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Top HR employee engagement metrics to measure

Posted on June 1, 2022 by

What engagement metrics measure

Employee engagement metrics are a Human Resources concept where the aim is to measure an employee’s emotional attachment to the company. They measure how engaged a company’s employees are, and are indicative of their level of dedication and commitment to an organization.

How to measure employee engagement

The paper “Psychological Conditions of Personal Engagement and Disengagement” by the psychologist William Kahn says there are three principal dimensions of employee engagement: physical, cognitive, and emotional.

Physical engagement describes how much an employee is willing to invest, mentally and physically, in their job — how much personal attention they put forward for the organization. Cognitive engagement indicates a higher degree of engagement: to engage, the employee should be well aware of the employer’s goals and the organization’s strategies, and put forward the desired work. Emotional engagement is the extent of an employee’s emotional relationship with the organization — to what degree they are engaged with its mission and values. In a nutshell, it’s the sense of belonging and confidence the employee has in the company and among its members to put forward their best performance.

Top ways to measure HR employee engagement

The metrics below are the ones HR teams most commonly track to understand engagement.

Employee resilience

Resilience is the ability to bounce back under stress. An employee’s resilience corresponds to how likely they are to stay or last in a company — employees with long-term goals tend to show more resilience. Like many other metrics, resilience is measured through tracking polls and surveys. To gauge it, you can run surveys centred on the employee’s interests, their commitment to taking leadership roles, how much their personality aligns with the work rhythm of the organization, and the extent to which they attain work-life balance.

Employee NPS

eNPS, or Employee Net Promoter Score, helps measure the level of loyalty and engagement an employee puts forward. It is based on one important question: how likely are you to recommend your employer to others as a place of work? It is answered on a scale of 0–10, where 9–10 are promoters, 7–8 are passives, and 0–6 are detractors. Promoters intend to stay because of their positive experiences, and their energy should be harnessed for the company’s growth; passives might stay longer if their issues are addressed; detractors are planning to leave or are the discontented bunch. eNPS is the percentage of promoters minus the percentage of detractors. It is subjective and varies by industry, but as a rough benchmark, an eNPS above 30 is considered good.

Absenteeism

Absenteeism is a regular pattern of taking spontaneous or unapproved leave without a proper formal heads-up, disrupting the work pattern of the organization. This does not refer to genuine personal emergencies but to a habit of spontaneous, unapproved leave. Anything that disrupts the organization’s pattern of working and balance is considered a red flag. The percentage of absenteeism is the number of unapproved absences over the total time period, multiplied by 100. It is entirely subjective and cannot be confined to fixed right/wrong percentages; tracking it works to improve the company’s efficiency by highlighting where to improve.

Employee turnover rate

Employee turnover rate (ETR) refers to the number of people leaving the company in a definite span of time, including both voluntary and forced departures. Keeping track of ETR is necessary since it is a direct indication of the company’s health — paradoxically, it can indicate both growth and downfall, and a very low ETR isn’t always preferable. The percentage ETR is the number of employees who left over the average number of employees, multiplied by 100. There is no universal alarming rate, but as a rough idea, 10–30 is often considered suitable for a company’s wellbeing.

Relationships in the workplace

Positive engagement indicates that your employees share healthy relationships with peers and management, with effective communication, collaboration, and synchronization as they work toward company goals. To find out if your employees enjoy fruitful professional relationships, conduct surveys with questions such as: Do you feel comfortable sharing problems with management? Do you feel your company culture promotes healthy relationships? On a scale from 1 to 5, how effective is management in responding to the queries you bring to them?

Workplace wellbeing

Many companies prioritise employee wellbeing to forge a personal connection with their bottom line. Beyond promoting healthy professional relationships, it is vital to ensure employees’ wellbeing in and outside the workplace — for example, through wellness programs or fitness-focused seminars. Considering how common a sedentary lifestyle is in the present-day work environment, companies should go above and beyond to ensure a fit and active workforce, whether through wellness gifts, marathons, or other fitness drives. Useful survey questions include: Do you feel you can appropriately attend to your health and wellness at the company? Are you able to maintain a healthy work-life balance? Would you participate in fitness activities if the company organized them?

