The quality of your employee experience can powerfully influence your company’s success. Here’s why, when and how to measure employee experience in your business.
How to measure employee experience?
Employee experience (EX) has become a key differentiator among leading employers, and for good reason. It's one of the most powerful drivers of employee engagement and retention around.
People who report having a positive employee experience have 16 times the engagement level of employees with a negative experience, and are eight times more likely to want to stay at a company according to research by McKinsey.
And with 43% of businesses saying the global pandemic has negatively affected employee experience, it’s an important area of focus as we construct the business world’s ‘new normal.’
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The benefits of measuring employee experience
Employee experience is subjective and personal, but with the right tools and techniques you can turn individual employees’ stories into global measurements. But why do it? Being able to quantify the employee experience in this way has a number of benefits.
Measure progress over time
Past measurements can be used as a benchmark to gauge the success of EX programs and keep them on course. They can also help you monitor the impact of outside events, like recession or cost of living, on your employees so you can take the right action to support them.
Find out what’s working and what isn’t
Employee experience is made up of several dimensions, including physical workspace, company culture and relationships with managers. Being able to measure your EX helps you see which of these factors is driving a great experience, and which ones could be doing more.
Communicate about EX internally and externally
Having a representative measurement of your EX means you can discuss it objectively and constructively – it’s not just a matter of opinion. EX scores can also be used for transparency with shareholders and as a way to communicate what your company can offer to potential new hires. Increasingly, EX scores are being reviewed and compared across companies, for example in the Employee Experience Index.
And if you don’t measure EX? You may still have a positive employee experience and engaged employees, but you won’t be able to share your businesses’ performance with the world as easily. Shareable results give your organization a competitive advantage acquiring new talent and helps you to understand which levers to pull to keep EX on course or fix problems as they emerge.
3 essential employee experience metrics
The way EX is measured depends on a company’s goals and resources, with metrics varying from a simple eNPS (employer Net Promoter Score) to granular measurements from detailed pulse surveys, employee feedback and people analytics.
Although single-metric snapshots of EX are possible, they are very limited in scope. Employee experience is multifactorial, built up through layers of many different interactions over time. So to achieve a meaningful understanding and use it to make improvements, it’s better to use a system of metrics rather than just one or two.
You can do this in a bespoke way or use an ‘off the shelf’ system. The advantage of the latter is that you’ll have results that you can standardize with other companies’ results so you know your position in the market.
Jacob Morgan, author of The Employee Experience Advantage, uses a three-part model with 17 metrics to measure EX. They provide a good example of what makes up a well-rounded EX measurement program.
1. Physical environment
These metrics cover the physical workplace, including:
Whether the workplace has varied spaces for different types of work
If the workspace reflects company values
2. Technological environment
These relate to the hardware systems and software platforms employees use to do their jobs, including:
Whether the equipment is ‘consumer grade’ (i.e. something you’d choose in your personal life)
If the technology is available to everyone who wants it
If it’s designed with user needs in mind, rather than just technical and business requirements
3. Cultural environment
The cultural environment metrics cover how employees interact with colleagues, leadership and the wider industry, and how the values of the organization play out in day-to-day working life. They include:
Whether the organization invests in employees’ mental and physical health
The levels of diversity and inclusion employees perceive at work
Opportunities for development and progression
Whether employees feel valued, fairly treated and part of a team
Metrics relating to brand values and having a sense of purpose at work
Whether employees refer friends to work at their company
Employee experience KPIs
Whichever EX metrics you use, it’s important to identify the underlying drivers of employee experience in your company and establish KPIs that reflect them.
Even if you already have EX KPIs set, it’s worth reviewing them in light of changes in the wider world. Since 2020, the factors that promote a great employee experience have evolved. Employees seek more meaning and belonging from their work. The division between professional and personal is less defined. According to McKinsey, “workers are hungry for trust, social cohesion, and purpose.”
