11 Employee Engagement Metrics to Watch

Engaged employees are the lifeblood of successful companies. They’re committed to its mission and are often willing to go above and beyond to help it meet its goals. So it makes sense, then, that companies would do just about whatever it takes to increase employee engagement. And a key part of doing that well is keeping close tabs on employee engagement metrics.
  

What Are Employee Engagement Metrics?

Employee engagement metrics are measurable figures that serve as key indicators of employee engagement. They are typically collected through biannual or annual employee engagement surveys, or through shorter “pulse” surveys, administered weekly or monthly. These allow company leaders to see a quantifiable snapshot of employee engagement and how it changes over time.

There are several different models used to understand — and quantify — the various facets of employee engagement. One popular model, the Aon Hewitt model, assesses engagement based on three observable outcomes: whether employees recommend the company as a great place to work, whether they think about looking for another job and whether they are motivated to go beyond what they would do in a similar role elsewhere.

While answers to these questions may give company leaders a sense of employee engagement, more digging is still needed to uncover the underlying causes of engagement (or disengagement) at an organization. These factors, also known as drivers of engagement, can become an engagement metric when an organizational psychologist targets that topic with research-backed survey questions. They can help organizations understand where they might have engagement hotspots and which areas should be targeted for improvement.

 

Why Is It Important to Measure Employee Engagement?

Measuring employee engagement helps companies better understand it — and how it fluctuates over time — so they can take appropriate action to improve it. That’s crucial because high employee engagement levels are linked to increased employee retention, productivity and profitability. 

Indeed, employees who buy into the company and its mission are more likely to stay with the organization, which reduces turnover costs. And holding onto the institutional knowledge of current employees leads to increased productivity and innovation, according to Kenneth Matos, global director of people science at Culture Amp. Not only that, but engaged employees are also more likely to recruit other talented employees to the organization, Matos added.

That said, measuring employee engagement can be a complicated, nuanced undertaking. 

It’s possible for a company with a high employee retention rate to have low employee engagement. It’s also possible to experience high engagement and high turnover. Nurses around the world were highly engaged and motivated in response to the Covid-19 pandemic, for example, but they were also experiencing excessive stress and burnout that caused many to leave the profession.

Measuring employee engagement, therefore, requires a careful analysis of a multitude of factors. Companies can learn more about the issues that are important to their employees by reading survey comments and providing other opportunities for employee listening.

 

11 Employee Engagement Metrics to Track

While many different tools exist for measuring employee engagement, there are several common indicators that have been proven over time and can help serve as a North Star when measuring and addressing employee engagement.
  

1. Employee Net Promoter Score (eNPS)

An employee net promoter score (eNPS) is one of the hallmark employee engagement metrics. This metric typically revolves around a single question asking employees to rate on a scale of zero to 10 how likely they are to recommend their company as a great place to work. Employees who select 9 or higher are considered promoters, and those who choose 6 or lower are considered detractors. An organization’s net promoter score is calculated by subtracting the percentage of detractors from the percentage of promoters.

While a high employee net promoter score is a strong indicator of an engaged workforce, many people leaders see it as too simplistic to be used on its own. That’s why the eNPS question is just one facet of employee engagement models used by Aon Hewitt, Culture Amp and other models.

 

2. Voluntary Turnover Rate

Voluntary turnover rate is the percentage of employees who willingly choose to leave the company in a given period of time, typically a year. If employees are leaving to go elsewhere, they are not engaged — and it may indicate other issues in the employee experience that need to be identified and addressed.

Daneal Charney, a fractional vice president of people for tech companies, suggests looking at the data to see if there are any noticeable trends by department, seniority and other demographic information. 

“Turnover doesn’t tell you a lot. It’s a blunt instrument,” Charney said. “If you really want to understand turnover then you have to segment it and say, ‘Turnover of who? Do we care? Is it turnover of employees we were going to terminate anyway, or is it our best employees?’”

Charney also suggests looking at the duration of employee tenure and seeing if there are any lessons to be learned by the timing of their resignation. If employees are leaving after two years, the company might consider if those employees felt stuck, like there was no room for advancement. If employees are leaving after six months, the company might rethink its onboarding process.

“This provides a starting point for insights and determining what you can do about it,” she said.

 

3. Employee Retention Rate

Employee retention rate refers to the percentage of employees who stay with an organization over a set period of time, typically a year.

Engaged employees are much more likely to stay with an organization. If a high percentage of employees stay with the organization, the workforce could be highly engaged and therefore more productive, innovative and invested in the organization’s mission. A high employee retention rate could also indicate that underperforming employees are staying with the organization, which can hurt productivity and be frustrating for high-performing employees. 