Recognition

Recognition is what keeps people thriving — much like a good paycheck, being recognized for the work you put in keeps people going. Being able to see the impact of your work, and how it fuels the success of the organization, is itself a drive for the employee. Workplace recognition is one of the most critical metrics: without proper recognition, the quality of work tends to go downhill, since it gives the impression that the work doesn’t make a difference. Recognition such as Employee of the Month or rewards for accomplishing milestones gives credit to employees.

Autonomy

Autonomy over one’s work is a psychological way of improving employee performance, since it gives complete control of the project to the employee, which in turn provides a sense of responsibility, resulting in high performance and improved results. Engagement metrics like this help analyze the factors standing in the way of the organization’s growth and progress, so they can be addressed at the root.

Compensation and perks

Compensation is undeniably one of the critical factors that tie employees to a job, alongside the quality of work, work-life balance, and company culture. There should be clarity regarding compensation packages at different levels, and employees should know they will be rewarded with salary hikes and promotions if they give their best. In addition, organizations can motivate employees with lucrative perks and benefits — gym memberships, corporate discounts, health plans, and the like. Keeping tabs on your employees’ satisfaction levels goes a long way in gauging their commitment to the company; implement employee engagement strategies and monitor the metrics above to ensure your efforts bear fruit.

The 7 Pillars of HR Leadership — Part 6: People Analytics

Posted on September 1, 2020 by

What is people analytics?

“Gut feeling” or “previous experience” are no longer viable methods for making decisions about employees and work. Leveraging analytics to help with decision-making can be an effective way to remain competitive and financially viable post-COVID-19. HR can be part of this process too — helping the organization select and reward valued contributors, and redefining what “value” means for the company.

People analytics is the application of data analysis to HR-related information so that HR professionals and organizational leaders can make more informed, evidence-based decisions about the workforce. By identifying patterns, trends, and correlations in workforce data, organizations move from intuition to insight across hiring, development, engagement, and retention. Here are some examples of what people analytics looks like in practice, and how HR can leverage data to help make business decisions.

Recruitment analytics

Recruitment analytics involves tracking, measuring, collating, and analyzing candidate and employee data to make better hiring decisions. It helps identify the most effective sourcing channels, predict candidate success based on historical data, reduce time-to-fill, and assess the quality of hires so that the recruitment pipeline stays full and cost-effective.

Performance analytics

Performance analytics connects employee performance data to business outcomes. By analyzing goals, ratings, and productivity measures alongside organizational metrics, HR can see which capabilities drive results, where development is needed, and how individual and team performance ties back to revenue and customer outcomes.

Retention and attrition analytics

Employee turnover is costly and disruptive. By analyzing data such as tenure, performance, engagement levels, and compensation, organizations can predict which employees are at risk of leaving and intervene proactively — with targeted retention efforts such as personalized career development plans or compensation adjustments for at-risk talent.

Employee engagement analytics

High engagement leads to higher productivity and lower turnover. Engagement analytics pinpoints the factors that influence engagement levels within the organization — drawn from surveys, pulse checks, and feedback — so HR can implement targeted initiatives in the areas that need them most, such as workload balance or recognition programs.

Workforce planning analytics

Workforce planning analytics helps the organization understand the shape, cost, and capability of its workforce over time. By modeling supply and demand for skills, HR can plan hiring, reskilling, and internal mobility in line with the business strategy — ensuring the right people with the right skills are in the right roles for the future.

HR analytics and its impact on the organizational decision-making process

Posted on July 10, 2020 by

From data to better decisions

Digital transformation is changing the organizational decision-making process and creating connectivity among people, processes, technology, and data. Organizations have the opportunity to be the disruptor or to be disrupted. Your timely and positive decision-making process can help your organization and the business grow.