A report by Qualtrics showed a dramatic change in the top drivers of engagement, an important component of EX, in 2020. In place of 2019’s top drivers, which were confidence in leadership and opportunities for learning and development, 2020 saw a sense of belonging and a company’s CSR rise to the top of the list.
Here are some common EX KPIs and what they can tell you about the state of employee experience in your business.
The Great Resignation has made retention an important topic for employers, as a general trend of employee mobility threatens to further disrupt the workforce after the turbulence of the pandemic.
When setting employee retention KPIs, you can focus on turnover alone, or you can ask employees how likely they are to stay in their roles – i.e. whether they intend to leave.
There’s some controversy about how well intent to stay predicts whether an employee actually stays or goes. But it’s clear that if someone intends to leave, they’re cognitively and emotionally disengaged from their role and their organization, which will likely relate to the quality of their experience. Also, not all turnover is unwanted – simply measuring how many people leave doesn’t tell you why they went.
Output and achievement are more likely when employee experiences are positive. A study of contact center employees by the Saïd Business School at Oxford University found that productivity was 13% higher when employees were happy. So measures of productivity may be a useful puzzle-piece in determining what drives EX.
Since remote work exploded into the mainstream in 2020, the nature of absenteeism has shifted. We now know that physical presence isn’t a prerequisite for employee excellence. In a study by Buffer, a remarkable 97% of employees said they’d work from home for the rest of their careers if they could.
This means presence or absence at work is no longer a binary distinction that can be used to measure absenteeism. An employee may be working but offline, online but off-duty, or the now-familiar ‘responding to emails but with limited access to Wi-Fi.’
We’re also seeing a trend in unlimited vacation allowance, particularly in the tech industry, which means frequent absence may be a positive or neutral signal rather than a warning sign. Rather than tracking absence, companies interested in employee experience KPIs may have more success measuring the number of sick days taken across the workforce, especially as they may reflect high stress levels or a poor workplace culture.
If people are ascending through your organization, not only are they staying with you for the long haul, they’re developing their career with you and growing their professional skills. Internal promotions mean you’re ‘growing your own’ talent instead of hiring and onboarding new people.
Setting this type of target as one of your KPIs may reflect a few different areas of EX, so it’s important to combine internal promotions data with other insights, including qualitative feedback from employees, in order to get the best out of it.
Job satisfaction is often used interchangeably with employee engagement, but they’re not the same thing. Job satisfaction relates to how much an employee enjoys their daily tasks, whereas employee engagement is broader, covering both the daily grind and bigger topics like company values and loyalty. Gallup defines engagement as ‘the involvement and enthusiasm of employees in both their work and their workplace.’
Using satisfaction as a KPI gives you a focused look at the coalface of employee experience, including aspects like the physical workspace, tools and equipment and the quality of relationships with managers and colleagues. When thinking about how to measure employee satisfaction, consider anonymous channels like online surveys and suggestion boxes which will give people the freedom to be completely honest.
Setting levels of mental and physical health as a KPI usually relies on self-reported data from employees via a survey, although you may be able to check sickness absence records and anonymized health data from your insurance provider too.
Something as subjective and vague as wellness might not sound like a promising KPI as it’s difficult to relate it to tangible outcomes. But achieving high levels of wellness can have knock-on effects on other aspects of the employee experience, including engagement , according to CIO.
How do employees feel about working with you? How do you track and measure their emotions? Until recently, it didn’t seem possible to turn something so personal into standardized data. But technology may have the answer.
Sentiment analysis software allows employee emotion to act as a valuable KPI for large and enterprise-level businesses. Using machine learning and natural language processing, sentiment analysis interprets written and spoken language in a human-like way. It means employees can express how they’re feeling in their own words without having to filter their responses through conversation with managers or by translating rich and complex feelings into a numerical score.
Because it’s algorithm-based, sentiment analysis technology can learn how to measure employee sentiment by doing it, and will adapt to vocabulary and nuance of your unique employee culture as you use it.
Whichever metrics and methods you use, a program of measurement takes the guesswork out of improving EX, helping you build an effective workforce now and for the future.
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