10 employee engagement KPIs managers should be tracking

Employee engagement has tangible business and people outcomes — that certainly isn’t news. It has been shown to lead to an 81% reduction in absenteeism, a 10% increase in customer loyalty, and most compellingly, a 23% increase in profitability. (1) High engagement rates also signal that employees feel satisfied with and energized by their work experience and development opportunities.

Despite this, many employers still haven’t zeroed in on engagement as a business-critical priority. Gallup data shows that only 33% of employees report feeling engaged (2), and our research found that only one in three HR leaders track metrics like engagement and turnover. (3)

Not tracking these metrics is a problem because engagement isn’t static. Don’t fall into the trap of running far too occasional surveys to “check in” on engagement rather than making use of employee engagement KPIs for ongoing tracking. If you do, it may result in turnover, performance, and productivity issues getting out of hand before you get the chance to implement a strategic, cost-effective solution. 

The right set of KPIs for employee engagement also enables managers and HR teams to create better goal-setting systems, set clearer objectives, and more effectively support direct reports with in-depth engagement data. In this article, we unpack what an employee engagement KPI is and why it’s essential for forward-thinking businesses. We’ll also explore ten KPIs you should include in your engagement strategy. 

1. Gallup, 2023
2. Gallup, 2023
3. Leapsome Workforce Trends Report, 2023

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Understanding engagement KPIs

An employee engagement KPI (key performance indicator) is a success metric that shows how connected employees feel with their work on a mental, emotional, and physical level. Once you’ve started tracking engagement KPIs and implementing initiatives to improve engagement, they can also reveal how much progress you’ve made toward specific engagement-related results. 
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KPIs for employee engagement explained

Think of your eNPS and satisfaction pulse survey scores — these common metrics are leading indicators that gauge how employees feel about work right now and can help you to predict how they will feel down the road. 

Other engagement KPIs like turnover and attendance rates are lagging indicators. They only show the results of possible changes in employee sentiment, which is why focusing on these metrics alone will make it more difficult to address nascent disengagement issues.
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Challenges and considerations when tracking each engagement KPI 

Employee engagement is complex and has nearly innumerable contributing factors. It requires a multi-pronged tracking approach and a deep understanding of what motivates different personalities to do great work. That’s why leadership and managers across your organization may need extra training and practice in implementing a wide range of engagement KPIs. 

“Consider the nuanced interplay of motivations,” writes HR expert Cody Branham on the complicated nature of what drives engagement and high performance. According to Branham, engagement motivators are interlinked and often derive from very personal circumstances.   “Recognizing this complexity not only enriches our understanding of motivation but also highlights the importance of a holistic approach to engagement and retention strategies.” 

Some of the most well-known factors that impact engagement include:

• Compensation
• Leadership and company culture
• Access to development opportunities
• The ability to work autonomously
• Work environment and resources
• Feedback and recognition processes

Remember, too, that some engagement drivers have a greater effect than others. For instance, Gallup data shows that management styles influence employee engagement about four times as much as work location. That means if you rely on a very limited range of data, you risk missing the broader engagement picture and even jeopardizing your company financially. Indeed, according to recent McKinsey data, employee disengagement and turnover costs companies an estimated $228 million USD per year.
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10 key employee engagement KPIs to improve organizational success & culture

Selecting a broad set of metrics means you’re able to capture engagement data from every possible angle and create more targeted solutions for improvement. Let’s learn more about each metric’s importance within a wider strategy and explore how they work.
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1. Employee engagement survey scores

Engagement surveys don’t have to be laborious and costly to run, and they’re one of the best ways to gather engagement data. Why? You can learn a lot about employee engagement from participation rates alone. Lower scores often point to decreased engagement, and surveys allow you to ask employees for specific solutions and suggestions. 

