Measuring Employee Engagement: How to Do It & Why It Matters

One of the key metrics that will determine the fate of your business is one that often flies under the radar: employee engagement. From productivity to lower revenue, employee engagement impacts nearly every facet of a business. 

It's more than just keeping employees from being disengaged, though. While it's true that any organization should avoid having low morale and actively hostile employees, confusing happiness or satisfaction with engagement is a common mistake. Happy and satisfied employees leave companies all the time – engaged employees do not. Clearly, the distinction is important.

Given its tremendous impact, it's no wonder that many of today's companies are making employee engagement a focal point of their long-term planning. This is even more true with the rise in remote work agreements, hybrid office environments, and fully remote workers. Keeping a pulse on employees has never been more challenging. It has also never been more critical. 

Remote workers can completely reinvent an organization. By widening the prospective talent pool to anywhere, employers can finally address shortages in hard-to-staff departments or give senior, self-managing employees the autonomy and freedom they've long desired. Properly managing that workforce still requires an attentive leadership team, however. Creating a remote work policy and setting standards is a good start. Getting a plan for raising employee engagement and keeping it elevated is another vital component. 

With that in mind, we'll be taking an in-depth look at employee engagement: what it is, why it matters, how to measure it, and the tools and support a business needs to take advantage of it. With these resources, any company should be able to develop a plan that will improve engagement and, in turn, their profitability and success as an organization. 

Employee engagement: a critical component

Before getting into how to measure employee engagement and what to do with that information, let's get clear on the definition of employee engagement and why it is important. This knowledge will form the foundation upon which the rest of an organization's engagement plans are built.

Defining engagement

As mentioned above, employee engagement is often confused with overall happiness or satisfaction. While these can be byproducts or factors in an employee's overall engagement with their organization, they're not the primary focus. Satisfaction and happiness are both transient states – meaning they can come and go quickly. 

Engagement, instead, measures an employee's commitment to an organization overall. This can be defined by a shared sense of goals, deriving purpose from the work, and caring for the organization's overall health.

These distinctions are what separate engagement from other, more superficial measures of an employee's state of mind. Vague terms like "happiness" could apply temporarily to any employee in a particular situation. For example, an entire workforce can be temporarily "happy" if the employer offers an extended holiday weekend or unexpected bonuses. 

Those measures do not, however, impact an employee's commitment to the employer's goals or long-term strategy. The employees could be happy with their bonus and just as easily leave the following week if a different employer offers a bigger one. While engaged employees tend to be happy and satisfied, the reverse is not always true.

Engagement doesn't just help the company, either. Research shows that employees who feel a sense of purpose and commitment at work have significantly improved mental and physical health. So boosting employee engagement doesn't just help the company; it helps the employees as well.

This is doubly true for companies that have an increasing number of remote employees. While overall, remote workers tend to be more engaged and productive than the employees in "traditional" office environments, this does not mean leadership can safely ignore morale entirely. On the contrary, an appropriately monitored and engaged remote workforce can be a company's biggest asset and a solution to many of the staffing problems leaders and recruiters face today.

We're now years into the workforce changes brought about by the pandemic, and there are still no signs that workers are keen to return to the office. If anything, the opposite appears to be true. This makes remote workers particularly important for companies concerned about their overall employee engagement and productivity. Without regular face-to-face interaction with leadership, remote workers can easily fall by the wayside if an employer is not proactive about keeping them engaged. 

Why it matters

Almost every aspect of a business's operations is impacted by the engagement level of its employees. Studies have shown that, in addition to overall productivity increases, companies with engaged employees are more likely to grow and grow faster at that. Teams perform better, and employee retention significantly improves.

The ways this impacts a business – both financially and intangibly – are immeasurable. Obviously, any business manager or owner will gladly take a reduced turnover, fewer onboarding expenses, and a more seasoned workforce. Higher engagement provides all of that. However, the not-so-obvious benefits of strong employee engagement are where it really gets interesting.

For companies that have a customer-facing or service component, high employee engagement always universally translates to better customer service. Companies whose employees believe in the products or services they're providing will have an easier time managing their workforce, while customers will gain a better experience with the brand. This can reduce management expenses while growing revenue simultaneously. It can also improve a brand's image in the marketplace, which is always a good thing.

Even organizations without a strong service component to their business can still reap these benefits. Employees who are committed to the company's goals and mission will be more likely to speak positively or refer others to the organization, helping with recruitment while also bolstering the brand. Productivity also sees an increase when employees are invested in the company.

For businesses with remote workers as a significant portion of their workforce, all of this is even more important. The comparatively autonomous nature of remote work creates a unique set of risks and opportunities. For example, a disengaged, disgruntled employee may be causing damage to the company's reputation or harming productivity in ways that management isn't even aware of. If they aren't monitoring engagement, that is.

Conversely, the autonomy remote work provides is consistently listed among the items employees most value – allowing a company to have a truly engaged and satisfied workforce if they take their employee engagement seriously. With remote work a key to bridging talent shortages in many industries (and sometimes, entire regions), keeping these items at the top of your organization's priority list is essential.

