People analytics

Best HR employee engagement metrics and KPIs for 2023

Iryna ChornaContent writer7. May 20237 min read

Employee engagement metrics are essential as they help HRs keep the insights on how connected, committed, and motivated employees feel under the radar. Engaged employees bring extra value to their work and to the entire organization, as they stay emotionally committed to their team and company’s vision and goals. With the COVID-19 pandemic turning the world upside down, employee engagement has become even more critical than ever before.

One of the new norm’s essential components, migrating to the remote work model is a double-edged sword when it comes to employee engagement. According to a McKinsey survey among US-based employees earlier this year, most people find remote work no less engaging and productive. However, that may look the opposite for other employees. Many people experience other challenges caused by the changes. Thus, HRs need to keep an eye on the state of things and do the “check-ups” often. What are the vital employee engagement KPIs to track regularly?

Measuring employee engagement

While the metrics we’ll explore in this blog post are equally important to track on, some of them require special attention in these uncertain times when people are still amid the pandemic. Let’s take an overview of the essential employee engagement metrics, take a brief recap of how to measure them, which tools to use to collect the metrics, and what kinds of insights they provide.

Employee resilience

Resilience is a crucial capability allowing employees to manage and adapt to a continually changing environment. A resilient employee will most likely stay long with the company, and vice versa low resilience score indicates the risk that an employee will leave in a while.

Indicators that help identify employee resilience include self-efficacy, social support, and optimism in the company’s future. Typically, there’s a significant gap in resilience between the employees who intend to stay with the company for at least 3-4 years and those who will most likely depart in less than one year.

How to measure employee resilience

To measure resilience, you’ll need to put together various indicators gathered through tracking polls and surveys.

Specifically, such surveys need to be focused on how much the person expresses the company and leadership commitment, agrees with the work scope relevance, has the opportunity to keep the work/life balance, and alike. Here are several examples of questions to check-up employee wellbeing and resilience:

How do you find your current work environment?
How do you manage to balance your personal and work time?
How is your routine? How are you connecting to other teammates?
Is there anything you would like to discuss or need help with?

Typically you can use a 1-5 scale and offer employees to score their responses. Apparently, a higher total score shows the employee feels content and intends to stay with the company, while a low score reveals risks requiring further action.

Absenteeism

This is another critical metric to keep an eye on. Absenteeism means chronic or habitual workplace absence, often spontaneous and unapproved. Of course, employees can experience force-majeure personal or family issues. However, when their absence becomes a pattern, it may be a time to raise red flags.

How to measure absenteeism

To identify the working hours missed as well as sick leaves and off days taken frequently and unannounced, you can use a tech solution that automatically tracks working time. At this point, it’s essential to separate unexcused absences from approved ones.

With all the necessary information in hand, use the following formula to identify the percentage of absenteeism then:

((# of unexcused absences)/total period) x 100 = % of Absenteeism

Now, how to interpret the percentage you get? Basically, there’s no commonly fixed value for absenteeism that would be considered good or bad. On the other hand, zero absenteeism is a tall tale. What you need to pay attention to here it’s how critical the percentage you get is for your domain’s specific context and its impact on overall productivity.

By tracking absenteeism, you’ll be able to fix it and evaluate further improvement.

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Net promoter score

Net promoter score, or NPS, is also one of the crucial employee engagement metrics essential to check regularly. Knowing the NPS helps the company power up its employer brand and understand its unique value proposition’s core building blocks.

All this valuable information comes from the straightforward question addressed to the employee: How likely would you recommend our company as a place to work? People who are willing to recommend and sound passionate are seen as promoters, hence the name of these metrics.

How to measure the NPS

When asking your employees to what extent they are open to recommend the company they work for, offer them the 1-10 scale to relate their response. Once you get the responses, split them into three groups:

9-10 are your 100% promoters
7-8 are neutral
0-6 are detractors

However, when it comes to a large organization, you want to know the “average temperature” across the company rather than point replies. To calculate the overall score, use the formula:

% of total promoters – % of total detractors = NPS

Good or bad NPS scores differ significantly across the industries. But you can move forward using these benchmarks:

>30 is considered a neutral/good NPS
<30 indicates the company is doing really great

Employee turnover rate

Employee turnover rate (ETR) remains essential at all times. High ETR signals that something is not right: whether internal policies and processes push people to leave the company, or the cause may relate to the hiring mistakes. To keep up with the healthy turnover rate, measure ETR monthly, quarterly, and annually.

How to measure the turnover rate

ETR considers the percentage of employees who left a company within a certain period. Hence, you can calculate it using this formula:

(Number of employees who left the company / average number of employees) x 100 = % of ETR

Just as with other metrics enlisted above, there’s no all-size-fits-all ETR rate, yet the percentage between 10 and 30 for different business domains indicates that the company does well. Once you know the turnover rate, it’s crucial to keep this figure as little as possible, and technologies can help you much in this. If you’re looking for ways to manage turnover in your organization, look at how HRForecast retention & attrition solutions can help your organization.

Employee engagement rate

To close the loop of key employee engagement metrics, let’s take a brief overview of the employee engagement rate itself. Employee engagement measures the employee’s emotional attachment to the company, the enthusiasm to advocate for the organization, and resilience, which we’ve touched upon earlier. Overall, it can be considered employee satisfaction metrics. Depending on employee engagement rates, organizations can devise smarter employee benefits, engagement campaigns, etc.

How to measure employee engagement rate

It can be effectively measured based on responses to four questions:

Two focused on emotional attachment (intrinsic motivation and pride in an organization)
Another two measuring the behavioral factors (intent to stay and referral behavior)

Responses are most commonly rated on a 1-5 scale from “strongly agree” to “strongly disagree.” The average engagement rate across the company is calculated by identifying the percentage of respondents who agreed with all engagement measures and employees who have neutral or negative responses and are not fully engaged.

The insights into employee engagement rate provide HRs with the foundation for analyzing the factors driving or blocking engagement and further actions to increase this rate.

Final thoughts on employee engagement metrics

As we’re entering another year accompanied by the pandemic’s echoes, there’s a lot of work to do towards better employee engagement. Thus, along with keeping employee engagement KPIs under the radar, it’s important to move forward to the action plan to improve rates and scores, but most importantly, people’s real wellbeing, satisfaction, and emotional attachment to their work, teams, and organizations.

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