Even better, the more engagement surveys you conduct over time, the easier it becomes to identify trends and discover if there were any internal changes or external factors that impacted drops or upticks in scores. That way, you can make more accurate engagement predictions for the future.   
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How to measure employee engagement survey scores

Ask employees to rate how much they agree with the provided prompt on a Likert scale of one to five. A “one” can indicate that they disagree completely and a “five” can show that they agree completely. Prompts may include:

• I feel motivated to perform my best work every day.
• I feel I utilize my skills and abilities well in my role.
• I’m happy with the opportunities I have to develop at [company].
• I feel like an integral part of my team.
• My manager recognizes me often for my contributions.

With a Likert scale, you can calculate the average to determine the score for each question by dividing the sum of all the scores by the number of responses:

• Find the average score → 4 + 3 + 2 + 5 + 3 = 17/ 5 = 3.4

Note that engagement surveys also often include open-ended qualitative questions that can help you better identify the why behind the trends your survey scores are highlighting.

You can glean these insights even faster by using Leapsome Surveys, which automatically calculates survey scores and shows you which specific factors are driving engagement the most. It also uses sentiment analysis and generates action plans based on your results. 
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2. Employee satisfaction rates

Satisfaction and engagement may correlate, but they’re not the same thing. While engagement has more to do with how employees feel about their work, satisfaction is linked to a team member’s perception of what they’re “getting” from work. Highly satisfied professionals are happy with the compensation, benefits, recognition, work-life balance, and perks they have as part of their roles.

Why does this difference matter? Employees can feel engaged with their work but not be thrilled with their pay, rewards, workload, or lack of appreciation — and that dissatisfaction can impact engagement over time. 

For instance, a Colonial Life study on employee well-being found that stressed professionals are 33% more likely to be disengaged. This illustrates why it’s so necessary to track satisfaction as a separate driver from engagement — because employees may enjoy the work they do, but if they feel dissatisfied with any aspect of their work experience, that joy can fade.
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How to measure employee satisfaction rates

To measure employee satisfaction KPIs, you can include closed-ended prompts in surveys, such as:

• I’m happy with my remote work setup.
• I’m satisfied with my current compensation package.
• I feel recognized and valued for my contributions.
• I feel I have adequate time to pursue personal interests outside of work.
• I feel I have enough time to get my work done without becoming stressed.

You can calculate your satisfaction scores using the same formula you use for your engagement survey. The ideal range to aim for in your satisfaction and engagement surveys is 70% to 80%, which means that 70% to 80% of employees feel satisfied and/or engaged at work. If you use Leapsome Surveys, you won’t need to score surveys manually — the platform automatically calculates satisfaction scores based on quantitative survey responses.  
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3. Employee net promoter score (eNPS)

The employee Net Promoter Score (eNPS) is one of the most efficient ways to measure engagement. It only requires team members to answer a simple question: On a scale of one to ten, how likely are you to recommend [company] as a great place to work? 

Modeled after the Net Promoter Score, which is used to gauge how customers feel about their interactions with commercial brands, the eNPS is practical because the formula — subtract your percentage of promoters by your percentage of detractors — yields one precise score on a scale from 0 to 100.
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How to measure eNPS

To measure employee net promoter score, divide answers into three segments:

• Detractors, or scores from 0-6. These are team members who have a negative perception of your organization.
• Passives, or scores of 7 and 8. 
• Promoters, or scores of 9 and 10. Promoters have a positive view of your company.

Then, determine your eNPS with this formula:

• % of promoters – % of detractors = eNPS

In general, scores from 0 to 30 are considered good, and scores from 31 to- 100 are considered excellent. 
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4. Absenteeism rates

With the prevalence of remote work and flexible hours changing the way we show up to our jobs, the nature of absenteeism is shifting too. It’s still a pressing issue, though. New ComPsych data shows that mental health leaves of absence have increased by 33% from 2017 to 2023. 

“Given the tumultuous events of the past few years — with COVID, ongoing international conflicts, civil unrest, and a volatile economy — it’s not surprising to see that mental health-related leaves of absence are up,” says ComPsych CEO and Chairman Richard Chaifetz in a piece for SHRM.

