How do you measure employee happiness?

What makes your employees happy will likely vary from individual to individual. There’s also no one formalised way of measuring employee happiness, but employee satisfaction or engagement metrics can provide a general overview of whether your employees are leaving, or whether they’d promote your company to others. Combined with employee satisfaction surveys that provide you with reasons for why employees feel a certain way about their job and workplace, you can spot general trends in employee satisfaction as well as individual concerns.

While your employees might have differing needs based on their own circumstances, it could be that your employees reach a consensus on certain issues regarding flexibility and pay. In this case, you might decide to look into whether it’s possible to provide bonuses or raises, or additional perks such as flexibility.

You can also get an idea of how employees find their job during one-on-one meetings. However, an anonymous survey might help you get a better indication of your employee’s real feelings about a role – they might find it easier to provide feedback that way. To gather this information from employees during a meeting, it’s worth approaching this in a way that helps employees to open up and sincerely address issues that are on their minds. 

What factors can affect your employee’s happiness at work?

When you have a good idea of what keeps your employees happy, it’s easier to tap into what keeps them motivated and engaged. A study by the University of Oxford found that happy workers are 13% more productive, including working faster. They do not necessarily work more hours than their unhappy colleagues, rather, they use their hours at work more productively.

However, the same study found that there is plenty of room for improvement in the happiness of employees when they are at work. Factors that influence employee happiness might include the following:

• work-life balance
• career progression opportunities
• offering a living wage
• a positive working environment
• reward and recognition including perks
• retirement plans
• team building and social opportunities

What your employees look for in a workplace might change over time, and depending on what stage of their life they are at. Older employees might be looking for a strong retirement and pension plan, whereas employees with young families or caring responsibilities might be looking for a greater degree of flexibility. 

Employee happiness as a metric

We’ll now look at some ways you can measure employee happiness as a metric. You might want to utilise some employee satisfaction metric measuring techniques to help you measure this in a way that’s meaningful. Some employee satisfaction measurements include the following:

• employee net promoter score (eNPS)
• absenteeism
• employee turnover
• employee satisfaction index (ESI)

By combining these measurements together, you might be able to get a much broader, more useful picture of how happy your employees are, including how happy they are as part of their team and whether they can see a future working for your company. 

Qualitative ways to measure employee happiness

While many metrics will provide a quantifiable score, it’s useful to stack this alongside qualitative ways of measuring employee happiness. This could be via a satisfaction survey, where you ask employees to provide a response to each question so that the scores they provide come with a reason behind their response. After all, if an employee says that they are very unhappy about certain aspects of their work, then it’s useful to know why they feel this way.

Employee net promoter score (eNPS) measurements 

The eNPS gives you an indication of how much your employee is willing to advocate for your company to friends and family. You can measure the eNPS using employee engagement surveys. Some strengths of using the eNPS to measure employee satisfaction include the following:

• it provides a quantifiable score
• it helps you to track employee satisfaction over time
• it means that your employees can provide anonymous responses

However, it might not tell you exactly why an employee is unsatisfied. This is something that you’ll have to explore using other measurements or by having conversations with your teams. It is important to not be too reliant on quantitative data alone. 

The eNPS is measured by assigning a score to promoters (employees who would promote your company), passives (employees who are neutral about promoting the company) and detractors (employees who would not promote your company). You can calculate an eNPS using the following formula:

Percentage of promoters minus percentage of detractors = eNPS.

This means that any passive scores are not counted in the formula. The score can range from -100 to +100, and is usually measured over a certain period of time (such as a month). The average eNPS score for companies is +32, and companies considered excellent usually have a score above +50.

Absenteeism

Absenteeism is another quantifiable metric that gives you insight into how many days of unplanned absence your employees have during a given period of time. You can calculate your company’s absenteeism rate by taking the total number of absent days and dividing them by the number of available working days during a given period of time. Your employee’s absent days are any days that your employee fully takes off, and it’s useful for your human resources team to keep this on file.

Employee turnover

Employee turnover provides you with data on how many employees have left your company during a given period of time. You can measure employee turnover monthly by dividing the number of employees who have left in a month by the average number of employees during that month. Then, by multiplying that total by 100, you can find out your employee turnover rate.

Employee turnover rates can give you an idea of whether employees are leaving at a higher or lower rate than usual, which could indicate how happy your employees are when combined with other data. However, as this data is quantitative not qualitative, it won’t tell you the reason why your employees are either staying or leaving, making it less useful when used by itself.

Employee satisfaction index

Also known as the ESI, the employee satisfaction index gives you an indication of how satisfied an employee is with their job. The index includes questions relating to whether the workplace meets their expectations and whether their current work is their ideal job. When responding to ESI questions, employees are usually asked to provide a score from one to 10, where one is the least satisfied and 10 is the most satisfied.