10 “Employee Engagement Metrics” Your HR Department Should Be Tracking

by Srikant Chellappa Dec 16,2023
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According to a Gallup report, an engaged workforce boosts profitability by a commendable 21%. On the flip side, disengaged employees cost firms a whopping $550 billion each year. Additionally, an organization may suffer from high absenteeism rates or high turnover due to disengagement. Hence, achieving and sustaining employee engagement should rank high on a company’s to-do list. But how do companies figure out if their employees are truly engaged? 

Accurately measuring employee engagement can be a complex task. However, by utilizing the right metrics, companies can effectively gauge the sentiment of their workforce and pinpoint areas that require improvement. Employee engagement metrics serve as quantifiable indicators that translate employee satisfaction into tangible numbers, providing a benchmark for implementing meaningful changes in the workplace. Discover 10 key employee engagement metrics that organizations can leverage to assess staff morale and make data-driven decisions.

What is Employee Engagement?

Employee engagement indicates employees’ commitment and dedication to their work and the organization. A high-performing attitude, a positive outlook toward business growth, and active involvement in decision-making characterize an engaged workforce.

Engaged employees are concerned about their job roles, responsibilities, and the company’s performance. They feel that their efforts make a difference. Plenty of information and insights regarding strategies to improve employee engagement exist. However, HR leaders must first gauge employee engagement levels to devise a plan for improvement. 

What are Employee Engagement Metrics?

Employee engagement metrics enable HR managers to evaluate the organization’s engagement levels. By analyzing various characteristics and data points, the company can understand the current state of employee engagement, identifying areas for intervention and improvement across the organization.

Top 10 Employee Engagement Metrics for HR in 2024

  • Employee Net Promoter Score (eNPS)

The employee net promoter score (eNPS) gauges the difference between an organization’s most and least satisfied employees. It serves as a powerful metric for monitoring employee engagement and assessing the impact of workplace policies and initiatives on the workforce. This simple scoring system typically relies on the response to a single question: “How likely are you to recommend our company as a place to work to your family and friends?

  • Continuous Employee Feedback Through Pulse Surveys

A pulse survey is a great tool to measure feedback using a short and brief questionnaire. The survey is conducted continuously to gain employees’ views on job-related roles, workplace communication, interpersonal relationships, and the overall work environment. A pulse survey should contain 10-15 questions that can be answered in 5-6 minutes. Employers must communicate the purpose behind surveying for more authentic responses.

Also read: The Go-To Guide To Perfecting The Employee Engagement Survey
  • Voluntary Turnover Rate

An employer may ask employees to leave the organization due to layoffs or downsizing. This is known as involuntary turnover. In other cases, employees may quit the organization on their terms. This is known as voluntary turnover. Low employee engagement is a big reason for a high voluntary turnover rate. HR professionals can compute the voluntary turnover rate as follows:

Voluntary Turnover Rate = Number of employees who left the organization voluntarily in a given period/Number of employees employed during that same period

  • Absenteeism 

Absenteeism is when an employee does not show up at work without applying for leave or informing management beforehand. It is a good indicator of employee engagement and helps assess the level of organizational morale, job satisfaction, and overall workplace well-being. This metric is calculated as follows:

Absenteeism Rate = Number of absences, time-offs availed by an employee, excluding weekends and designated holidays/Number of days worked

  • Employee Retention Rate

Employee retention rate defines the percentage of employees working with the organization in a set period. It can be calculated as follows:

Employee Retention Rate = Number of employees who stayed with the organization through a defined period/Number of employees working with the organization at the start of the defined period. The value, thus obtained, can be multiplied by 100 to obtain the result in percentage.

  • Employee Happiness Index

This survey involves a series of questions regarding an employee’s job satisfaction level and assesses various aspects of their work experience, including workload, relationships with colleagues, opportunities for professional growth, and overall satisfaction with the workplace environment. Some of the questions that may be asked in the survey include:

  • Does the company have defined goals and objectives for each individual?
  • Is there a career advancement program in place for employees?
Also read: 6 Rules For Giving Excellent Employee Feedback
  • ROI on Employee Engagement

This metric aims to quantify employee engagement levels by determining the revenue per employee. It is calculated as follows:

ROI on Employee Engagement = Annual company revenue/Average number of employees

  • Employee Health Index

An employee health index (EHI) is a comprehensive measure of an organization’s employee health and well-being. It is a composite score that takes into account various factors that contribute to employee health, such as physical health, mental health, emotional well-being,

Also read: Unique Ways to Support Wellness in the Workplace 
  • Glassdoor.com Rating

A good Glassdoor rating above 3.5 on a scale of 1 to 5 is generally considered a positive employee perception. Higher ratings (4 and 5) reflect high employee satisfaction and engagement levels.

