Strategic HR

10 employee engagement metrics to track for SMEs

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graphic showing employees looking at engagement metrics

Whatever industry you’re in, keeping employees engaged and motivated is essential for long-term success. This is especially important for SMEs who rely on every team member to contribute their best. However, monitoring employee engagement isn’t just about gauging happiness; it involves tracking key metrics to understand how invested employees are in their work, how satisfied they feel, and how likely they are to stick around. But what are the most important employee engagement metrics, and how do you measure them?

In this article, we’ll walk you through 10 essential metrics to measure employee engagement that will help to give a clear picture of how your workers feel about their roles, as well as the wider organisation. We’ll also explore some actionable tips to increase employee engagement that will help you to foster a thriving, successful workplace.

What are employee engagement metrics?

engagement metrics are key indicators that help businesses to assess how connected, committed and motivated their workforce is. These metrics allow companies to track overall satisfaction, performance and areas for improvement within the team, providing important insights that can help to boost morale while also increasing productivity, retention and, ultimately, profitability.

By keeping track of key metrics for employee engagement, HR professionals can identify patterns and take targeted action to improve the working environment and address issues proactively. From measuring turnover to monitoring development opportunities, employee engagement metrics offer valuable insights into the employee experience and help to create a strong foundation for growth.

10 metrics to measure employee engagement

Let’s take a look at 10 of the most important metrics for employee engagement that HR professionals should be tracking to better understand and improve their workplace culture.

1. Employee satisfaction

Employee satisfaction reflects how content employees are in their roles and within the overall organisation, encompassing elements like job fulfilment, working environment and relationships with colleagues. High satisfaction levels generally lead to increased productivity and lower turnover rates, while low satisfaction can signal issues that may require immediate attention.

To measure this employee engagement metric, conduct regular employee satisfaction surveys with specific questions around job fulfilment, work environment, and managerial support. These surveys provide data-driven insights, allowing you to identify actionable areas for boosting morale and overall engagement. If you identify patterns within the responses, you might consider holding follow-up meetings or focus groups to dive deeper into areas that need improvement.

2. Employee net promoter score (eNPS)

Employee Net Promoter Score (eNPS) is a very useful metric to measure employee engagement that indicates how likely employees are to recommend the company as a good place to work. A high eNPS generally suggests a positive workplace culture and strong employee loyalty, while lower scores could point to dissatisfaction that could impact productivity and retention.

To calculate your eNPS, ask your employees to rate how likely they are to recommend the company to others on a scale of 1–10. This will then identify the number of ‘promoters’ (enthusiastic supporters), ‘passive’ employees, and ‘detractors’ (those who are less engaged). You then need to subtract the percentage of detractors from the percentage of promoters to get your score. Any score that’s in the positive range is good, while 50% or more is excellent. Scores below zero show that there are serious problems that you need to address.

3. Turnover rate

Turnover rate tracks the number of employees leaving your business over a specific period. High turnover can lead to substantial recruitment and training costs, and often reflects broader organisational issues, such as low job satisfaction, insufficient employee benefits, or a lack of advancement opportunities. Keeping turnover rates low helps to maintain a stable, experienced workforce.

To calculate turnover rate, divide the number of employees who left by the average total headcount, then multiply by 100. As a guide, the average turnover rate in the UK is around 35%, although rates vary between industries and length of service. The more regularly you measure your turnover rate, the better your understanding will be of what’s normal for your organisation.

4. Retention rate

Retention rate is another important HR metric for employee engagement, and refers to the percentage of employees who remain with the company over a defined period. High retention rates often signal a healthy workplace and satisfied employees, while low retention rates may suggest issues with job satisfaction or company culture.

To measure the retention rate, divide the number of employees remaining at the end of a period by the total number at the start, then multiply by 100. Analysing retention data can highlight any areas of concern, allowing you to implement strategies to improve company culture, or any other areas that you identify as having a negative effect on employee loyalty and satisfaction.

5. Average tenure

Average tenure reflects the length of time that employees stay with the company. Longer tenures often correlate with higher employee satisfaction and engagement, while shorter tenures signify that you might need to focus on retention and optimising the employee lifecycle as part of your ongoing HR strategies.

To calculate average tenure, add up the total years of service for all employees and divide by the number of employees. It’s important to also review tenure by department or role, as this can help to identify patterns that will help to highlight specific areas of friction. For example, average tenure for lower-paid roles may be lower than for those with a higher salary.

6. Absenteeism

Absenteeism is an employee engagement metric that measures the amount of unscheduled time off taken by individuals. High levels of absenteeism can indicate burnout, lack of engagement, or even organisational issues affecting employee health and wellbeing. Bank holidays, annual leave or non-working days such as weekends or days that the employee isn’t scheduled to work don’t count towards absenteeism.

To calculate absenteeism, divide the total days missed by the total workdays available and multiply by 100. When analysing results, make sure to consider factors such as department, workload and employee feedback on job-related stress. Regularly monitoring absenteeism can help you to address potential issues before they escalate, fostering a more engaged workforce.

7. Professional development

Professional development gauges how well the organisation supports employee growth and skill enhancement. When employees feel that they have opportunities to learn and advance, they’re often more engaged, motivated, and likely to stay with the company.

