Employee engagement is not the same as employee happiness or satisfaction. These terms are often misunderstood and misrepresented in reports.
Employee satisfaction and happiness only indicate the level of content of the workforce with their current responsibilities, environment, and team. They are more concerned with retention and do not take into consideration the additional efforts and results generated by highly rated employees.
Employee engagement describes the relationship between an organization and its employees. It shows the extent to which employees are passionate about their work, put discretionary effort into their job, and stay committed to the organization’s objectives. Highly engaged tend to feel more connected to the organization’s vision and mission, retain better, and are more likely to go beyond their job descriptions.
This guide helps HR teams adopt a more data-driven approach to measuring, tracking, and thinking about employee engagement. It will explain in-depth what employee engagement analytics is about, the potential impact, as well as the kind of questions it can help answer. Real-life examples and best practice tips are also included.
Table of Contents
What is Employee Engagement Analytics?
Employee engagement analytics refers to the practice of data-driven decision-making by merging employee engagement with other HR and non-HR data sources to identify drivers of retention and satisfaction. Employee engagement analytics is a subcategory of workforce analytics and standard modern practice in advanced employee management and retention.
Employee engagement analytics benefits all stakeholders within the organization. For executives, analytics gives them the ability to measure the impact employee engagement is bringing to the organization and better incorporate them into the overall business strategy. For line managers, this brings never seen before details about their team. For HR leaders, analytics help them leverage and make sense of the wealth of data that they currently have on their hands but not utilizing.
Benefits of Employee Engagement Analytics
Employee engagement analytics has many benefits. For instance, it helps you better understand the ongoing trends with their workforce, find root causes, and devise a solution that is well thought out. That is, you no longer need to guess the interventions that your team needs to take to tackle an issue.
With the right data and data infrastructure in place, employee engagement analytics helps generate reports and detailed analyses for every team, geographical location, or business line. This allows HR functional leads, line managers, and heads of business to get visibility and updated information about the current state of their workforce. Information such as employee engagement score, engagement score of new hires, and percentage of the workforce that are engaged, etc.
Since more companies are implementing HRIS (Human Resource Information System) and other people-related tools, HR has a tremendous opportunity to leverage these data sources to generate reports, charts, and actionable insights to bring more transparency about the state of their employee engagement. By connecting these data sources, you can identify trouble areas very quickly and judge if an intervention is needed.
Use Cases for Employee Engagement Analytics
While employee engagement analytics has many benefits, here are some specific questions that you can aim to answer with your data analytics initiative:
Identify teams, groups, and managers with the highest engagement score
Before engagement data is widely accessible, highly engaged teams are the same as others. They only get recognition from management after they achieve a major feat of accomplishment. This decreases the likelihood that a manager and his/her team can get the support they need to succeed.
Management can rely on engagement data to track and monitor teams with higher-than-average engagement scores or a higher percentage of engaged employees. Additional budget, enablement, and incentives can be provided to help them become more productive and likely to retain. This is especially important for high performers.
Track and benchmark employee engagement score
A single data point only shows a snapshot of your workforce engagement at one point. Alternatively, a historical trend can show how to engage your business and its improvement rate over a given time period. Benchmarks allow leaders to evaluate where their organizations stand in comparison to others. Together, they give management a more comprehensive view of how engaged their workforce is.
Measure the impact of employee engagement on business outcomes
Another use case of employee engagement data is to link it with business outcomes. Most managers understand the importance of employee engagement but do not have any insights or reports on how improvements in this area can translate into financial results. This makes it hard to grab the boards' and executives’ attention.
More than often, engagement scores are presented in a simple side-by-side comparison with other metrics to help conclude. While this type of analysis could be sufficient in some cases, employee engagement is just a piece of the workforce strategy puzzle that HR teams need to get right. The ability to analyze employee engagement data more holistically will help HR make smarter workforce management decisions.
Top Employee Engagement Metrics
In order to effectively manage employee engagement, teams need constant reporting and monitoring. You can set up key metrics in your reports to ensure that relevant data is being tracked. This allows you to identify issues early on and intervene quickly. Below are the top 6 employee engagement metrics every HR team should track regularly:
Employee Engagement Score Employee engagement score measures the overall job or positions satisfaction of employees expressed as a score or percentage.
Percentage of Engaged Employee This metric captures the total number of headcounts meeting the engaged employee requirements expressed as a percentage of the total workforce size.
Satisfaction with Compensation This measurement captures employee satisfaction and commitment with respect to employee perception of compensation provided by the organization, meaning the employee's perception of compensation meeting their expectations.
Satisfaction with Benefits This metric measures employee satisfaction and commitment with respect to employee perception of benefits provided by the organization, meaning the employee's perception of benefits meeting their expectations.
New Hire Engagement Rate This metric measures new hire employee overall job or positions satisfaction expressed as a score or percentage.
Net Promoter Score Net Promoter Score captures employee satisfaction and commitment both internally and externally to the organization expressed as a percentage or score and linked to employee engagement or similar survey results.
The Journey to Employee Engagement Analytics Excellence
The journey to recruiting analytics excellence has many stages. Each stage represents the companies’ ability to effectively translate data into insights and actions. Gartner broke down a typical analytics maturity journey into the four main stages: (1) Descriptive Analytics, (2) Diagnostic Analytics, (3) Predictive Analytics, and (4) Prescriptive Analytics.
Descriptive Analytics examines historical data to evaluate existing employee engagement trends and highlights any potential worrying trends. For example, the data shows that the engagement rate for the product team has been consistently dropping in the past 6 months.
Diagnostic Analytics helps teams conduct root cause analysis for employee engagement topics. Following up on the example in descriptive analytics, the question this company should try to answer is: “What are some potential causes for the failing employee engagement?”
Predictive Analytics highlights the potential impacts and results that these worrying trends and risks are causing for the organization. This could take place in the form of employee turnover, cost, and performance. The predictive question this company needs to answer is: “How will the engagement issue impact the company’s ability to meet product development goals and, in turn, project revenue for the next quarters?”
Prescriptive Analytics helps companies find the most optimal solution for known employee engagement issues and overall business objectives. Using the same example, companies should use prescriptive analytics to prescribe interventions that help turn employee engagement around.
Implement Employee Engagement Analytics
Being able to see how improvements in employee engagement scores translate into tangible benefits for the organization in the form of cost savings, ROI, or productivity improvements is cited as one of the top reasons why many companies fail at HR analytics.
The key to unlocking these types of analyses is to integrate employee engagement data with other HR and non-HR data sources.
For example, examining just engagement data allows users to track the number of engaged employees and average engagement score. Combining engagement with turnover and performance data allows you to measure the performance difference between engaged and not engaged employees.
Make Employee Engagement Analytics Part of Your Workforce Strategy
The performance and retention of your workforce are heavily dependent on the engagement level of your workforce. That is why it is critical for HR leaders to adopt a robust data-driven practice to help companies spot, engage, and encourage high performers.
The traditional approach to HR analytics requires significant investments in tools and people. An out-of-the-box solution like SOLVE™ can help companies significantly cut down the time spent monthly on reporting, allowing recruiting teams to focus more on implementing prescribed interventions.
Explore SOLVE™ Workforce Intelligence Solution today or see it in action.