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Key metrics when measuring ROI from employee engagement

Unlike with sales, advertising or production, quantifiable data for employee engagement is harder to come by – which makes it tough when measuring ROI (return on investment). The process of estimation and analysis to work out engagement levels, and to illustrate the impact of poor engagement versus high, can get a little muddy. Here, the introduction of KPIs is particularly valuable.

According to WorkBuzz survey data, 60% of organisations already have engagement KPIs in place. These are a blend of HR-only measures (14%), business measures (20%), and those that measure success across both HR and the wider business (26%). Putting KPIs in place is critical in measuring the pulse of organisational sentiment, and provides a reliable barometer for elements of company culture.

What should my KPIs measure?

The metrics organisations are using cover both overall levels of engagement and specific areas of the employee experience. Our data shows that the most prevalent measures include overall engagement (74%), sickness and absence (50%), voluntary turnover (41%), and external customer satisfaction (41%).

Viewing engagement through an employee experience lens and measuring this through KPIs ensures nothing is missed – and that you’re evaluating the core, daily experiences your employees are having. These individual experiences of employees are the moments that matter to them, and they add up to how they feel about your organisation. They affect an employee’s performance, development, and likelihood of retention.

So, how do you measure these metrics?

Metric 1: Overall engagement

Your overall employee engagement levels will be identifiable through your chosen survey platform. With the WorkBuzz survey platform, employee engagement data is collected through regular pulse surveys, enabling people managers to obtain a holistic view of what matters most to the workforce. Onboard and exit surveys also act as useful tools to understand the pain points during sensitive periods of the employee lifecycle.

Metric 2: Sickness and absence

Sickness and absence occur when employees fail to regularly turn up for work and can be an indicator of how committed these employees are. Those who are engaged are typically more productive and satisfied, leading to fewer days off or reported illnesses, whereas, on the other hand, employees who aren’t engaged are more likely to have higher rates of sickness and absence.

Your sickness and absenteeism rate can be calculated as follows:

(Totals days of sickness and absence for the period ÷ total workdays for the period) x 100

Metric 3: Voluntary turnover

Voluntary turnover occurs when an employee leaves a company on their own. Voluntarily leaving a job highlights how unfulfilled or unchallenged an employee may be in their role. Or perhaps they’re experiencing other issues within the workplace that is negatively affecting their satisfaction. Turnover rate measures how many employees are leaving your organisation over a defined period of time.

Your voluntary turnover rate can be calculated as follows:

(Number of departures during the period ÷ average number of employees during the period) x 100

Metric 4: Customer satisfaction

Customer satisfaction will provide insights into the quality of your product or service. Employees that are disengaged will not provide as high a quality of service compared to those who are enthusiastic about their workplace and role, which will lead to lower levels of customer satisfaction as a result. Customer satisfaction levels should be tracked independently.

Plan your KPIs around the employee experience

Employees will encounter many events, emotions, and experiences across the entire time they work with you. The employee experience is the sum of all the interactions they have with the organisation – from the processes leading up to recruitment, to major milestones and personal events, the technology they use, communications, the work environment, and their eventual exit from the company. It covers the entire employee lifecycle.

Planning engagement KPIs around the employee experience creates a robust framework to ensure you have a comprehensive picture of engagement and culture across all stages of the employee lifecycle.

Tips for setting engagement KPIs:

  1. Define KPIs to measure employee experience, particularly if you’re looking to justify your investment in this area over others.
  2. Remember that no single KPI measurement will provide you with the complete picture. Instead, assemble a list of indicators and mesh them together. Make sure they’re the right measures for your organisation, not someone else’s.
  3. Once you have your dashboard of KPIs for employee experience, start tracking how well your employees are doing in real-time and watch how trend lines move into the future. But don’t just track them – make efforts to improve them over time. This is how you’ll see whether your interventions on culture, wellbeing, employee listening, hybrid working, and flexibility are working or not.
  4. Organisations are more likely to enjoy strong, sustained performance when their employees are motivated, productive, and continually striving to reach new goals. Yet every year a percentage of employees voluntarily leave. Measuring how well you’re creating moments that matter for your people will help make sure fewer leave your organisation, and persuade others to join you.


This article contains extracts from both our Employee engagement in challenging times: Your guide to navigating recession and the cost-of-living crisis eBook and the Employee Engagement & Experience: A measurement and metrics framework eBook.

Overall, by acting on your employee concerns and implementing initiatives to address them, your organisation can begin to mitigate their wider impact. Help deliver an exceptional employee experience to your people – book a demo of our platform today by completing the below form.

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