With that in mind, we'll look at some of the best ways to measure your workforce's engagement and discuss how a company can put those findings to work.

Engagement by the numbers: measurement

Knowing the value of keeping your employees engaged is one thing. Tracking and utilizing that same engagement is another matter. Companies usually have at least some minor measures in place to gather this vital information, but it's often not nearly enough. Taking engagement seriously means utilizing every tool at your organization's disposal to paint a holistic picture of your current workforce.

Many of the items below can be used in tandem with each other. This is particularly useful for companies with a larger share of remote workers, as keeping an eye on these metrics will be exponentially more important in those environments. Here are some of the tried-and-true methods for tracking employee engagement.

Direct questionnaires, surveys, and feedback

Most employers and employees are familiar with the traditional employee survey. Depending on the organization, it may be focused on engagement, satisfaction, or seemingly nothing. They can be equally varied in terms of substance. To encourage honest feedback, they're typically submitted digitally and anonymously, allowing employees to have their voices heard while also alerting managers and leadership to problems they may not have been aware of.

The traditional "employee engagement survey" is typically a longer questionnaire, asking targeted questions regarding employees' physical & mental well-being, their opinion on the company's goals or mission (or what that mission is), and culture. Additional questions will usually focus on an employee's opinion of their immediate supervisors or colleagues and some background detail on general communication within the organization. These questions are typically framed in an agree/disagree format or a scale of 1-10 for agreement.

Given the level of detail in these particular surveys, they should be used somewhat sparsely (think two or three times annually) to avoid inundating employees.) To truly promote engagement and show an investment in their staff, leadership should disclose results publicly and focus on or highlight the areas that the company aims to address. This will give the surveys added credibility, as well. 

That said, having gaps of four, five, or six months in your engagement data is not ideal, particularly in remote work environments. Intermittent "snapshot" or "pulse" surveys that quickly assess your most important areas can be utilized in between the lengthier questionnaires. This will allow company leaders to, at a minimum, keep an eye on trends and head off potential problems before they arise.

Interviews, one-on-ones, and personal contact

Perhaps the most "old-fashioned" ways to measure employee engagement, direct interviews, one-on-one sessions, and casual feedback, can still provide insight into your workforce's engagement level. Even remote workers can still participate, albeit via e-conferencing or other methods.

That said, the value of the data these types of interactions provide will depend largely on the management team conducting them. Managers must have already fostered an honest, open dialogue within their teams or departments if they want honest, unfiltered feedback from their team members. Engagement survey results about management may well dictate whether this form of measuring employee engagement will work for your organization.

Research, data, and analytics

Depending on the size of your organization and its priorities, you may already have some measurement tools at your disposal. Productivity metrics may also double as good indicators of your organization's employee engagement level. While outside factors can influence overall performance, a consistent trend in one direction with no explanation outside of the workforce itself is probably pointing to engagement successes or failures.

Many of the warning signs that employees are becoming disengaged will show up in other areas. If your business or organization tracks tardiness, absence, or working hours, these insights may also provide the first signs of trouble. Steadily increasing absences or tardiness year-over-year, particularly by senior employees, may indicate morale and engagement issues. Employees working well outside traditional business hours may be those most likely to burn out or have work-life balance concerns.

Optional events held or sponsored by the company can also provide insight. For example, employees who are committed to a company's values and mission are more likely to attend charity events and drives sponsored by their employer. Even attendance at holiday parties and teambuilding activities can indicate the overall morale of an attentive leadership team.

Putting your data to work

To create the most productive, committed, and satisfied workforce, organizational leadership should set clearly defined targets for what they aim to achieve with their employee engagement surveys and actions. Results and action plans should be transparent and made available to employees as soon as possible. This will make clear that management takes employee well-being seriously and may inspire more positive sentiment towards the company along the way.

If there are areas highlighted for improvement that the company can't act on right away, make it clear why that is the case. Employees often give the same honesty they believe they're getting, meaning a straightforward approach to the results of your surveys and data is essential. For the items that will be the target of changes, clearly explain how managers or the leadership team will be implementing them and why.

Don't wait for the next major round of surveys to update your teams, either. Instead, follow up voluntarily and often. Use the shorter, easily-completed surveys in the meantime to see if your plan is impacting morale or at least reversing negative trends. Creating a schedule and sticking to it will make your plan more likely to succeed and increase employees' confidence in the company's actions.

Take your employee engagement to the next level with Outstaffer.com 

Combining the immense talent pool that remote work provides with a sound plan for employee engagement can take a company to new heights. As the workforce landscape continues to change, employers who prioritize employee engagement and adapt, modernize, and tailor themselves to this new environment will thrive.

As an Employer of Record and #WorkFromAnywhere technology company, Outstaffer enables you to hire, pay and equip remote employees. With our managed devices and features like real-time employee monitoring and time & attendance tracking, you can keep an eye on how engaged your remote employees actually are. Plus, with our VR Workplaces, your remote team can work from anywhere – together. Want to learn more? Schedule a demo today.