Effective Ways to Measure and Improve Engagement at Work

Employee engagement can have a massive ROI for your business—but only when leaders make a concerted effort to improve it. 

Many leaders are under the impression employee engagement doesn’t have an ROI, so it gets shelved when times get tough. However, engagement has a strong impact on nearly every aspect of your business, and by investing in it, you can improve your ROI.

With employee engagement levels steadily dropping, understanding engagement in all forms is the first step to improvement. That way, you can see where your employees are and where you should invest your efforts.

Simply put, employee engagement needs to be a focus for every business and every leader—and we’ll explain why and how to measure employee engagement.

What Is Employee Engagement?

Employee engagement is the level of devotion, care, and commitment each employee feels toward their workplace and job. 

Engaged employees: 

• Are excited to go to work
• Care about helping the company attain its goals 
• Frequently exceed expectations without excessive oversight
• Discover ways to help those around them
• Help build a fun, inclusive, and collaborative culture

Disengaged employees lack interest, care, or focus at work. In other words, they: 

• Only do the bare minimum of what’s expected
• Don’t care about the success of the company, nor are they interested in what the business does
• Have negative, apathetic attitudes toward their work, the company, and their coworkers

Why Measure Employee Engagement?

Measuring employee engagement is a proactive step toward optimizing all facets of your workplace. 

Let's explore some specific stats that hit this home.

‍

Employee Engagement Improves Productivity By 17%

A Gallup study shows that companies with high levels of engaged employees are 17% more productive. When employees care about their work and feel committed to the company, they naturally work harder to push for success. 

Employee Engagement Raises Profitability By 21%

The same Gallup study found companies with high numbers of engaged people were 21% more profitable than those with disengaged employees. More effort and care mean more sales and money—talk about a simple way to improve your bottom line.

Employee Engagement Lowers Turnover By 31%

Deloitte found that companies with a culture of recognition and appreciation, which are engagement factors, have a 31% lower turnover rate. By engaging employees from top to bottom with recognition and support, you can fight the effects of the Great Resignation.

Employee Engagement Reduces Absenteeism By 81%

Absenteeism hurts productivity, performance, and profits. The cost of absenteeism per employee is between $2,660 and $3,600 every year. However, companies with highly engaged employees can enjoy an 81% difference in absenteeism. It’s simple: When employees care about work and are invested in what they do, they show up.

Employee Engagement Increases Sales By 20%

Highly engaged companies enjoy 20% higher sales compared to their counterparts. That’s because engaged employees are more motivated to push the company toward success.

Key Metrics to Measure Employee Engagement

You understand the significant awesomeness of employee engagement and have the green light to invest in it. But what are the ways to measure employee engagement to assess the impact of your efforts?

Let’s delve deeper into employee engagement metrics.

1. Productivity

Productivity reflects the amount of work or output produced over a given time. When employees are engaged, they are more likely to take initiative and be productive. 

Here’s the way to measure productivity:

Total output ÷ total input

• Output = the amount generated in goods or services ($500,000)
• Input = the number of labor hours required (3,000)
• 500,000 ÷ 3,000 = $166

The above example shows that your company generates $166 per hour of work. So, after implementing initiatives to increase employee engagement, you simply need to do this equation again to see how productivity has increased.

2. Turnover

The rate at which people leave your company is also a good indicator of employee engagement. It helps to measure your turnover rate before and after you try improving employee engagement. This will help you compare the values and see if your engagement efforts are effective. 

The equation is as follows:

# of employees who quit during a set time ÷ average # of employees during the same time

• 15 employees quit in 2022
• 200 average total employees in 2022
• 25 ÷ 200 = 12.5% turnover rate

By improving your engagement, you can expect your turnover rate to drop, and this equation will help you prove it.

3. Absenteeism 

Absenteeism is another helpful employee engagement measurement tool. It reflects the level of commitment employees have towards their jobs. Employees who are engaged and motivated are less likely to miss work due to mental health days or other reasons. 

The equation for calculating your absenteeism rate is:

(Total Absences / (Average Number of Employees × Workdays)) x 100 (to make it a percentage)

• (200 Total Absences) / (50 Employees x 260 work days in a year) = 0.015
• Multiply that by 100 to get an absenteeism rate of only 1.5%.

