How to measure employee engagement

Employee engagement is business critical — engaged workers produce better outcomes, driving productivity, sustainable growth, and profit.

• Why it matters: Low engagement costs money. A two-point decrease in employee engagement levels results in a loss of $438 billion in the global economy, according to Gallup’s State of the Global Workplace. 

Get valuable insights into employees' commitment to your organization from quantitative and qualitative engagement metrics that allow you to make informed decisions about company culture and productivity strategies. 

We think about it like this...

Benefits of measuring employee engagement

You can’t manage what you don’t measure. Learning how to measure employee engagement is all about making better decisions that drive desired business outcomes. 

👉 Here’s why you want to measure employee engagement:

• Increased productivity: Engaged employees perform better than unmotivated or dissatisfied workers, leading to better output and outcomes.
• Improved retention: Satisfied employees don’t actively look for new job opportunities. Turnover rates for teams with these workers are 18 to 43% lower than those of low-engaged teams.
• Improved company performance: Seasoned workers constitute a stable and skilled workforce, allowing businesses to focus on growth strategies.
• Customer satisfaction: Happy employees deliver positive customer experiences, boosting customer loyalty.

The big picture: Measuring engagement arms you with actionable insight into the motivations and feelings of one of your primary drivers of success – your employees.

How to measure employee engagement

Employee engagement metrics fall into two categories:

• Quantitative measures. The numbers This involves collecting, calculating, and analyzing behaviors, patterns, and trends. Key metrics like email open and click rates show how many employees engage with internal newsletters.
• Qualitative measures. These are descriptive and seek to explain the underlying reasons behind specific behaviors, patterns, and trends. Open-ended surveys reveal why employees don’t read internal newsletters. 

Deploy both for a holistic view of employee engagement that leans on quantitative metrics to answer 'how many' or 'how much' and qualitative metrics that investigate 'why.'

1. Set up one-on-ones

Face-to-face conversations with employees are a great way to measure levels of employee engagement for a couple of reasons. They...

• Give employees a forum to share concerns and feedback directly.
• Allow managers to assess nonverbal cues such as body language and tone of voice. 
• Facilitate trust and relationship building between leadership and employees. 

Many employers use one-on-ones for qualitative measurements, but you can also use them to collect quantitative data by preparing questions that require numerical answers. For example...

• Rating scales: On a scale of one to five, your work contributes to the company’s mission.
• Yes or no: The company provides all the tools necessary to fulfill my duties.
• Multiple choice:  Which area should the company improve on? Culture, benefits, or compensation.

Be mindful: Create a safe environment in one-on-ones whether you use them to collect qualitative or quantitative data. Practice active listening by paying attention to employees' words and their intent.

2. Calculate the employee net promoter score

The Employee Net Promoter Score (eNPS) measures employee loyalty and job satisfaction by asking employees how likely they are to recommend your company as a place to work. You can use it This allows you to understand how your initiatives affect employee engagement.

⚙️ How it works: Employees respond on a scale of 0 to 10, 0 being unlikely and 10 being most likely. Survey respondents fall into three categories.

• Promoters (9 and 10) are satisfied and highly engaged — they'll recommend the company.
• Passives (7 and 8) are satisfied but not necessarily engaged, so their recommendation isn't a guarantee.
• Detractors (1-6) will criticize the company because they're dissatisfied and unengaged. 

Calculate your eNPS score by subtracting the percentage of detractors from the percentage of promoters. So, if 40% of employers are promoters and 10% are detractors, your score is 30.

• Employee engagement scores range from -100 to 100. Generally, a poor eNPS score is below 0. An average/good score is between 10 and 30. An excellent score is above 50.
• Your goal is to have more promoters than detractors.

Employee Net Promoter Score is a quantitative measure. It gives you a snapshot of engaged vs. disengaged employees, but doesn’t tell you why they would or wouldn’t recommend your organization. 

• 💡 Pro tip: Add a comment section where respondents can explain their scores or can follow up with detailed surveys. 

3. Analyze internal communication data

Effective internal communication happens when employees understand how their work impacts company goals. They get a sense of purpose and become more engaged.

• Yes, but: Only 9% of employees report feeling aligned with business objectives. Ineffective communication practices could be the problem. 

Internal communication platforms like Axios HQ should be part of your employee engagement strategy. They help organizations plan, write, and send essential communications to boost alignment. Use one that helps you measure internal comms to understand if, when, and how employees engage with content. 

Our analytics and reporting tool tracks key performance indicators, like open rates, click rates, views, and delivery status. It breaks down these key metrics by edition, employee segments, and individual recipients. 