Acknowledging the fact that those external pressures can affect your workforce, it may be time for your organization to examine how many employees have taken a mental or physical health-related leave of absence. If you notice that there’s been an increase in the last few years, this KPI would suggest a focus on initiatives for improving work-life balance and engagement.
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How to measure absenteeism rates

You’ll need to know the time frame you want to investigate, like the past six months or the past year. Then follow this formula to calculate your leave of absence rate. 

• Employees on leave divided by total number of employees = % of employees on leave of absence
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5. Turnover rates

Turnover rates are especially top of mind for employers at the moment. Based on responses to our Workforce Trends survey, 63% of HR leaders reported a rise in turnover in the past year. That means most companies have felt the consequences of low engagement before they had the opportunity to take action.

In this case, it helps to have a platform like Leapsome Surveys on your side, which automatically conducts predictive analysis based on engagement survey results. You can also share this data widely within your organization by downloading it in a PowerPoint format.
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How to measure turnover rates

You should calculate your turnover rates at least every six months, especially if your quit rates have increased in the past year. Start by determining how many employees left voluntarily or involuntarily during the period. Then, calculate the average headcount:

• (Headcount at the beginning of period + current headcount) / 2 = Average headcount

Next, use that figure to determine your turnover rate:

• (Number of employees who left / Average headcount) X 100 = Turnover rate
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6. Meeting attendance rates

It’s important to have an open mind when it comes to measuring meeting attendance rates. If your managers and leaders have noticed that fewer team members are showing up to virtual and in-person meetings of late, it may signal a lack of engagement. 

Having said that, consider that today’s professionals spend 60% more time in meetings than they did in 2020. In addition, 80% of employees say they have ten or more meetings a week, and only 30% of these meetings have an established agenda. 

So, if your teams are experiencing reduced meeting attendance rates, it might be because staff members feel that meetings are happening too frequently, or they may want meetings to be more focused and outcome-driven.

How to measure meeting attendance rates

To determine your attendance rate for every meeting, divide the number of attendees by the total number of invited team members and multiply by 100:

• Number of attendants / Total number of invited participants X 100 = Attendance rate

You can then determine the average attendance rates over a given period. If that sounds like a lot of work, you can also track meeting attendance in the Leapsome Meetings dashboard, which automatically logs all meeting metrics after every session. 

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7. Employee development metrics

Employees value development opportunities even more after the explosion of AI. Responding to a TalentLMS and Vyond survey on learning and development, 66% of participants said that they needed new skills to excel in their current roles. 41% said they’d leave their position if their company didn’t provide them with training opportunities. 

Beyond practical employee growth concerns, a Gallup study found that promotions and development opportunities are two of the primary ways employees feel recognized. The same research also revealed that only one in three professionals agreed that they’d felt recognition or praise for good work in the past week. That means the leaders who are willing to invest in development will likely have more success with retention and employee engagement than their competitors.  
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How to measure employee development 

There are a few ways to track team member development, depending on what opportunities your organization offers:

• Internal promotion rates — Divide the number of employees promoted by the number of total employees and multiply by 100 to determine the percentage promoted in a given timeframe.

• Goal completion — Use a platform like Leapsome Goals to set company, team, and individual OKRs and track completion percentages for the entire organization. 

• Participation in training — Identify how many people have enrolled in your courses or attended your training webinars to see how engaged team members are with learning opportunities. 

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8. Performance evaluations

Engaged employees — those connected to your company’s mission and their growth trajectory within your organization — are intrinsically motivated to do their best work. That’s why companies with high engagement tend to see as much as an 18% increase in productivity and a 41% improvement in work quality. 

The issue, though, is that using traditional evaluations to assess performance can introduce bias and confusion without a data-informed foundation. As ADP’s VP of Talent Insights and Innovation Amy Leschke-Kahle explains in a piece for MITSloan, “The best data to use is objective and quantitative, such as sales that can be attributed to an employee. But for so many employees today, there is no real objective data for evaluating their performance. In an attempt to capture what the manager already knows, organizations often manufacture complex frameworks to create some sort of quantitative data to represent someone’s performance.” The solution? A uniform review system that ties performance to clearly defined skills and streamlined competency frameworks. 