To assess professional development, explore participation and completion rates in training programmes, and track promotions by role, department and tenure. You can also use employee feedback to understand individual development needs and interests, helping to tailor opportunities that align with both employee and company goals. Offering courses through e-learning is a cost-effective way to support professional development and increase engagement.

8. Quality of work

Quality of work evaluates how well employees perform their duties, which can be an indicator of engagement and job satisfaction. Consistent high-quality output often reflects a motivated and focused team, while frequent errors or declines in quality may signal disengagement.

Key methods for measuring quality of work include performance appraisals, peer reviews and regular feedback sessions. These assessments should focus on specific, measurable objectives that are aligned with organisational goals. Addressing quality issues early on can prevent bigger problems in the future and help employees to feel more supported in their roles.

9. Work-life balance

Work-life balance reflects how well employees manage their professional and personal lives. When work-life balance is poor, it can lead to burnout, absenteeism and decreased productivity. Organisations that support a healthy work-life balance tend to see higher levels of engagement and overall morale. This is one of the more difficult HR metrics for employee engagement to quantify, and takes more analysis than some of the other factors we’ve explored.

To gauge work-life balance, monitor indicators such as overtime hours, absenteeism rates and feedback from employees on their levels of stress. Organisations that offer flexible or hybrid working arrangements often find that employees experience a healthier work-life balance, so this could be a consideration if your analysis shows that this is an area that needs improvement.

10. Employee benefit uptake

Employee benefit uptake tracks the percentage of employees using available benefits, helping you to understand whether the benefits you offer are meeting employees’ needs. Low uptake may indicate that benefits aren’t aligned with employee preferences, or that individuals aren’t aware of their availability.

To measure uptake, compare your benefit offerings with actual usage rates to identify underused schemes that might not be offering value. It’s also helpful to survey employees to ask what benefits they would like to receive, and whether their needs are being met. Adjusting offerings based on these findings can boost satisfaction and engagement by showing that you value your employees.

5 essential strategies to increase employee engagement

Once you’ve analysed your HR metrics for employee engagement, it’s time to take action. Improving employee engagement takes a proactive, thoughtful approach and requires an ongoing effort and regular monitoring of your key engagement metrics.

Let’s look at five essential strategies that can boost employee engagement and foster a positive workplace culture.

1. Carry out employee engagement surveys

Conducting regular employee engagement surveys provides individuals with a platform to share their perspectives, concerns and ideas. These surveys should cover areas like job satisfaction, management support and workplace culture, and include questions that invite constructive feedback. By analysing the responses, you can identify trends and problem areas, helping you to implement targeted changes.

2. Check in with your employees

Frequent check-ins demonstrate to employees that their wellbeing and satisfaction are top priorities for your organisation. Whether carried out as one-to-one conversations or team meetings, they provide opportunities to discuss workloads, individual goals and challenges in more detail. As well as allowing managers to address issues early, regular check-ins help to enhance performance management initiatives and foster a supportive environment that encourages open communication.

3. Utilise 360-degree feedback

360-degree feedback gathers perspectives from an employee’s peers, direct reports and managers, offering a comprehensive view of their strengths and areas that need development. This feedback is especially valuable for understanding interpersonal skills, collaboration and other aspects that can affect engagement. By incorporating 360-degree feedback when measuring employee engagement metrics, you can create improvement strategies that reflect well-rounded, unbiased insights.

4. Monitor social interactions

Observing social interactions within the workplace, whether during meetings, informal gatherings, or through internal communication tools, can reveal the level of teamwork and camaraderie among employees. Strong social connections often lead to higher engagement and a more cohesive company culture, which offers many benefits for employees and employers alike. Consider implementing cross-departmental projects or team-building activities to encourage positive interaction and foster healthy informal communication.

5. Conduct exit interviews

Exit interviews offer valuable insights from employees who are leaving the company, giving you an honest look into what may have influenced their decision. These conversations can uncover recurring issues or gaps in the employee experience, which can then be addressed to improve retention and engagement. Exit interview data can be especially helpful for fine-tuning processes and making changes to keep remaining team members satisfied.

Track HR metrics for employee engagement with PeopleHR

Understanding and monitoring employee engagement metrics is vital for building a motivated, loyal, and high-performing team. By regularly tracking and analysing HR metrics for employee engagement, businesses can uncover key insights that will empower them to improve the employee experience and improve profitability.

PeopleHR offers a wide range of tools that can help to streamline internal processes, centralise information for easy analysis, and support your engagement efforts. From employee benefits platforms to performance appraisal software, we’ve got a fully integrated suite of HR systems designed to help you get the most out of your workforce.

To explore how PeopleHR can help you to track and improve metrics for employee engagement, feel free to schedule a demo or contact us to discuss your business needs in more detail.

 

Gareth Moss
By Gareth Moss New Business Sales Team Leader

Gareth Moss is a New Business Sales Team Leader with nearly a decade of experience in the Access PeopleHR product. Gareth specialises in serving those within the SMB market, and his passion lies in helping businesses streamline their HR operations. Before transitioning into his current role, Gareth was a HR software product trainer, making him your ‘go to’ guy for all things PeopleHR.