Measuring Employee Engagement: Metrics & Methods

Measuring employee engagement is a life-saving health checkup for teams. It can reveal treatable weaknesses and help make better choices in the future. 

But what’s the true measure of an engaged workforce? Is it a team that dutifully clocks in day after day? Is it the one who always participates in surveys and team-building?

Read on to learn more about measuring employee engagement for a brighter future and which metrics are most important. 

Ways to measure employee engagement: Data gathering

Before breaking down the metrics used to measure employee engagement, let’s review how to get the information we need. 

Surveys

Many companies have employees complete a comprehensive survey a few times a year. These are useful for gathering niche insights and measuring overall job satisfaction. 

However, a lot can change in a few months, especially if engagement is low. Pulse surveys are shorter questionnaires that you can distribute every few weeks, if necessary. These answers will supplement those deep-diving surveys.

1:1 meetings

Quarterly or annual reviews, check-ins, and 1:1 meetings not only improve engagement, but also net quick, individual answers to direct questions. 

How often managers should get in front of team members one-on-one depends on organization size and other factors. To get quality feedback and strengthen engagement at once, start with once a week. 

Employee Net Promoter Score (eNPS)

This is a proprietary survey using a standard methodology to measure employee engagement. One larger benefit of using eNPS is that you can check metrics against other companies.  

Observation

You don’t have to put them under a microscope, but simply making note of certain employee behaviors is a helpful indicator of their engagement levels. 

Record who participates in team-building activities, volunteers for projects, shows up to team events, and takes advantage of recognition programs. This is one reason why 1,000+ companies use HeyTaco.  They can connect employees with a recognition platform and see at a glance who is using it, how often, and for what purpose. 

Retention

There are three types of retention rates to consider using for measurement:

• Voluntary–Those who stay by choice and are not laid off or terminated
• New hire–Helps indicate the percentage of new hires who remained with the company for a certain amount of time (such as a year)
• Overall–The whole lot

You may also want to segment by role or department.

PRO TIP: Combine qualitative and quantitative data

Improve results with a mixture of info from observation and one-on-ones (qualitative), as well as hard data from surveys and recognition software (quantitative). 

The nuance and detail we get from combining methods paint a more compelling picture. In fact, the context provided by the qualitative may explain the quantitative. You can start brainstorming the right solutions within moments of identifying the problem.

Measuring employee engagement: Metrics to watch

Now that we have all of the variables, it’s crunch time. Here are the employee engagement metrics with the biggest impact on your team’s diagnosis.

1. Recognition frequency

How often are employees giving and receiving recognition from peers and leaders alike? Recognition does not have a favorable impact on engagement rates unless it is consistent and authentic.

Employees indicate that ideally, they’d like feedback from management a few times per month. However, engaged employees have valuable interactions with management at least once a week. Why the discrepancy?

Because the words valuable and authentic do a lot of the heavy lifting. Recognition needs to be honest and productive. Employees don’t look forward to critical feedback or recognition that feels compulsory or phoned in. 

This is why peer recognition matters. Employees perceive feedback from their peers as being more authentic, and they also have easier access to it. It creates more space for management to focus on periodic–yet still consistent–feedback that reinforces that employee’s value and purpose.  

Target: Peer recognition interactions should be daily to a few times a week, per employee. Management and leadership, once a week. 

2. eNPS

The eNPS score measures the percentage of employees who would recommend others work at your company. It’s a simple, straightforward tool to find out who is satisfied with their job, who’s vibing with your core values and goals, and who is loyal to the organization.

Yes, you get all that from just one question. It’s one question! We’ll tackle participation coming up, but needless to say, something’s amiss if you cannot get employees to respond to this brief, high-impact survey.

Target: Your eNPS score should be between 10 and 30, although netting a 9 isn’t a total wash. Your employees will be categorized as Promoters, Passives, and Detractors.

3. Survey participation

How many employees are taking your engagement surveys? A low participation rate can be a symptom of a few issues.