Source

These insights tell you who’s engaging with your internal communications and what content they’re engaging with. If a department isn’t interacting with a particular communication, you can investigate whether it’s a lack of access, content relevance, or motivation.

4. Conduct employee engagement surveys

Surveys are a popular employee feedback mechanism because they collect quantitative and qualitative data about how employees feel. Ask the right survey questions and you'll get relevant insights to support your decision-making. 

• Open-ended question surveys let you collect qualitative data about their preferences, motivation, and behaviors.
• Closed-ended question surveys give you quantitative data from multiple-choice questions, which can be measured and graphed.
• Hybrid surveys combine open-ended and closed-ended questions. 

Engagement surveys only work if you conduct them correctly. Survey design best practices suggest avoiding jargon. If employees don’t understand what you're saying, they can’t give accurate responses.

• Don’t combine two options in a question, like what is the fastest and most convenient communication channel? This forces employees to interpret what you're asking — the fastest channel may not be the most convenient. 
• Ask specific questions to narrow answers down to action. General questions like ‘Do you like the company?’ can be interpreted in many ways (organizational culture, location, values, etc.). 

A few examples of survey questions....

Employee satisfaction questions could return employee sentiment insights:

• Are you excited about coming to work?
• Do you enjoy working with your team?
• Are you satisfied with your current compensation and benefits?

Employee alignment questions reveal employee motivations:

• Do you relate to the company’s vision or values?
• Is your work meaningful?
• Are your contributions recognized?

Professional development questions hone in on future goals.

• Does the company have a career advancement path?
• Are you encouraged to learn new skills?
• Do you see yourself working here in two years?

💡 Pro tips: Keep survey questions consistent to track progress over time. Include demographic fields to assess engagement across different segments.

• Use annual surveys to evaluate engagement across the entire workforce.
• Employee pulse surveys are shorter, sent more frequently to a specific team or to all staff for a real-time sentiment view.
• Lifecycle surveys capture how employees are feeling around milestones like onboarding, promotions, and exits. 

5. Analyze employee retention and turnover rate 

Retention rate measures the percentage of employees who remain with your company over a specific period. Of course, your ability to retain employees indicates how engaged your workforce is.

• If your company has 300 staff and 15 left, your retention is 95%. The higher the employee retention rate, the better. 

Source

Voluntary turnover happens when employees resign from an organization. Turnover rate measures the percentage of employees who leave your company over a specific period.

• If you started with 300 employees and 15 left, your turnover rate is 95%. The lower the turnover rate, the better. 
• Note that new hires aren’t counted as part of the employee base when calculating employee turnover.

Source

🔎 Why employees leave: Common causes of turnover, according to Indeed, include work/life imbalance, inconsistent management styles, and lack of recognition. Plus...

• Lack of career development or advancement
• Poor culture
• Low compensation

Turnover hurts employee engagement. Productivity decreases when an employee leaves because there's more work and fewer people to do it. It disrupts team dynamics and causes more stress from the increased work, leading to burnout and disengagement.  

Retention and turnover rates are quantitative measures, so if you want to know why employees are leaving, ask them. 

6. Conduct exit interviews

Few people are more honest than departing employees, and you can leverage their feedback to understand and improve employee engagement.

Exit interviews reveal gaps in your work culture, processes, management style, and employee experience. They also contextualize patterns or trends in turnovers.  

Common exit interview questions to consider...

• What led you to search for a new job?
• What factors negatively affected your ability to succeed in your role?
• What were the enjoyable aspects of your role?
• Has your role changed since you were hired?
• Did you feel recognized or valued by leadership?
• Where can the organization improve?

The best time to conduct an exit survey is up for debate — some experts suggest doing them during the notice period when the employee is readily available, while others recommend running them after the employee leaves to avoid biased answers. A good compromise is after references have been provided.

The big picture: Understanding why employees leave your organization helps you implement effective retention strategies, but you don’t have to wait until an employee resigns to ask why they’re unhappy.

• Employee absenteeism rates clue you in to potential problems. Conduct stay interviews to address the reasons employees are sticking around or consider leaving. 

The bottom line

Companies succeed when employees are happy. Employee engagement metrics are useful indicators of your organization’s productivity, profitability, and brand value. Learning how to measure employee engagement levels using quantitative and qualitative measures gives you an accurate picture of employee sentiment.

• Don’t forget to act on employee feedback. It demonstrates your commitment to your colleagues, which builds trust and boosts engagement.

Go deeper: Learn how to build employment engagement with internal communication.