How to measure employee engagement and why it's important

By Indeed Editorial Team

Published 29 April 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Employee engagement is an important metric for business owners and managers to be aware of, as engaged employees are typically happier and perform better. It's essential to measure employee engagement so that you can optimise engagement levels and work to create a work environment that's conducive to success. There are multiple components involved when measuring employee engagement and being aware of each of them can help you maximise engagement levels. In this article, we define employee engagement, discuss its importance and offer some advice on how to track and improve employee engagement within your business.

What is employee engagement?

Employee engagement describes how immersed employees are in their work and whether they actively engage with tasks or whether they simply wait for a manager to direct them. Engaged employees typically perform better because they proactively seek tasks and help drive companies forwards, whereas disengaged employees can be more of a liability. Both companies and employees benefit from high levels of engagement, as when employees engage themselves, they typically enjoy their work more and produce better results.

Companies can encourage engagement by providing feedback, giving them growth opportunities and commending them when they do good work. Organisations seek to increase engagement levels because it boosts their profitability and staff retention rates. It also creates a positive working environment where staff feel appreciated, and this can make companies attractive places to work.

Related: 20 fun team meeting ideas to boost engagement and productivity

How to measure employee engagement

Here are some specific ways to measure employee engagement:

Hold exit interviews

These are interviews with staff who are departing from the company that aim to discover why people left. You may discover that someone wants to leave because of no fault on the company's part and that they've simply found another opportunity elsewhere that aligns with their career goals. Typically, employees have a specific reason for leaving, and a number of these reasons may relate to engagement. If a person's work doesn't feel sufficiently challenging or motivating, this is likely an engagement problem that you can investigate further.

Track output metrics

While these don't relate specifically to engagement, productivity levels are the result of good or bad engagement levels. This means that if your productivity levels are down as a whole, you may have a problem with engagement levels that you can then work to solve. A lack of engagement can result in people turning up late, wasting time during the day and overrunning on break time, all of which negatively impact output. Devising ways to engage your employees while keeping track of output metrics is a good way to measure whether the changes are having an effect.

Focus on retention rates

If you have a high staff turnover rate, you may have a problem with disengaged employees. Engagement rates and retention rates typically strongly correlate, in the sense that when engagement rates are high, retention rates are similarly high. This means that focusing on either of these metrics individually positively impacts the other metric. Exit interviews are a good way to find out why people leave and uncover problematic patterns that you can then address.

How to create an employee engagement strategy

Here are six helpful steps for measuring and improving employee engagement:

1. Choose a goal and work backwards

Before planning your engagement strategy, determine what outcomes you want the initiative to produce by liaising with the leaders of the company. Potential goals include improving productivity, making workplace culture more effective or developing employees. Select a realistic goal that supports the company's wider goals and is as specific as possible. After you've settled on a clear objective and ways to measure progress towards it, start devising smaller stages that help you move towards your goal.

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2. Create a focus group

After deciding on a suitable goal, create a focus group to help create the criteria for success and assist managers in measuring the progress towards the goal. These groups normally include a mixture of managers and employees from various departments, typically in small groups of around five to ten people. By using relatively small groups, people are more likely to be open and honest with each other, as large crowds can be intimidating to address.

Sharing your objectives surrounding the engagement strategy allows you to gather feedback and ideas from employees. This can help you design the strategy. Following your discussion about the strategy objectives, decide how to measure progress towards the goal and how to define success.

3. Develop a survey

You can get a good idea of your company's current engagement levels by handing out surveys or polls. You can likely distribute these at scale via email, or by handing out physical copies if your company is relatively small. It's important to get a large sample of responses, as this provides a more in-depth understanding of the prevailing attitudes of staff and the workplace culture.

You can ensure the answers you receive are meaningful by asking specific questions that reveal important information about engagement levels. Making the results anonymous can encourage honest responses from staff, which is essential for gathering an accurate illustration of the situation. Ensure staff have enough time to complete the survey, as this can encourage them to think about their answers properly. You can also send deadlines to ensure they complete them on time.

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4. Measure the data

After you've collected the completed surveys from your team members, it's time to process the data to reveal meaningful information that can help with your engagement strategy. You can display data visually by producing pie charts and line graphs, as these are easy to create and easy to comprehend. These tools are also useful when multiple people collaborate on the data analysis.

Consider your initial goals and expectations when reviewing the data, as this reveals whether you need more surveys to produce conclusive results. If it's fine for staff to see the results, consider showing them to gauge their reactions and opinions. They may be able to add depth to the results by explaining answers or giving more information.

5. Communicate the results

Once company leadership and the focus groups have compiled and translated the data, consider summarising the results of the survey and sharing this information with employees. This communication can help provide a level of transparency into the measurement process, which can make staff feel more involved in the outcome. Consider holding a meeting to share the results or schedule a conference call at a time that works for most of the staff.

Whichever way you choose to include your employees in the process, communicate how company leaders plan to use the data to create an effective engagement strategy. These efforts show a sustained commitment to your employees that may improve how they view management and the company.

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6. Continue to follow up

Once companies have set goals for improving engagement, it's important that they remain a top priority for managers and employees alike. Encourage supervisors to have one-on-one listening sessions with members of their teams to determine whether the company is meeting the engagement goal. When employees leave the company, include questions related to employee engagement in the exit interviews. These conversations with both current and outgoing employees can be vital as a company looks to reshape its engagement strategy.

Read more: 8 fun activities at work to increase team motivation

Why is employee engagement important?

Companies that emphasise the importance of employee engagement see various benefits, namely significant cost savings associated with recruitment and training. This is because engaged employees typically enjoy their jobs more, take pride in their work and stay with their companies longer, meaning their employers have low staff turnover rates. It's important for companies to work on engaging their employees through engagement strategies, as this helps them keep staff motivated and prevents large problems arising from a lack of engagement. It also helps companies gather important data on how staff feel at work.

Effective engagement strategies also improve rapport between employers and employees, as it demonstrates attention and concern for their professional development. It also shows you're actively trying to improve their working environment at work, which can make them less likely to take sick days and have time off. Staff may reciprocate this appreciation and work hard in response, demonstrating a sense of loyalty to the business and a desire to help it meet its overarching goals.

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