Employee engagement is a relatively recent phenomenon, gaining traction since around the early 1990s. From its early days to now, there’s conclusive proof that actively disengaged employees can cost enterprises between $450 and $550 billion a year in lost productivity.
This is a significant amount and should not be overlooked. Stick around to find out more about employee engagement—what it is, why it matters, how it’s measured, and new metrics to consider.
What is employee engagement?
Arriving at a definition of employee engagement can be difficult. That’s because it’s often confused with employee happiness and satisfaction. However, it’s neither of these things. Identified as a psychological state, employee engagement has been grouped into four categories, according to scientific research.
These include personal role, work, and multidimensional engagement as well as self-engagement with performance.
The first of these categories essentially looks at an employee’s ability to express their “preferred selves” in their work—cognitively, emotionally, and physically. Higher levels of expression result in higher levels of engagement (energy, vigilance, and connection with others).
The second category looks at absorption within and dedication to one’s work. Multidimensional engagement looks at cognitive, emotional, and behavioral aspects of work. And finally, self-engagement with performance looks at employees’ regard for high performance.
What are the benefits of employee engagement?
Metrics are used to measure employee engagement. What they have shown is that employee engagement is highly beneficial to organizations. In fact, there is a correlation between positive employee engagement and organizational performance. This is illustrated by the following benefits:
- Higher levels of employee retention resulting in lower hiring costs and retained organizational knowledge
- Higher levels of employee and organizational productivity through a greater investment in one’s work
- Higher levels of employee satisfaction, which increases engagement and contributes to a more productive, positive, and happy workforces
- Improved organizational culture, enabling you to attract top talent
- Enhanced recruitment levels as employees serve as your brand ambassadors and learning from engaged employees can streamline your onboarding process
- Greater levels of profitability through innovation, commitment, and a greater focus on customer service
- Higher levels of employee loyalty and lower absenteeism, meaning your team stays with you over the long term
- More customer satisfaction through improved customer service and call center communication for repeat business, customer loyalty, and referrals
- Innovation through creative thinking and ideas that contribute to organizational improvements
- Structured onboarding and training, guided by an employee training checklist, can significantly boost engagement and productivity.
- Reduced burnout and improved employee well-being to reduce health-related absenteeism
- Stronger leadership development, which enables you to identify future leaders and promote from within
- Improved compliance with regulatory requirements for some industries and organizations, required by law to measure these metrics
How they’re measured: The purpose and types of employee engagement metrics
The purpose of employee engagement metrics is to help organizations better clarify expectations and facilitate a connection between employees and the organization’s goals.
Furthermore, they can help senior members of your team spot internal opportunities that can help employees grow into internal roles while receiving support on a personal and professional level.
Moreover, they can help identify areas for organizational improvement as the workplace also becomes more inclusive. These factors, in turn, can increase employee morale and motivate them to give their best, ultimately helping the organization grow.
Speaking of the benefits and purpose of these metrics, which ones have headhunters and organizations measured to date? Some of the most common ones are both qualitative and quantitative and they include:
- Employee performance and productivity rate
- Absenteeism and turnover rates
- Overall employee satisfaction through the Employee Satisfaction Index (ESI)
- Measuring eNPS (Employee Net Promoter Score)
- Employee well-being rate and resilience
- Employee advocacy rate
- Sentiment analysis
- Task completion rate
- Customer satisfaction rate
- Employee retention rate
- New hire 90-day failure rate
- Recognition from within the organization
- Survey participation rate
New employee engagement metrics that count
While it is true that organizations need to consider a mixture of both quantitative and qualitative employee engagement metrics, not all metrics are created equal. This means that some are outdated for current organizational environments and this means that new employee engagement metrics are emerging. Let’s explore some of these now:
- Technology adoption rates to boost self-development and productivity: Technology can certainly make employees more productive. If your organization uses a mobile collaboration platform and built-in analytic and tracking features, this can help employees feel more engaged, too. For success with technology, you need to ensure that it offers features such as an intuitive interface, mobile flexibility, a digital training and onboarding library, an analytics dashboard, etc.
- Artificial intelligence (AI) adoption: This can be a part of your tech stack. For example, using an AI-enabled integrated system can foster a collaborative, data-driven, and fund work environment. This results in increased productivity and performance and enhanced employee engagement.
- Engaging leadership in talent mapping: This has been proven to not only boost employee engagement but lower training costs and increase productivity. This happens when Human Resources (HR) processes are aligned with a business’s talent-to-value efforts.
- Diversity and inclusion (D&I) rate: Measuring this metric is important because it shows how welcome your company culture is and it is great for attracting top talent. What’s more is that organizations with greater levels of D&I are more innovative and can steer through challenges better. Any gaps should be identified and you should look to address these at senior leadership levels as well as at the board level, so consider offering diversity and inclusion training.
- Corporate social responsibility (CSR): When an organization acts outside of its scope of business to help communities, its industry reputation improves. As such, organizations with greater CSR efforts have better reputations and this leads to employees that want to remain engaged with such organizations because they feel greater pride and because they are more aware of their economic, societal, and environmental impact.
- Trust and respect for senior management: Measuring trust and respect quantitatively can be hard. However, it’s an important emergent criteria for measuring employee engagement. This criteria refers to how much employees feel trusted to carry out the work assigned to them and whether they have positive professional relationships with their senior management, who they feel respect towards. The reason behind this is that decisions made by senior leadership affect employees. When employees trust their leaders to make the best decisions under the circumstances, they feel more identified with the organization.
- Recognition: Employees that are publicly recognized for their efforts, accomplishments, and contributions are more likely to stay. This is an indirect and significant employee non-financial retention strategy that has positive implications for employee engagement. In other words, when employees feel valued and are recognized for a job well done, they are more likely to stay. This is why a growing number of organizations are introducing employee recognition programs.
- Feedback: Our final metric for employee engagement centers around feedback. Giving employees feedback that is specific, relevant, and timely is an essential element of avoiding misunderstandings or confusion that relate to expectations and performance. Remember that feedback is a two-way street and that it should be actionable and provided in a delicate manner. The relevance of feedback is critical because it can boost job efficiency, minimize wasted work, and improve overall internal communication.
- Security in Employee Engagement: Creating a safe workplace is vital for a productive and engaged workforce. This includes physical security, data protection and privacy compliance. Cybersecurity awareness and incident response plans are crucial to prevent data breaches. These measures not only shield the organization but also instill trust in employees, allowing them to work without worry. Integrating cost-effective options, like affordable SSL certificates, into the employee engagement strategy fosters a secure atmosphere. This, in turn, boosts engagement, productivity, and commitment.
Conclusion
Measuring employee engagement is a necessary part of ensuring your organizational ship is steered in the right direction.
However, outdated quantitative metrics are insufficient to achieve this goal.
Taking qualitative metrics that count into account is a surefire way to boost your organizational efficiency and ensure your employees remain engaged, competitive, and productive.
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