Employee engagement is more than just a buzzword — it’s a critical driver of retention, productivity, and overall organizational performance. With engagement levels hovering near a
decade-low of 30%, more companies are looking to improve the employee experience.
Managing the level of engagement starts with knowing where employees stand. Businesses that know how to measure employee engagement can identify what’s working and what needs attention so they can form effective strategies.
However, quantifying employee sentiment toward coworkers, jobs, and the organization as a whole presents a unique challenge. In this blog, we’ll define employee engagement and explain how companies can generate insights to inform a successful engagement strategy.
What is employee engagement?
An engaged employee is a team member who often feels enthusiastic about coming to work. This emotional connection prompts them to support their coworkers and employer. This attitude can lead to a more positive outlook, increasing productivity, innovation, and creativity while reducing employee turnover.
Why measure employee engagement?
Employee engagement contributes to many areas of business success, such as productivity and profitability. By tracking employees’ connection to their workplace, companies can identify opportunities for improvements and build a more dedicated team.
According to a
Gallup study, companies with strong employee engagement strategies see measurable improvements in the following critical business areas:
Increased profit. Teams with highly engaged employees are 23% more profitable than those with lower investment.
Higher product quality. Highly involved employees produce 41% fewer defects.
Absenteeism. Disengaged employees take 81% more sick days.
Fewer safety incidents. In hospitals, engaged employees see 58% fewer patient safety incidents, while staff in non-healthcare settings have 64% fewer accidents.
Employee retention. Companies in industries with traditionally high employee turnover experience 18% less churn.
In fields with traditionally lower turnover, highly engaged businesses experience 43% better
employee retention.
In addition, employee satisfaction influences customer satisfaction. A Glassdoor study found that a
one-star improvement in an employer’s Glassdoor rating correlates to a 1.3-point increase in customer satisfaction out of 100.
This effect more than doubles for high-touch sectors like retail, financial services, and health care. The result even benefits stock market valuation, which may rise by as much as 18.9%.
Metrics to track employee engagement
Emotional commitment is challenging to assess, but the following measures help HR departments quantify it. Tracking these employee engagement metrics also helps establish benchmarks and develop strategies to address employee disengagement.
Employee satisfaction
This metric measures how happy or content employees are with their role, workplace environment, and company culture. High levels of employee satisfaction can indicate positive engagement.
The employee net promoter score (eNPS) measures the likelihood an employee will recommend their employer as a place to work. This metric speaks to workforce loyalty and willingness to advocate on the company’s behalf.
Employee retention rate
This metric measures the percentage of employees who stay with a company over a given period of time. Engaged employees are often more loyal to their employer, even when presented with compelling offers. Conversely, high turnover rates may indicate an unhappy team.
Productivity trends
Performance has a strong correlation with employee engagement, so metrics that assess productivity — like output per employee, sales revenue, and project completion rate — are good indicators of how invested employees are.
Employee feedback
Surveys, suggestions, and feedback tell employers a lot about how employees feel. An engaged workforce is more likely to be honest about issues and offer potential solutions.
Employee recognition and collaboration
Teams show their dedication through mutual support, celebrating individual and team success. When coworkers collaborate enthusiastically and highlight their peers’ accomplishments, it indicates a positive company culture.
Attendance and punctuality
High absenteeism and tardiness indicate disengagement within the workplace. Dedicated employees want to be at work, so companies should monitor attendance for signs of low investment.
6 methods to measure employee engagement
There are many employee engagement measurement tools available to help employers assess their team. Using them in combination provides a comprehensive understanding.
1. Employee engagement surveys
Many types of surveys can help evaluate employee satisfaction, solicit feedback, and measure the impact of current engagement strategies. Companies should choose the one that best suits their current goals.
Annual employment engagement surveys. This comprehensive survey gauges the full employee experience, uncovering how team members feel about key areas, such as the work environment, management, career development, communication, recognition, and work-life balance.
Pulse surveys. As the name suggests, pulse surveys take a snapshot of employee engagement. Using open-ended and scale questions, the short survey solicits feedback on a single topic, such as communication, environment, or leadership.
eNPS surveys. Employee net promoter score surveys provide insights into how employees feel about the organization. The straightforward methodology helps identify whether there are issues with employee engagement, but doesn’t specify what the issues are or where they’re located. HR should use this tool in conjunction with others for a clearer picture.
