How to Measure Employee Engagement: 10 KPIs and Metrics to Use

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Talent is the lifeblood of any company, whether it’s a tiny startup or a multinational corporation. In fact, according to McKinsey senior partners Scott Keller and Mary Meaney, two out of the ten most basic issues facing organisational leaders involve talent:  

  1. Talent acquisition and retention and;
  2. Developing existing talent.

Top talent is also inextricably linked to high productivity. In a study of more than 600,000 employees in academia, entertainment, and sports, researchers found that high performers are four times more productive than average workers. The gap widens even further as the job becomes more complex — high performers become eight times more productive. 

It’s no surprise that top companies also understand the importance of retaining top talent. According to SHRM, companies that view employee retention as a top HR insight are better equipped to keep talented and motivated people who genuinely want to be part of the company and contribute to its success. 

One way to improve your company’s ability to retain employees is to keep an eye on how engaged they are in their work. 

Related Reading: How to Build Employee Engagement, Satisfaction, and Increase Staff Retention

Why every business needs to learn how to measure employee engagement

Happy employees are productive employees — or so the adage goes. In one Oxford study, researchers found that employees are 13% more productive when they’re happy

But exactly makes employees happy?

While different people have different sources of motivation and satisfaction, an answer that often comes up is engagement. When employees are engaged, they’re more likely to be more invested in their work. Organisations with an engaged workforce have double the rate of success compared to less engaged companies. 

Related Reading: Building an Employee Engagement Strategy for 2022

However, employee engagement can be a tough nut to crack for the average company. 

For instance, a recent Gallup Workplace report shows that employee engagement has been on a steady decline since 2020. This isn’t surprising considering how the pandemic and the subsequent economic crisis have created one of the most turbulent periods for workforces in modern history. 

These developments have also had a knock-on effect on worker engagement. Our research on employee attitudes in 2021 shows that 55% of UK and US employees now want to work in a combination of home, office, and approved public spaces — an arrangement known as hybrid working

Download: The Hybrid Workplace — An Employee Census Report

Demand for hybrid working and other types of flexible work is by no means a new development. Our 2019 research on employee experience shows that 78% of workers considered flexible working choices (e.g., flexibility in working hours and location) as important or very important to their work experience. 

How to measure employee engagement: breaking down the KPIs and metrics

So, how can you tell if your employees are engaged? There are several key performance indicators (KPIs) and metrics you can use to measure employee engagement. Here are 10 of the most important ones you should know:

1. Job satisfaction

This is perhaps the most obvious KPI to track as you learn how to measure employee engagement. After all, if people are happy with their jobs, they’re more likely to be engaged in their work. You can measure job satisfaction through surveys or polls, as well as one-on-one interviews and group discussions with your teams. 

2. Employee turnover

Employer turnover refers to the number or percentage of employees who leave your organisation over a set period — typically on a year-on-year basis. High or a sudden spike in turnover can signify that employees are not engaged in their work. You can track turnover rates by department or company-wide.

3. Productivity levels

Engaged employees are typically more productive than those who are not engaged. You can measure productivity levels by tracking output per employee, hour or project.

4. Quality of work

Another way to assess employee engagement is to look at the quality of work being produced. This can be measured through customer satisfaction ratings, error rates, or other quality control metrics.

5. Safety records

Engaged employees are usually more safety-conscious than those who are not engaged. You can track safety records by looking at the number of accidents or injuries that occur in the workplace.

Related Reading: 3 Key Drivers of Employee Engagement in Hybrid Teams

6. Absenteeism

Employees who are not engaged in their work are more likely to take more sick days or be absent from work for other reasons. You can track absenteeism by looking at the number of days employees are absent per month or year.

7. Employee satisfaction with benefits

Engaged employees are typically happier with their benefits packages than those who are not engaged. You can measure employee satisfaction with benefits by conducting surveys or polls.

8. Employee satisfaction with company culture 

Another way to assess employee engagement is to look at how satisfied employees are with the company’s culture. Do your people feel that your workplace is inclusive? Are you doing enough to promote diversity? Are people, regardless of gender, race or age, treated and compensated fairly? These are just some of the questions to ask your workers about your culture. 

9. Employee satisfaction with management

Engaged employees usually have a higher opinion of their managers than those who are not engaged. You can measure employee satisfaction with management by conducting surveys or polls.

10. Employee referrals

Engaged employees are more likely to refer friends and family members to work for the company. You can track employee referral rates by looking at the number of new hires who were referred by existing employees. You can also conduct employee surveys to calculate your Employee Net Promoter Score (eNPS) — a metric that measures the likelihood of staff members recommending your organisation as a good place to work.

Related Reading: How to Improve Employee Engagement

Measure employee engagement by tracking multiple KPIs and metrics

These are just a few of the KPIs and metrics you can use to measure employee engagement. By tracking these indicators, you can get a better understanding of how engaged your employees are and take steps to improve engagement levels if necessary.

Find more insights about employee management by following the Cloudbooking blog. If you need a cloud-based solution to enable flexible and hybrid working that doesn’t alienate your people, get in touch with the Cloudbooking team to learn more about our workplace management platform. Schedule an obligation-free demo to learn more.

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