The 5 Most Important Employee Engagement Metrics

Heather Harper

Written by Heather Harper

Aug 3, 2018  - Last updated: Oct 21, 2018

Employee engagement levels are the key to success in any business. Engaged employees will be more motivated, more productive, more satisfied, and as a result, more effective.

But, with some business having thousands of employees, what are the simplest and most important methods you can use to measure just how engaged your employees are?

1. Employee NET promoter score

The simplest, but the arguably more important metric you can use - the employee NET promoter score.

To achieve results from using this metric, simply ask your employees 'on a scale of 1-10 (10 being very likely, 1 being not likely at all) how likely are you to recommend a family member or friend to do business with us?’.

If the average answer produced from your employees is closer to 10, then this indicates that the employees are satisfied within the business and with how they are treated. However, if the average answer is closer to 1 this indicates that the employees are feeling dissatisfied and unengaged with the company, or the way in which they are being treated.

You could include this question in an employee satisfaction survey (explained below as the second most important metric for measuring employee engagement), but I personally feel that this method is quick, cost free, simple and effective when used on its own.

employee net promoter score

2. Employee surveys of happiness and satisfaction

Simple, yet very effective. The types of surveys are easy and quick to create, and easy and cost free to distribute. Using tools such as 'Survey Monkey' or 'Google Form', you can quickly make questionnaires that will gather the desired information you want about your employees engagement.

The best way to produce these scales is to ask your employees to rate their response on a five-point scale ranging from 'strongly agree, agree, neither agree nor disagree, disagree, strongly disagree' OR to ask them to rate their responses on a scale of one to ten.

Example questions include:

  • On a scale of 1-10 (1 being very happy, 10 being utterly miserable), how happy and satisfied have you felt working here this week?
  • I feel like my role within the company is engaging (a statement question, answered using a five-point scale)
  • On a scale of 1-10 (1 being really motivated, 10 being not at all), how motivated do you feel on an average day at work?
  • I feel motivated at work (a statement question, answered using a five-point scale)

These questionnaires are useful ways of gathering data that you, and your colleagues, can interpret yourself. Perhaps, putting the results on charts for everyone to interpret would be a beneficial way to allow everyone to see where the company is at in terms of keeping its employees happy, and what areas need improvement.

However, do be careful when applying the results from these questionnaires as scales can be open to interpretation and one persons definition of what a 'two' is may be different to yours.

Here are a few general tips for producing your own survey:

  • Make sure to always own your data and to have it accessible.
  • Don't promise anonymity, but do promise confidentiality.
  • Combine this survey with other employee data that you want to make tangible, this survey may be the only time of year that you can quantify a lot of qualitative information.
  • If in doubt, work with a specialist to help you to produce a reliable and valid survey.

employee satisfaction survey

3. Employee Retention and Absentee rate

Engaged, satisfied and motivated employees will wake up in the morning and be raring to go to work and they will be more likely to stay working in the company for as long as they possibly can. Whereas, employees who feel unmotivated or disengaged will wake up in the morning and dread coming into work, meaning that they will take unnecessary days off work and will be more inclined to leave the company quicker than other employees who feel engaged and satisfied.

Therefore, one way to track employee engagement is to measure their absentee rate and their retention rate to see whether people are taking too many unexplained days off, and whether they're leaving the company too quickly.

Ways to do this include:

  • Measuring their absenteeism rate by dividing the total number of absent days per employee by the total number of working days, and multiply it by 100. The lower the score, the better.
  • Measuring the overall retention rate by selecting a measurement period (this could be as short as a month or as long as a year) and dividing the total number of employees at the end of this measurement period by the total number there was at the start of the measurement period, and then multiplying it by 100.
  • Measuring the overall turnover rate by selecting a measurement period and then diving the total number of employees who have left within the measurement period by the average number of employees during that time period, and then multiplying it by 100.
  • Calculating the average length of employment by adding up the length each employee has been in the company for, and then dividing it by the total number of employees. Look for trends, the longer the average contract length, the better.
  • Calculating the number of new hires compared to total number of employees by dividing the number of new hires currently by the total number of employees in the company. The less number of new hires, the better your turnover rate (Unless, of course, you do this after a company expansion!)
  • Calculating the total cost of employee turnover: this cost per new hire also includes the cost of advertising the position, performing background checks, costs spent reviewing resumes, making calls, conducting interviews and training. If this is high, your team isn’t that effective as a lot of money will be spent on new hires, and not on meeting goals.

Employee turnover rate

4. Financial measures

Engaged employees should, in theory, be making you more money as they will be working hard and therefore being more effective and productive. So, another important way to measure employee

productivity, profit increase/decrease

Calculate the revenue per employeeby dividing the revenue of each team by the total number of employees in that ream. This helps evaluate what each team is contributing to the organisation and can point you in the direction of team which are under performing - possibly due to poor leadership, or feelings of dissatisfaction and demotivation.

Work out an effectiveness ratio by calculating the profit for every pound spent on the organisation, or on individual teams.

Finally, another popular performance measure that measures the gains or losses from each investment, and will indicate employee engagement, is to calculate your returns on investment (ROI). To do this, subtract the cost of each investment from the gain from investment and then divide by the cost of the investment. This will allow you to figure out the productivity of your company and will allow you to see whether your employees are working as productively as possible.

returns of investment

5. Personal Growth

The final way to measure how engaged, and how satisfied, your employees are within your business is to ask them whether they feel that they have any room for personal growth and development within your company.

If employees feel that there is space for their own personal development within their current organisation, they will feel more engaged and invested, and therefore increasing the overall effectiveness of that team or your organisation. Employees with career development prospects with also show more willingness to succeed and to help the company succeed, as this will benefit them personally.

To track their personal career development, you can measure whether their previous goals have been met. If their goals have been met, set some more that represent a personal career growth, and track how, when and at what pace they will meet these.

You could also test your training plans to see whether the training that you're providing is aiding career growth and development. To do this test each trainee on the skills before their training period, and then after to figure out if it's been effective at teaching them the desired skill set.

You can also measure the effectiveness of training in aiding personal growth by gathering trainee feedback, perhaps make some questionnaires that ask questions regarding how the training has benefitted them in the long run.

A final way of doing this is to simply ask them, in one to one chats, meetings or performance reviews, 'do you think you have enough room for growth here?. Although perhaps quite time consuming, these types of meeting and conversations will provide in-depth insights into how employees feel you are benefiting them, and how you can benefit them further in the future.

Tips to provide personal development:

  • Offer constructive feedback
  • Offer opportunities outside of their set role and will be responsibilities in their future desired roles
  • Link employees to professional networks that will aid their career development in the long run.

personal career growth

Share this

Heather Harper

About the author

Heather Harper is a psychology student from the University of Lincoln. She currently works as an intern for WorkStyle and is studying a Masters in Occupational Psychology at the University of Manchester.