2. Exit interviews
Exit interviews allow HR and departing staff to have a meaningful conversation about what motivated an employee to leave the organization. These discussions can uncover insights into employee satisfaction and how it contributes to turnover rates.
3. Stay interviews
Managers can conduct “stay interviews” during team member one-on-ones to qualitatively assess engagement levels and address concerns in real-time. These are structured similarly to exit interviews, but instead of asking why an employee is leaving, leaders ask why they’re staying.
Stay interviews reveal what an employer is doing right and highlight issues before they cause an employee to leave. They also give managers the opportunity to connect with their team on a more personal level, increasing the sense of belonging and trust.
Employee feedback platforms are online tools for gathering, analyzing, and managing employee input. They typically include surveys, check-ins, and 360-degree feedback. All data is kept anonymous, encouraging everyone to share honest feedback without fear of reprisals.
This analysis drives immediate, data-informed, and actionable insights, allowing employers to establish practical engagement strategies.
A formalized recognition program doesn’t just provide positive reinforcement for dedicated team members; it also generates valuable data on commitment in the workplace. Employers can enable peer nominations for perks and track how often employees recognize one another’s achievements. These nominations indicate engagement from the giver and the recipient.
In addition to streamlining HR and payroll processes, HRIS software can also help record and analyze engagement metrics. Comprehensive solutions include people analytics tools, which provide a central hub where leaders can compile and cross-reference data on the following topics:
Productivity
Promotions
Turnover
Satisfaction
Absenteeism
This information can be used to generate reports, inform decision-making, and assess the efficacy of employee engagement initiatives.
Common mistakes to avoid
Part of learning to measure employee satisfaction is understanding the best ways to gather data to improve employee engagement. Here are some common pitfalls organizations make when assessing workplace satisfaction.
1. Vague metrics and KPIs
Engagement metrics and key performance indicators allow companies to measure satisfaction accurately and provide aspirational goals. They should be relevant and tailored to provide benchmarking data to assess current organizational satisfaction and attitude changes over time.
2. Only prioritizing quantitative data
Failing to gather and consider qualitative data, such as answers to open-ended questions or feedback from exit interviews, can lead HR to overlook valuable insights. By combining survey results with employee feedback, the organization can better understand factors influencing engagement.
3. Ineffective communication
Employee engagement surveys can only provide actionable insights after garnering input from team members in all departments and seniority levels. To promote widespread buy-in, employers must clearly communicate about these initiatives across various communication channels, such as email, instant messaging, and verbal reminders.
Beyond explaining when and how employees can provide feedback, leaders should show them why their responses matter by highlighting the direct impacts of survey results. Transparency and accountability are crucial throughout the process.
4. Relying on one-time initiatives
Annual employee engagement surveys supply valuable data, but companies are missing opportunities for improvement if they only seek feedback once per year. HR might take several months to resolve an issue that developed midyear, leading to a
turnover rate spike. Conducting routine pulse surveys may uncover the problem in time to
prevent employee attrition.
5. Neglecting to take action
Failing to follow up on employee feedback erodes trust in the process and decreases survey participation rates. As a result, employee engagement falls further. Companies must commit to developing a timely action plan to address employee survey findings.
Help attract, support, and retain employees with EarnIn
Many factors influence employee engagement, but those that support employee well-being, professionally and personally, tend to have the greatest impact. One way companies can demonstrate their commitment to
employee wellness and help increase loyalty is reducing financial stress. When employees feel financially secure, they’re more likely to be focused, motivated, and invested at work.
EarnIn helps companies do just that. Starting with
Earned Wage Access, employees can get paid in minutes — up to $150 per day and a maximum of $750 per pay period
— starting at just $2.99 per transfer.
However, EWA is just the beginning. Additional tools like Balance Shield
help protect employees against overdrafts, while Bill Reminders
keep them on top of due dates – all working together to help support financial stability. The best part? HR leaders can offer EarnIn’s financial wellness benefits with no cost to the employer and no integration with payroll or time and attendance systems required.
Discover how
EarnIn can complement your existing
benefits programs, enhance the employee experience, and help promote an engaged and satisfied workforce.
Please note, the material collected in this post is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or services.
EarnIn is a financial technology company, not a bank. Banking services are provided by our bank partners on certain products other than Cash Out.
2020, Gallup, Q12® Meta-Analysis
2019, Glassdoor, Happy Employees, Satisfied Customers: The Link Between Glassdoor Reviews & Customer Satisfaction
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