Once you’ve made concerted efforts to improve metrics for employee engagement, rerun this equation to see how your absenteeism has lowered.

How to Improve Employee Engagement Effectively

Employee engagement may seem nebulous or abstract, but there are ways you can improve it. Here are some strategies to try.

Leverage Technology

Technology makes it much easier than ever to measure employee engagement. Tools such as pulse surveys, polls, and feedback platforms are great for getting an idea of how engaged your people are.

Analytical tools can help you track key engagement indicators as well, such as turnover, absenteeism, performance, and satisfaction.

Hold Exit and Stay Interviews

Exit interviews are perfect for finding out what is causing your employees to leave. These interviews help you see which engagement strategies are working and which aren’t.

However, stay interviews can be just as impactful. Frequently interview employees who aren’t quitting to see why they stay. What do they enjoy about their work and the company? What would they like to see improved?

With exit and stay interviews, you get a comprehensive look at who is engaged and why.

Craft Employee Engagement Surveys

Employee engagement surveys are more robust surveys that focus specifically on the engagement/disengagement of your workforce. Here are some ideas for creating an effective survey:

1. Define the goals of your survey—what do you want to learn and measure?
2. Plan a cadence for the survey—one annual survey, a quarterly culture survey, and a monthly pulse survey are a potential schedule.
3. Build your survey with thoughtful, insightful questions (examples below).
4. Guarantee anonymity so that people are more open and honest in their responses.
5. Limit the length, even for a comprehensive annual survey—your employees are busy, so try to keep the number of questions below 40.
6. Incentivize participation in a fun way that maintains anonymity.
7. Share results to prove that employee responses are actually looked at—and share how the results will shape the next steps/improvements you make.

Whether you’re planning a short pulse survey or a long engagement survey, these guidelines will help you craft something that employees will get excited about. As promised, here are some example questions to include:

• Do you feel your manager recognizes your contributions and capitalizes on your strengths?
• Do you feel company leaders have your best interests at heart?
• Is your feedback on the company taken seriously?
• Do you have fun at work?
• Do you understand the core values of the company?
• Do you know how your work contributes to those core values?
• Would you recommend the company to a friend?
• Do you get along with and respect your manager and coworkers?
• Are you satisfied with your work-life balance?
• Do you ever feel confused about what you should be doing with your time?
• Do you have opportunities to learn new skills and grow as a professional at work?
• Are you aware of your path of upward growth?
• Have you received recognition in the last month?
• Do you feel valued and appreciated for your work?
• Do you feel trusted and empowered to do your best?
  

When it comes to engagement, three key areas have the greatest effect: whether employees feel supported, whether they enjoy their work, and whether they have development opportunities. When creating your surveys, focus on questions that center on these areas.

Utilize Managers and Leaders

Managers account for 70% of the variance in employee engagement. In fact, the single highest driver of engagement is whether employees feel like they belong at their organization, and managers directly influence this feeling.

Have managers hold one-on-ones with their employees to discuss their happiness, individual goals, career roadmaps, and satisfaction with their teams. If needed, have them clarify expectations, offer feedback, and provide guidance.

Managers need to offer personalized support in order for employees to stay engaged.

Reward and Recognize Employees

Rewarding and recognizing employees is a great way to instill appreciation and a sense of belonging in the workplace. But the reality is, while many organizations do have some sort of recognition program, 81% of HR leaders don’t believe it’s very impactful. 

The key to making reward and recognition effective is following four best practices: 

1. Make it timely: Recognize as soon as you notice your employee doing something good. 
2. Make it genuine: Be sincere and specific about recognition. Explain why someone is being recognized and offer a custom gift (something that reflects their interests).
3. Make it frequent: Ensure no hard work and effort get overlooked. This will help strengthen the culture of appreciation you’re trying to build. 
4. Make it easy: Appreciating employees shouldn’t have to be hard. A rewards and recognition platform is a great way to simplify the process. With Awardco, you can access a global rewards network and set up reminder notifications to ensure a memorable experience.

The Future of Employee Engagement

Employee expectations are evolving—they crave meaningful work, supportive cultures, and a manageable work-life balance. The good news is that creating a culture of engagement with remote employees can be challenging but not impossible.

Awardco can help you get there. Deliver a truly meaningful employee experience by leveraging our renowned rewards and recognition software. Get your demo to see what it can do for your organization.