Experts have varying opinions on the ideal employee retention rate, but in general, 90 percent is a good number to start with. Charney said companies should really be focused on the retention rate of people with key skills who matter most to the business.

“My target would be 80 to 90 percent retention of key skills/talent at any given time or a tenure of about two and a half years in tech, which is well above the norm,” Charney said.

More on Employee EngagementHow to Successfully Measure Employee Engagement

 

4. Learning and Development

Company leaders should have insight into how their workers feel about the level of access they have to learning and development opportunities. The more opportunities employees have, the more it signals to them that their organization cares about their professional growth.

The downsides are great too. If a manager doesn’t show interest in an employee’s career, that direct report is twice as likely to leave within the next 12 months, according to Matos.

Keep in mind: When employees say they want access to learning and development, that doesn’t necessarily mean they want a promotion, said Benjamin Granger, chief workplace psychologist at Qualtrics.

“When we ask people, ‘What do you mean by growth and development?’ promotion is very low on the list,” he told Built In. “It’s about learning new skills, including soft skills like learning how to be a leader and learning how to communicate. That’s not surprising because growth is a universal human need.”

Sometimes employees can feel like they aren’t getting the learning and development opportunities they are seeking, which can cause them to feel disengaged and leave the company. By measuring an employee’s perception of learning and development opportunities, companies can start a dialogue about the employee’s career ambitions and prevent them from leaving.

 

5. Employee Enablement

Employees feel more engaged when they are given the tools they need to do their job — whether that be software, training or personnel. Not having the right tools to do a job can be frustrating, Granger said, and technological limitations in particular can cause employees to disengage and experience burnout.

One of Culture Amp’s clients, for example, conducted an engagement survey that found multiple employees complaining about a new software tool. Instead of dismissing the concerns as a learning curve for new technology, Matos said, the survey helped the company learn that the new software tool was not addressing a specific task. From there, the company was able to look at other ways of accomplishing that task.

 

6. Confidence in Leadership

Employees are also more engaged when they are confident in the company’s leadership, when they are motivated by leaders’ vision and when they feel like leaders are keeping people informed about what is happening in the company. 

“Leaders can make statements that show people that they care,” Matos said. “They can make policy decisions that show people that they care, which in turn drives [employees] to care about the company.” 

If employees’ perception of leadership starts to decline, overall engagement levels can drop at least 10 percent, according to Culture Amp. When employees lose faith in leadership, it can take three to six months before those metrics return to previous levels.

 

7. Relationship With Manager

The relationship an employee has with a company often comes down to their relationship with their manager. As the saying goes, “people don’t quit companies, they quit bad managers.”

Management is so important that Gallup estimates it accounts for at least 70 percent of the variance in employee engagement scores across business units.

If an employee trusts their manager, they are more likely to communicate freely and openly with their manager about their expectations and any issues they might have. They are also more likely to feel a sense of psychological safety, which is necessary for employee engagement.

Employees also crave feedback from their manager so they can grow as professionals. If employees aren’t advancing in their career and aren’t receiving feedback, they may become disillusioned in their job. 

 

8. Employee Recognition

Everyone likes to be recognized for their hard work. When employees feel they will be recognized, they are 2.7 times more likely to be engaged, according to research by Quantum Workplace. Gallup found that, when recognition hits the mark, employees are nearly four times more likely to be engaged. 

Establishing recognition programs can amplify these positive effects, reducing the voluntary turnover rate by 31 percent. Managers who offer timely recognition can make employees feel valued and appreciated, so employees may stick around if they feel supported and believe they are doing meaningful work in the company.    

 

9. Autonomy and Empowerment

Autonomy and empowerment is the degree to which employees have the ability to make decisions, take actions and do their best work. This is a “very strong predictor” of engagement for high-performing employees, Granger said. When employees feel unencumbered in their work, they are more likely to feel intrinsically motivated, become emotionally invested and establish a sense of trust — all key signs of employee engagement.

 

10. Employee Satisfaction

Employee satisfaction — also called job satisfaction or workplace satisfaction — refers to how happy employees are in their current roles. This is different from employee engagement, which refers to how passionate employees are about their work. A happy workforce also makes employee turnover less likely, giving teams stability and enhancing the company culture. 

In addition to employee retention and turnover rates, organizations may use an employee satisfaction index.

 

11. Employee Engagement Survey Participation

An easy way to gauge employee engagement levels is by asking workers to complete an employee engagement survey. The survey may feature a sliding scale of one to 10 for each question, so employees can signal how much they agree with a statement.

Be sure to pay attention to the participation rate. A 100-percent participation rate may reflect employees quickly filling out the survey, giving sloppy answers or skipping over questions. For smaller companies, an 80-percent response rate is a solid benchmark while larger businesses can gather enough insights from a 70-percent response rate.

 

Frequently Asked Questions