Additionally, a Glassdoor rating of 4 or 5 suggests that employees are likely to be more productive, innovative, and committed to the organization’s success.

Companies with consistently high Glassdoor ratings are often seen as desirable places to work, attracting top talent and fostering a culture of excellence.

  •  Customer Happiness

Exceptional customer service stems from a foundation of high employee engagement. Engaged employees, who feel valued and connected to their work, are more likely to go the extra mile to deliver exceptional service. This positive attitude translates into prompt responses, proactive problem-solving, and genuine concern for customer needs. By investing in employee engagement, businesses foster a culture of customer satisfaction, loyalty, and brand reputation.

Benefits of Employee Engagement 

  • High Revenue Generation

Engaged employees often go the extra mile to achieve their targets and goals. They are better at dealing with customers and meeting their needs and expectations. This eventually leads to more sales, repeat customers and higher revenues.

Also read: Now More Than Ever: The Need For Staff Appreciation
  • Enhanced Productivity

A high employee productivity rate is pivotal for any business to grow and succeed. A Gallup survey indicated engaged teams are 21% more productive than those with less engaged counterparts.

Additionally, engaged employees are better at innovation. They always have ideas they can contribute to the organization’s betterment. There is increased teamwork quality and collaboration at the workplace, which leads to reaching workplace goals more seamlessly and effectively.

Also read: 5 Tips to Boost Your Small Business’ Productivity
  • Increased Innovation

Employee engagement fuels creativity and innovation, aligning individual aspirations with organizational goals. It empowers employees to surpass expectations, innovate, and contribute their unique perspectives. By fostering a supportive environment that encourages participation, organizations cultivate a culture of continuous learning and idea generation. Investing in employee engagement not only enhances the employee experience but also positions organizations as industry leaders, driving innovation and sustainable success. There are several empirical studies that support the role of employee engagement in driving innovation and creativity.

  • Improved Teamwork and Decision-Making

A recent study by McKinsey reported that 20% of employees feel their organizations excel at decision-making when a diverse range of candidates participate in the process. An engaged and inclusive workforce enables employees to crowdsource decisions from multiple sources, aiding in improved teamwork and a quality decision-making process.

  • Lower Absenteeism

A recent survey by Gallup suggests that engaged workforces have lower employee absenteeism rates than their less engaged counterparts by up to 41%. Regular absenteeism can significantly hamper an organization’s productivity rate. Additionally, it can cause employee burnout due to an increased workload and a shortage of manpower. Engaged employees are less likely to practice absenteeism, as their commitment and satisfaction with their work contribute to a stronger sense of responsibility and dedication to their roles.

  • Fewer Workplace Accidents

Engaged workers are diligent in their work and how it is performed. This results in fewer workplace accidents, making the workplace safer and more productive.

Also read: The Impact Of Employee Engagement On Productivity

Summing Up

Employee engagement metrics offer crucial data points that enable companies to track employee engagement in the workplace. However, choosing the right metrics for identifying the roadblocks is pivotal to ensuring their effectiveness and usability. Implementing and using the metrics system to empower the employee engagement policy at the workplace can be challenging. However, with a sound HRMS platform, businesses can streamline employee engagement.

Engagedly offers a robust talent management platform that enables companies to gauge employee engagement levels, identify loopholes, and suggest areas for improvement. Book a personalized DEMO to learn more about Engagedly.

Frequently Asked Questions

Q1. Why is employee engagement important, and how can tracking metrics help improve it?

Employee engagement is crucial for organizational success as it directly impacts productivity, retention, and overall employee satisfaction. Tracking metrics allows HR departments to measure engagement levels objectively. By identifying areas for improvement through these metrics, organizations can implement targeted strategies to enhance employee engagement.

Q2. How often should employee engagement be measured?

Traditionally, companies carry out employee engagement annually. However, it is recommended that evaluations be conducted more frequently. Companies can conduct quarterly surveys along with weekly or monthly pulse surveys.

Q3. What are some key employee engagement metrics, and how can they be effectively measured?

The employee engagement metrics to track are employee satisfaction, Net Promoter Score (NPS), turnover rate, and participation in professional development programs. These metrics can be measured through surveys, feedback forms, and performance data analysis.


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Author
Srikant Chellappa
CEO & Co-Founder of Engagedly

Srikant Chellappa is the Co-Founder and CEO at Engagedly and is a passionate entrepreneur and people leader. He is an author, producer/director of 6 feature films, a music album with his band Manchester Underground, and is the host of The People Strategy Leaders Podcast. He is currently working on his next book, Ikigai at the Workplace, which is slated for release in the fall of 2023.

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