How to measure employee performance 

If your organization lacks clear guidelines for measuring performance, start by designing competency frameworks, which outline the skills employees need to advance to the next level, as shown below:

By defining the core skills team members need to develop, competency frameworks help keep performance reviews focused on objective actions and behaviors.

When it’s time to assess employee performance, it’s best to use the 360° review framework to ensure you’re getting a fairer, more comprehensive perspective of every individual’s work. You’ll ask managers, coworkers, direct reports, and the employees themselves to rate their skills and discuss ways to improve. 

Ask review participants to rate team member skills on a simple scale like:

1. Needs strong improvement
2. Needs improvement
3. Meets expectations
4. Exceeds expectations
5. Strongly exceeds expectations

If you use a platform like Leapsome to run your survey, it will automatically calculate and calibrate performance review score averages across the company.
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9. Participation in organizational initiatives

If employees show excitement and enthusiasm about taking part in new initiatives or events like company retreats, team-building webinars, or mentorship programs, it’s a good sign that they’re feeling connected to their work and your company’s mission and purpose.

Remember, though, that engagement exists on a continuum, which often varies in degrees from person to person. As long as events are easily accessible to everybody, including caregivers and people with health challenges, high and low attendance rates to retreats or virtual team-building events can be an indicator for how engaged employees feel in their role at your company. However, this requires careful communication around team and company events, so that people don’t only participate in your initiatives because they think they’re mandatory.
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How to measure participation in organizational initiatives 

The two best ways to measure employee engagement with your initiatives are:  

• Participation rates — Divide the number of attendees by the total number of invitees and multiply by 100.

• Post-event polls — Ask managers to conduct simple anonymous departmental polls about how helpful team members found the recent event or initiative, and track which events got the highest scores out of 100%. 

• Post-event or post-initiative surveys — These should be fairly short, ideally five questions at most. Ask employees how long they stayed at an event and rate their experience on a Likert scale from one to five.
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10. Company ratings & reviews

Gen Z and millennials are more outspoken about their work experiences than their parents’ and grandparents’ generations. They’re also less afraid to use public platforms to share their thoughts. Not to mention, they’re starting to outnumber Boomers in the workforce. So, if you’re not paying attention to what these growing cohorts — or any employees — are sharing in company ratings and reviews, you’re likely missing out on an easily accessible treasure trove of engagement data. 

If you haven’t yet, set up a Glassdoor or Kununu page and nudge team members to leave an anonymous review. Aim for a score of 3.5 or more — anything lower, and it might be time to make employee engagement a bigger priority.
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How to measure engagement using company ratings and reviews 

There are a few different ways you can approach company review data, including tools like:

• Social media posts — See what percentage of team members engage with or even write about your organization on LinkedIn and X. 

• Company review sites — For instance, you can make your Glassdoor score one of your trackable KPIs.

• Anonymous suggestion boxes — Ask employees to share their thoughts internally using a platform like Leapsome Instant Feedback, which allows team members to leave anonymous comments in suggestion boxes and ask leadership anonymous questions via the Q&A board.
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Simplify measuring employee engagement with Leapsome

Happy employees don’t exist in a vacuum. Engagement is a dynamic phenomenon that’s easily influenced by internal factors — like your culture and people — and external elements — like economic and job market fluctuations. A well-rounded set of engagement KPIs allows managers and HR leaders to take a more proactive approach to addressing employee engagement. Still, it’s best when you have the right software to track all your key performance indicators in one place.

Leapsome is a holistic enablement platform that allows you to tackle engagement from all sides. Track KPIs using the analytics dashboards built into Leapsome Surveys, Goals, Reviews, Learning, and Meetings, using data to determine where employees need the most support. Then drive engagement by tackling those pain points, using Leapsome to empower employees to set their own development objectives, take customized training courses, learn from each other in meetings, and much more.

With its comprehensive suite of engagement tools, Leapsome can help reduce your tech stack while making your company a more encouraging, energizing place to work.
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