quarter world we live in today, a year may feel like a long time to measure how employees feel. But, it’s still widely used in the world of employee engagement. 

While we recommend using more frequent surveys (like pulse surveys, explained in the next point) for overall engagement, we still believe that a well-designed and properly administered engagement survey can provide valuable insights for measuring employee engagement.

2. Use pulse surveys

A pulse survey, performed weekly or monthly, is a kind of engagement survey used to gauge engagement levels and track more subtle changes over time. It’s also a good way to get employee feedback and show that their feedback is important to the organisation.

Most employee engagement tools, like Alaya, will provide you with pulse surveys you can use for measuring employee engagement more frequently.

3. Use one-on-one conversations

This isn’t innovative: talk directly to your employees.

If your organisation is small enough, we recommend regularly organising meetings with your employees where you can directly ask them how they feel about their jobs.

The informal and face-to-face setting not only makes it easier for employees to open up, but it shows that you care and helps them build a stronger connection with your company’s leadership.

4. Work with an employee engagement tool or partner

As you saw in other parts of our guide to employee engagement, strong strategies require the harmonised use of different tools and data tracking dashboards. 

If you work with one specific tool or partner that’s made for increasing employee engagement, it’s easier to not only launch the strategies but also to track and analyse their performance over time.

5. Track employment engagement metrics

Don’t do all of the above without tracking your numbers.

If you’re using qualitative data (conversations, open-ended questions), you can still track performance and improvement. You can categorise answers into different sentiments or use other coding methods to find patterns.

If you’re using quantitative data, then it’s pretty self-evident. Let’s dive into what metrics are most important for employee engagement.

What employee engagement metrics should you measure?

How to measure employee engagement

Once you know how you’re going to measure employee engagement, it’s time to choose what to measure. Your metrics will depend on the metrics you set above. Here are some of the metrics that are best for determining the success of your employee engagement program:

Absenteeism rate

This is the most obvious metric: how often do employees show up and do the work? Or fail to do so?

While things there may not be a physical office in the new normal of remote working, employees still need to “show up” online.

On average, the absenteeism rate is benchmarked at 2.8% across industries

Employee turnover

How many employees leave your organisation to be replaced by new ones? There are many causes for employee turnover, but they all point to unhappy employees. Research says the average benchmark is an annual employee turnover rate of 15%, though this number varies by industry.

Employee net promoter score (ePNS) / ambassadorship

This is asking one simple question:

“On a scale from 1-10, how likely is it that you would recommend working at our company to a friend or colleague?”

How many of them toot your company’s horn? Do they love working there enough to actually go out and tell people about how good their jobs are? The benchmark for this is 14, calculated as 42% of employees, on average, answer with a 9 or 10. 28% of them answer with a 6 or below.

Average employee engagement metric benchmarks

Turnover rate
3%-18%
Absenteeism
2.8%
eNPS
14

Sources:

These metrics are an excellent place to start getting clear and actionable insights on where you need to improve. If they look bad, some best practices are we recommend are:

  • Be committed to employees and set an example from the top
  • Provide opportunities for professional and personal growth
  • Be radically transparent
  • Have an action plan for building employee engagement (check out our article on creating an employee engagement strategy).

Frequently asked questions about measuring employee engagement

Here are some questions we get a lot of about measuring employee engagement.

How is employee engagement KPI measured?

The KPIs you set should depend on your goal. Do you want to increase performance, reduce turnover, increase your eNPS? Use benchmarks and an audit of your current situation to set KPIs.

Why do we measure employee engagement?

You can’t manage what you don’t measure. It can take a lot of time and money to develop a good employee engagement strategy, and if you don’t measure your performance you might waste it on something that doesn’t work.

What are examples of employee engagement?

Employees telling their colleagues about how good it is to work at your organisation. Employees showing up regularly and doing their best. An emotional investment in your business. You can learn more in our other article, what is employee engagement?

What are employee engagement activities?

These are activities you intentionally organise to help boost the engagement of your employees. It can range from virtual team building activities to purpose-driven volunteer initiatives. We provide more employee engagement activity ideas here.

At Alaya, we help companies build purpose-driven employee engagement programs. Want to know more? Get in touch with us today.