How Do You Measure Employee Engagement?

Measuring employee engagement is usually done by computing for the following metrics: 

1. Turnover Rate – measures the rate at which your employees seek other employment
2. Productivity Metrics – measures the accomplishments and goals achieved of each employee
3. First-Year  Retention – measures the number of new hires who stay after a year
4. Net Promoter Score – measures the likelihood of employees to refer candidates and customers to the company

What is employee engagement?

Employee engagement is something that companies are now chasing after as the competition for top talent becomes stiffer and stiffer. Engaged employees are better in every way as they improve overall company productivity, reduce personnel cost, and tend to contribute more to the company’s well-being.

Companies that employ employee engagement create an environment that is conducive to the growth and satisfaction of employees. When employees are happy, they are likely to go the extra mile for a company that they believe they can trust. Engaged employees feel like the time and effort they invest in the company is worth it because it contributes to a positive impact in their lives.

Because employee engagement is so important, companies need to know if they’re doing enough to keep their employees engaged; otherwise, they risk losing important talent they need to keep their company running like clockwork.

Employee retention metrics

When looking at employee retention, one only needs to look at how they fare in the metrics that follow. These metrics allow the company to see where they can improve and where they can make a difference in their employees’ lives.

1. Turnover rate – This is the most obvious metric for employee engagement. Unhappy employees try to look for opportunities elsewhere. A high rate of turnover could be a symptom of a larger problem within the organization that is keeping employees disengaged. Normally, any turnover rate higher than 10% is problematic, according to Gallup. As an additional note, it is also important for companies to take note of who is leaving the company. The more people at the top are leaving, the more serious your engagement problem is.
2. Productivity metric – While a general tool, it is one of the metrics that count the most, and one that can nip the problem at the bud before employees start fleeing your company. The importance of the productivity metric is that an increase in 5% productivity results in a 3% increase in revenue growth in the following year. Having productive employees is all about giving your employees the tools they need in order to rise up in their careers, which results in a stronger drive to perform.
3. First-Year Retention – Employee engagement starts even before the very first day of work. If companies want to retain employees, just thinking about top management is not enough. In this age of transparency, the new generation can quickly come and go especially if their expectations don’t match the reality of the company—or at least come close to it. And for some employees, the “honeymoon period” can be very short-lived, and your potentially high contributing new hire could be gone even before you can fix your problems.
4. Net Promoter Score – this is perhaps the most telling of all the metrics in this list. Employee net promoter score can do wonders for your business in terms of getting quality talent for the right position and increasing the potential of your organization to grow. Engaged employees become their first advocates and recommend them to the people and organizations they know. Having a high net promoter score means that your employees are engaged to the point that they find ways to further contribute to the company.

Seeing the impact and importance of having high employee engagement, companies should be very aware of how they fare with these four metrics, or else risk losing their top talent tomorrow.