First, people avoid taking the survey because they feel it’s not worth their time. Some may just not care because they’re not invested in the company’s success. Others don’t have any hope of things improving. Others who don’t participate are just fulfilling their requirements until they get a new job.

Then, there are employees who don’t trust the company enough to offer honest feedback. They fear their assessments and opinions will be used against them later on, or that management will retaliate.

Target: Aim for a participation rate of 65% or higher. If you can get more than 70% of employees regularly surveyed, it’s a great sign of sufficient engagement.

4. Survey scores

Engaged employees feel a sense of purpose, they enjoy regular recognition, and they feel that they have growth opportunities. They understand what their managers expect from them.

If participation rates are high enough but the scores are lower than you’d like, all is not lost. This indicates that employees aren’t completely disengaged and have some optimism around positive change. They’d rather call for change than mentally check out.

Target: Like participation rates, you want a score of 65% or above. 

5. Internal mobility and career development

Is getting hired at your company a one-and-done? That’s a risk factor for disengagement. This employee engagement metric examines whether staff have the opportunity to be promoted, make lateral moves, or expand their skills.

Whether or not someone is leadership material, they don’t want to feel stuck. Subconsciously or not, we all find it very engaging to have something new or better to work toward. Even if it’s a new training that makes our standard roles go a little bit smoother.

Target: Promote from within where possible, and spot more opportunities to offer workshops, lateral shifts, or continuing education for loyal employees.

6. Turnover rates and absenteeism

Frequent call-outs and sick days aren’t just indicative of one type of virus going around. One of the first signs of teamwide burnout is a rise in absenteeism. 

High turnover rates can signal a wide range of issues, but one of the loudest distress calls is from the high-performing employee who voluntarily departs. They realize their abilities would likely be more appreciated elsewhere.

Target: It depends on the organization, but a turnover rate of 10% or less is ideal. A good company-wide absentee rate is around 1.5%. Individual absentee rates can reasonably approach 4.5% for valid reasons unrelated to engagement.

7. One-on-one management meetings

We saw earlier that engaged employees interact with management regularly. Even on remote teams, where manager and employee will rarely or never meet in person, hearing directly from a higher-up impacts engagement.

Taking things a step further, 1:1 meeting frequency is a factor in engagement levels. These meetings help clarify an employee’s purpose, validate their efforts, and give them a chance to resolve issues promptly. It’s also key for building relationships.

Target: Anyone who reports directly to management should have the opportunity to meet 1:1 once weekly or more. 

8. Cultural participation

Employee resource groups (ERGs), team outings, and other programs are of great benefit–to engaged employees. These optional occasions and events strengthen bonds, encourage growth, and build cohesive teams. 

If people aren’t opting in, compare it against turnover rates and KPIs. If engagement is poor, one or more of these usually are, too. It’s also a sign that your culture is incomplete or doesn’t align with employees.  

Target: Attendance of 70% or higher is ideal. Always ensure that the bulk of optional events don’t encroach on off-hours that would reasonably be dedicated to personal responsibilities. 

9. Employee referrals

The eNPS is a hypothetical; who is putting it into practice? Are current employees recommending your company to professionals in their networks? 

If this isn’t already part of the hiring process, make sure to ask. This isn’t always part of a formal referral program. Some applicants may have seen an employee raving about you online or picked up on how satisfied they were with their job. 

Target: An employee referral rate of 30-40% is a sign of a great company reputation, spread by engaged employees. 

Improve engagement and get helpful insights with HeyTaco

Examining employee engagement data left you wondering what to do next? Consider adding peer recognition, meaningful rewards, and a new way to view analytics–all on one platform. 

Whether you’re in the business of email signatures or internal medicine, HeyTaco boosts engagement. It gives teams a fun and easy way to recognize one another daily, while helping leaders find new opportunities to improve employee engagement metrics.

Check it out and try it for free.