An employee engagement KPI (key performance indicator) is a success metric that shows how connected employees feel to their work on a mental, emotional, and physical level. Once you start tracking employee engagement KPIs and implementing initiatives to improve engagement, they can also reveal how much progress you’ve made toward specific engagement-related outcomes.
The right set of Employee Engagement KPIs also enables managers and HR teams to create better goal-setting systems, establish clearer goals, and more effectively support line employees with deep engagement data. In this article, we look at what an employee engagement KPI is and why it’s essential for forward-thinking companies.
1. Employee eNPS
The Employee Net Promoter Score (eNPS) was originally introduced to measure customer satisfaction and loyalty levels. It has since been adopted internally by employers to gain similar insights from employees. It asks the simple question: “How likely are you to recommend working for our company to a friend or colleague?”
Generally, the question is answered on a scale of 0 to 10, where those who respond with 0 to 6 are considered detractors, responses of 7 to 8 are considered passive, and a score of 9 to 10 are considered promoters.
It serves as a valuable metric that can indicate overall employee satisfaction within an organization. A high eNPS score suggests a positive work environment where employees feel valued and supported, prompting leadership to leverage these factors across the organization to further improve employee morale and productivity.
2. Turnover rate
The turnover rate reveals the ability of organizations to retain top talent. It measures the length of time employees stay. Rates typically vary from department or team to department, helping employers identify hot spots and problems.
Correlated with other KPIs, turnover rate can reveal the impact of various employee engagement initiatives on well-being and loyalty. By analyzing these relationships, organizations can better understand which programs deliver meaningful benefits and where to allocate resources effectively.
3. Successful hires after the trial period
This indicator shows the percentage of people who remain in the organization after their probationary period, which can say a lot about the quality of the onboarding process. If employees leave after the first 3-6 months, this may mean that they were not suitable for the position or that the company failed to integrate them into the team.
4. Internal promotion rate
One of the key drivers of employee engagement is the opportunity for career growth within the organization. This highlights the importance of the internal promotion rate, as it represents the ability of organizations to retain top employees.
If your focus is human resource management, you might consider the internal hiring rate (employees who change positions internally) and the internal referral hiring rate (new hires acquired after an employee’s suggestion).
5. Employee Satisfaction Index (ESI)
The Employee Satisfaction Index (ESI) is an indicator that allows organizations to measure the link between employee satisfaction and customer experience. Unlike the eNPS, the satisfaction index is based on more than one question. Each question is answered on a scale of 1 to 10, with a higher score indicating a more satisfied employee.
The ESI measures employee well-being. Depending on the questions asked, it can highlight specific areas where employees may be experiencing stress or burnout. By understanding these trouble spots, organizations can effectively guide the implementation of targeted well-being and satisfaction programs, such as stress management workshops or mental health resources, to foster a healthier work environment.
These KPIs also offer insight into how employees perceive their roles and responsibilities within the organization and ways to improve performance. Understanding these perceptions is crucial to addressing dissatisfaction and creating an environment where employees feel empowered and engaged in their work.
6. Online company ratings
Similar to product review websites, there are multiple public sites that allow employees to review their employers. Ratings range from 1 to 5, providing insight into the opinions of current and former employees. Be sure to create an internal communication campaign to encourage reviews on similar platforms.
7. Active users on the intranet
In the digital workplace, active intranet users are an excellent measure of engagement. Intranet tools like LumApps Intranet offer analytics that provide insight into employee posts, likes, comments, and information consumption. Users are considered ‘active’ when they log in at least once per day. This measurement can also be compared over time to track each employee’s onboarding and maturation phase.
8. Employee References
Team members who enjoy their jobs are more likely to speak positively about their experience with people in their network. Creating effective brand ambassadors can be difficult if the overall level of employee engagement is low.
One indicator you can track is employees’ willingness to share corporate news within their professional network. With AI-powered employee advocacy support tools built into LumApps Intranet, tracking employee social activity is simple. Like active intranet users, active ambassadors and employee referrals include team members who have shared content at least once in a given period.
9. Employee Suggestion Box Results
The best suggestions for improving employee engagement often come from employees themselves. This makes collecting employee feedback essential. The first indicator of engagement is the number of actual participants. The second type of information that can be extracted is the number of valuable suggestions that seek to improve productivity. An employee-centric intranet solution, such as LumApps, allows for internal social networking functionality that acts as a shared forum for employee engagement, suggestions, and communication.
10. Absenteeism
Absenteeism is closely related to employee satisfaction. Not showing up for work is a problem for both employees and the entire team. A high rate of absenteeism can indicate low motivation and productivity in the workplace.
Absenteeism rate is a key metric that tracks how often and for how long employees are absent. It serves as an important indicator of the health of an organization and the well-being of its employees. The formula and implications of this rate are as follows:
- Calculation: The absenteeism rate is obtained by dividing the total number of days that employees are absent by the total number of work days available in a given period, and then multiplying by 100 to obtain a percentage.
- Healthy Rate: A generally healthy absenteeism rate is around 1.5%, though this can vary by industry and location. For context, the U.S. national average was reported at 3.6%.
- Meaning: High absenteeism rates, especially those above the national average, may indicate underlying problems in an organization, such as low employee engagement, poor leadership, or job stress.
- Impacts: Excessive absenteeism can lead to reduced productivity, increased costs for hiring and training replacements, and overtime payments for other employees covering for absentees. Management strategies: Monitoring and understanding absenteeism rates is crucial for organizations. Identifying the causes of high absenteeism can inform strategies to improve employee engagement, satisfaction, and the overall work environment.
