Companies are beginning to focus more on the human aspect of “work”, and the shift is bringing with it some new questions, including how to best measure employee experience.
Many organizations had previously set their sights on goals like reducing costs and increasing output, with little regard for their employees and their workplace experience. Now, these enterprises are in the process of recalibrating their metrics for business success. Alongside employee experience, space diversity, workplace experience, and sustainability goals are becoming increasingly important to consider as we shape the way we work.
As essential as these concerns are, they can often feel more abstract and difficult to track than previous workplace goals. The KPIs for Modern Workplace Leaders series will dive into measuring these new concepts in preparation for the return to the office.
In the second part of the series, we’re sharing modern KPIs that you can use to understand employee experience in your company. These focus on worker engagement, regardless of whether people are working in the office or remotely.
It’s also possible to measure the effectiveness of your office design! To see how your company can measure workplace experience, take a look at the first part of The KPIs for Modern Workplace Leaders series here.
Calculation: Employee satisfaction survey score over time
One of the best ways to measure the employee experience within a company is to go directly to the source. While there are ways to measure it in more quantitative manners, employee experience is subjective. To get the best idea of where your organization stands, ask your employees about their opinions about it and how happy they are in different aspects of the job.
While this can simply be done by having a conversation with individuals, this method can be difficult to track over time. To help you get a broader and more unified understanding of employee satisfaction, we recommend turning to a tool designed specifically for employee satisfaction surveys. For example, Culture Amp or Lattice.
Tools like this make it simple to get the opinions from everyone within a company. By scoring satisfaction on different topics, they help you narrow down the biggest areas for improvement. These tools have already done the work to understand which areas of work have the biggest impact on employee satisfaction, making it easy to understand where you should put your energy. For instance, depending on your industry and company size, Culture Amp could define the question “I have confidence in our company’s leaders” as highly impactful. Whereas, “our physical workspace is enjoyable to work in” may be seen as having low impact on general employee engagement.
One of the nicest aspects of these surveys is that they give you a concrete score, so you have a clear overview of whether employee satisfaction is increasing or decreasing. This makes it one of the most-straightforward ways to measure employee experience.
Calculation: Employee wellness conversations and survey scores
It’s becoming clear that employee wellness plays a key role in workplace satisfaction and productivity. That’s why many corporations have begun initiatives to help improve the general health of their workers, be it through meditation courses, fitness challenges, and so on.
While these measures are helpful to encourage overall wellbeing, it’s also important to recognize that employee wellness can be a direct indicator of how positive the employee experience is.
Stress and burnout have an enormous impact on general health, and are linked to increased sick days taken. So, sick days can give you an idea of overall company wellness, which gives you some insight into how healthy the employee experience is.
The downside to tracking sick days is that, firstly, it varies between employees. Secondly, it’s impacted by many other factors, like weather and individual habits. Thirdly, by the time employees get ill from burnout, it will be too late to rectify the issues at hand.
This means, much like employee satisfaction, qualitative measures are better to track wellness at work. Encourage teams to be open and have ongoing conversations; make this a part of team leaders’ scope. By having an ongoing overview of how employees feel about their mental, physical, and emotional health, it will be easier to react before company-wide problems progress too far. It’s also possible to use surveys as a way to have a broader overview.
If you notice a drop in wellness scores from one quarter to the next, it’s time to investigate. Speak to team leaders and employees to understand if they have increased workloads or if there are other issues. Then you can address these concerns to improve the employee experience and ensure that everyone is feeling their best when they come into work.
Internal Brand Loyalty
Calculation: Employee Net Promoter Score (eNPS)
Every company wants their customers to be loyal. Companies work hard to bring clients in, so they want to make sure they don’t lose them. Word of mouth and personal recommendations can be one of the most effective forms of marketing. Loyal customers mean that your company is headed in the right direction.
To many of you, this information will feel like a given. But have you considered how the same principles apply to the employee experience?
The Employee Net Promoter Score is actually based on the Net Promoter Score, which was originally used to measure customer satisfaction. It allows you to measure employee experience using one simple question: On a scale from 0-10, how likely are you to recommend our organization to your family or friends?
Each respondent is considered either a detractor, passive, or a promoter of the company based on the number they give. And using a basic formula (explained here), you end with a single number. This is your overall score for the brand loyalty of your own employees.
While you can benchmark against other locations, the score can also stand alone. Anything below 90 suggests that the majority of your employees feel that the employee experience can be improved.
Calculation: # of individual employees who remained employed for entire measurement period / # of employees at start of measurement period
Employees who don’t like a company and their experience working there are unlikely to stay. That’s why retention rate can be a straight-forward way to measure employee experience within an organization.
As a company ages and grows, employees are bound to leave. It’s impossible to avoid all employee churn, so don’t get too caught up when you have employees leaving. On the other hand, if the retention rate isn’t relatively steady, or improving over time, there could be more to address.
Keep an eye on this number and act fast if there are discrepancies from other time periods. Ask questions in exit interviews and to current employees to get a better sense of why retention is dropping. If the issues are addressed quickly, it can spare you from an even higher turnover rate.
Onboarding Completion Rate
Calculation: % of new hires completing the probation period
Similar to retention rate, onboarding completion rate can be a very strong indicator of how good a company’s employee experience is. It may actually be even better.
People who have worked at a company for years, evolve with the company. For this reason, they may have a harder time recognizing issues that have slowly appeared over months or years.
