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EMPLOYEE ENGAGEMENT KPI

An Employee Engagement Key Performance Indicator (KPI) is a tool to measure


employee’s engagement and analyze how well a business is meeting its goals. Firms
apply KPI at various levels to assess their success. There are two types of KPI’s: high-
level and low-level. High-level KPI centers around the complete performance of the
organization, whereas low-level KPI focuses more on a particular process or an
employee of different departments like the marketing or the sales department.

Some employee engagement KPIs are:

1. Employee Net Promoter Score: It evaluates how likely an employee is to


recommend their organization as a place to work. This is determined by calculating
the difference between the percentage of promoters and detractors.

Employee NPS= (promoters - detractors)/ total respondents

2. Retention/Turnover: The turnover rate helps to analyze the tenure of the workers
who quit. By maintaining a turnover rate, the company can focus on departments
that need more attention, especially where employees are not having a good
time.

Turnover rate = (Total number of employees who have left the organization) /
(Total number of employees at the beginning of the period)

According to market research, you should keep a target of 10% or less annual
turnover rate for your organization.

3. Absenteeism: The absence rate is related to the employees' interest. A high


absenteeism rate represents a low motivated individual in the workspace.

Absenteeism rate = (Total number of absent days per employee) / (Total


number of working days) x 100

4. Profitability/Production: When employees are not engaged with the business, it


results in less business growth. If production is slow or sales are down, low
engagement is the issue for sure.

The research conducted by Gallup shows how much more profitable and
productive an organization can be if it takes care of employee engagement.
5. New Hire 3 Months Failure Rate: Employee engagement is a mindset, and you
can engage your employees with your business by providing proper training and
tools. If new employees are leaving the company within the first 90 days, either they
are not happy with the policies or they are not the right hire.

6. Client Happiness: Happy employees means happy clients. It determines your


client NPS (Net Promoter Score). If your client NPS is low, low employee
engagement is the reason that is affecting your customers' happiness.

Research shows that 48% of the employees are ‘unhappy’ or ‘somewhat happy’ at
their workplace.

7. Employee Suggestion Box: Employee suggestion box lets your employees put
their point of view in front of employers or management. Better employee
engagement means they can give valuable suggestions and insights to enhance
productivity.

A survey done by CareerBuilder demonstrates that 48% of the employees said that
asking for suggestions and feedbacks and then putting them into action will
automatically decrease the possibility of voluntary turnover.

8. Health Care Cost of Employee: It provides with a better understanding of all


elements of an organization’s health care plan. It is evaluated by the total amount
of health care costs divided by the total number of employees.

9. Productivity Rate of Employees: It helps to evaluate the productivity of an


organization over time. It is calculated by the total revenue of the company
divided by the total number of employees.

10. Return on Investment: A company should make sure that the money you are
investing in training employees of some value. The ROI is determined by the profit
per dollar invested in social compensations divided by the wages.

11. Retirement Rate: To evaluate the retirement rate is crucial for any firm which is
building up a strategic workforce plan. It is determined by the number of
employees who have retired as a percentage of the headcount.

12. The Average age of Retirement: It is calculated by the estimated age of all the
employees retiring divided by the number of employees retiring. It is important to be
aware of such trends as it helps to predict retirement and plan employee
replacement in advance.
13. Diversity Rate: It helps to observe how successful an organization is when it
comes to establishing an environment that supports an accepting and an open
community.

14. Satisfaction with the Hiring Process: This gives an outlook on how well the process
of hiring works from the perspective of an employee. It also helps to reflect on the
growth of an organization.

15. The Rate of Attrition: It evaluates the retention rate. It helps the company to find
out how successful they are at preserving skills. It is calculated by dividing the total
number of employees who have left the organization in a given period by the
average number of employees in that particular period.

16. Internal Promotion Rate: It demonstrates the retention of employees by an


organization and the growth of top performers. Can be calculated by dividing the
number of employees promoted by the total number of employees.

17. The Rate of Internal Job Hires: It helps to indicate the effectiveness of skills and
talent development in the organization.

18. Satisfaction from Benefits: This lets the firm to analyze the satisfaction level of the
employees from the benefits offered to them. Satisfaction of employees can be
evaluated by breaking down each benefit and using surveys.