Latest in Employment Law>Articles>Measuring Employee Engagement
Measuring Employee Engagement
Published on: 18/10/2021
Issues Covered: Employee Engagement
Article Authors The main content of this article was provided by the following authors.
Olga Pollock
Olga Pollock

Research indicates that highly engaged workforces significantly outperform their peers, yet worryingly most are not engaged. If this is the case, how do we know whether or not this applies to our own organisation? Whether you’re at the start of your employee engagement journey or have a robust engagement strategy already embedded, it is essential that there are baseline metrics in place from which we can measure the return on investment on any engagement interventions undertaken. But what are the most relevant KPIs that we need to measure against to indicate how happy, engaged and productive our employees are?

Measuring employee engagement isn’t just about creating and deploying an engagement survey, although they do play an important part in the engagement strategy. Each organisation will differ from one to the next, so it is important to determine what issues you are experiencing such as staff turnover, sickness absence or inability to attract talent. There is little point in focusing energy into trying to improve staff retention when there isn’t a problem in the first place. Metrics should therefore be tailored to business needs.

Here are some engagement metrics for consideration:

  • Employee Net Promoter Score (NPS) – similar to asking your customers if they would recommend your product or service to a friend, the NPS asks employees if they would recommend your organisation to a friend or relative as a place to work. As your NPS improves this will impact your ability to attract and retain staff and will improve your employer brand too.
  • Cost per hire – improved employee engagement should lead to an improvement in staff retention which in turn will lower labour turnover. As a result, you will not be on a constant recruitment cycle. Cost per hire takes account of all the additional costs included in hiring a new recruit, both financial and non-financial. While market conditions can play a part in our ability to attract candidates, high engagement levels and a strong employer and talent brand should improve our chances of being able to hire candidates directly without always having to rely on recruitment agencies, although they can play an important part at times, but do add to the overall cost to recruit.
  • Staff turnover – when employees are motivated and happy at work, they are less likely to leave. Healthy engagement levels should positively impact turnover rates and can be a very useful metric to track against.
  • Sickness absence – where absence is an issue in your organisation this can often be an indication of poor engagement. Absence also impacts staff that have to pick up the slack and can be a self-fulfilling cycle. Improvements in absence levels should be a pretty good indication of a more engaged workforce.
  • New hire retention rates – if you are losing high numbers of staff during probation or even within the first year this could be because you are making the wrong hiring choices or that there is something wrong with the on-boarding and probation process. This figure should start to improve as engagement levels improve.

It is always worth keeping an eye on eye on Glassdoor for employee reviews. Checking ratings can provide useful insights into how both current and former employees feel about your organisation. It also has a powerful impact, both positive and negative, on your employer brand so worth keep a close check on.

Of course, the ultimate indication of a happy and motivated workforce is greater productivity whereas if sales are slow, complaints high and productivity is down this could well be due to discontentment among staff. While it can be difficult to make a direct correlation between improved engagement and productivity, research indicates that highly engaged employees are more productive.

 There is no magic formula for employee engagement, but many organisations now recognise that it is something that should be considered at Board level and built into the strategic objectives of the organisation. Not only will employees be more fulfilled at work, but it will positively impact the organisation too, hence why it cannot be left to chance.

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Disclaimer The information in this article is provided as part of Legal Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article. This article is correct at 18/10/2021