In contrast, new hires bring a fresh perspective. They will be quicker to recognize problems since it doesn’t feel ‘normal’ to them. On top of that, they will also be more likely to react to them, since they don’t have a notice period and strong social bonds yet.
The reasons for someone to not complete their onboarding can vary because of both the worker and the hiring style of the company. For example, if a company has a short hiring process, they’ll likely have a lower onboarding completion rate compared to a company with a very extensive one. For this reason, this isn’t a KPI to benchmark against other companies. Instead, it will be more valuable to track the rate overtime and aim to improve it with gradual changes.
Vacation Days Used
Calculation: % of vacation days not used
If you think that we’re about to say that your employees shouldn’t be using their time off, think again! It might feel counterintuitive, but if employees aren’t utilizing their vacation days, it can be a bad sign.
Breaks play an important role in productivity, and not getting them could cause bigger problems over time. If employees voluntarily don’t take breaks, there are likely deeper rooted issues that are affecting their experience.
There could be a number of underlying reasons that employees aren’t able to take the time off they earn. If you notice this happening in the workplace, check in. Is the workload too heavy to be done within regular hours? Do people feel uncomfortable talking to their superiors about taking time off? Are managers denying requests?
Any of these reasons could be impeding the employee experience and require quick action to resolve.
The Unlimited Vacation Paradox
There are companies that have introduced unlimited vacation policies. The idea is that they don’t provide a set number of days that should be taken off, and allow employees to decide for themselves how much time they want to take.
In theory, this approach gives staff more freedom. As long as they are accomplishing the tasks that need to be done, they can take as much vacation as they want! For certain companies and cultures, this works very well.
There is a downside to this method, though. As CharlieHR explains, people may actually taking less time off. One reason for this could be that they are worried to over-do it and take off more days than they should. Another could be that the pressure of creating handover documents and cutting deadlines adds stress.
For this reason, if your company works with a policy like this, the Vacation metric may be particularly important to track to measure employee experience. Pay attention to how much time is actually getting taken off, and if certain departments, teams, or positions end up with significantly lower numbers. If there are patterns of people avoiding taking time off, there are likely similar concerns to address as when someone doesn’t take all of their paid time-off.
Calculation: See below – Not all companies measure productivity in the same way*
It’s no secret: happy employees are more productive employees. As many workers around the world experienced burnout from the pandemic, extended periods of isolation, and limitations on everyday activities, it’s possible that productivity went down in some companies. Other companies found that the changes in their work-life balance, commute times, and autonomy had a positive impact on productivity.
When people are comfortable going into the office again, it will be particularly interesting to see how productivity shifts. They will be able to collaborate more, spend less time on zoom, and have some much-needed reprieve from their home offices. Examine how the productivity chances over time.
As people initially return, there may or may not be a dip as they readjust their routine. After the initial shock of being back in the office, even if it’s only some days, what happens to the productivity? How does it compare to the productivity of the time people spent working from home? If it’s higher, that’s great news! It shows that the employee experience within in the office is a good one. But if you find employee productivity to be lower or constantly decreasing, it could mean that the excitement of seeing people again has worn off and that the employee needs aren’t fulfilled in the work environment.
*Not all companies are productive in the same way
It’s important to note that productivity will look different for every company, and each organization has to decide for themselves how to track it. A common productivity measure is based on employee hours and company profit, but this won’t work for all businesses. Consider the impact of sales cycles, business model, product costs, seasonality, and anything else that can impact the business before you decide on a calculation for productivity.
Other possible ways to measure productivity are the number of completed objectives; number of sales; time to complete tasks, like responding to service requests; and, the quality of tasks completed.
There is also one way that we do not recommend companies measure productivity: activity tracking. This may work for some organizations, but in many cases is an inaccurate way to measure meaningful productivity. It can also add a new level of pressure that can cause problems over time.
Employees may feel observed in everything they do, which will impact trust within the organization. Another downside is that productivity can change on a day-to-day basis. If workers attempt to compare their own productivity from a very inspired day, to a day on which they were less motivated, it could add unneeded stress. Even worse, it could lead to burnout by making them feel like they are never performing enough.
Calculation: % of roles filled by hiring from within
Think back over the last year: how many of the higher level roles were filled by existing employees? It might come as a surprise, but a team’s hiring decisions can also be a solid indicator of employee experience.
Growth should be an important part of any job. Whether it’s learning new skills through daily tasks and an evolving role, or through education opportunities within the company, every position should offer personal development.
If your company tends to hire from the outside, and opportunities for promotions are scarce, ask yourself why this is happening. Does this happen because management feels that the employees in entry level and junior positions never live up to the task? If this is the case, it’s time to reflect on the opportunities and challenges the company itself is providing its employees.
An ongoing pattern of not hiring from within, is more likely a failure on the part of the company to provide a motivating and challenging employee experience than it is a failure on the part of workers.
The world of work is always evolving, and it’s important to continue updating the metrics we use to track success. Though it may seem more abstract than traditional metrics, it’s possible to measure employee experience. Companies can do so by using a multitude of metrics and setting them in relation to one another. Understand what’s most essential for your organization and start with those metrics.
Regardless of which you choose, what matters is that you continue to collect data overtime, so that you can get the most complete picture of how the employee experiencing is progressing. It will also be critical to make employee experience metrics part of the stack that company success and team leaders get measured by – the same way they prioritize financial metrics or project goals. Only then will the organization as a whole live up to the new standards.
To learn more about how Locatee’s workplace analytics can help you better assess your organization’s workplace experience, get in touch with us.