But to be successful in the digital economy, just having access to more data isn’t enough. To make decisions based on real data, you need to be able to ask questions and have better answers. What is needed in these troubled times is the ability to provide employees, managers, and administrators the business insight they need to make better decisions — in return helping your organization become the disruptor, not the disrupted.

The challenge for HR in this new digital world is to fundamentally change the way it has worked all these years and enable transforming the organization’s business strategy into results-oriented outcomes through people. This necessitates HR creating new processes and new business opportunities — stepping beyond the automation of HR processes and service delivery. HR has to take a more top-down approach: start with business challenges, identify KPIs and measures that impact business results, and engage the total workforce in delivering organizational objectives. Through digital transformation, HR can and must bridge the gap to help drive the leadership agenda.

HR analytics drives a better decision-making process

In the business world, terms like HR Analytics, People Analytics, Talent Analytics, and Workforce Analytics are used interchangeably. But when you talk about HR analytics, it goes past the HR domain and starts interacting with other functions like finance, sales, and supply chain to find meaningful answers for the business.

Even the most evolved and accomplished HR organizations struggle to fulfil their corporate responsibilities:

Continuous transformation is not easy. HR has to manage Core HR and Talent processes efficiently and in regulatory compliance across the organization and throughout the employment life cycle.
Engage, develop, and deploy organizational talent across the organization all year round for maximum productivity.
Enable a better decision-making process across the organization with HR and talent insights, helping senior leadership make organization-wide decisions based on facts and big data.

Various organizations struggle to strategize and execute one or more of the above responsibilities, but progressive organizations are increasingly using KPIs, metrics, and big data in HR to respond to these challenges.

Why is there greater demand for HR analytics?

The role of HR organizations has evolved due to various business-defining moments in the last decade — the financial crisis of 2010, increasing globalization, diversity, the COVID-19 turmoil, and many other events. So HR has to be more strategic than just playing the role of an administrator.

New HBR research, “How Four Talent Practices Add Up to Big Revenue Gains,” suggests that four talent management practices have the potential to drive an additional 8 percent higher revenue per employee, for a total advantage over the average business unit of 59 percent:

Select managers with natural talent.
Select the right individual contributors.
Engage employees.
Add a focus on strengths.

To execute talent strategies well, HR organizations need analytics to help with their decision-making process. HR has come a long way, but the use of analytics within HR still lags behind other organizational functions by a large margin. As a result, HR organizations very seldom use data modeling and predictive analytics in attrition, hiring, and talent development, let alone linking employee performance with revenue growth. A SHRM report, “HR Lags in Using Data to Make Decisions,” found that 92 percent of companies are struggling to get the strategic insight they need to solve retention and other issues; 59 percent don’t currently have a system in place to monitor employee engagement; and 46 percent struggle to make better use of people data.

As a result, HR scorecards and dashboards usually depict primarily HR data, not the business impact of that data — because in most situations HR is not used to asking the right questions, so it does not solve the right problems. This is one of the main reasons HR is rarely involved in larger organization-wide decisions such as mergers, acquisitions, expansion into new markets, or moving from brick-and-mortar to digital.

HR trends

Recent Deloitte Global Human Capital Trends show the need for HR analytics (people data) and the lack of preparedness of organizations worldwide.

What are the biggest challenges of HR analytics?

Building actionable KPIs, metrics, and analytics in HR is not easy. Unlike a function like finance, which has used analytics for more than a couple of decades, HR faces many critical challenges in its analytics journey:

Data scientists specializing in HR — who can gather, manage, and report on data — are a rare commodity.
For useful HR analytics you need good-quality data, and more often than not HR cannot produce clean, high-quality data.
HR usually resides in its silo and very rarely integrates well with other organizational processes, making data modeling and building hypotheses on the connections between talent and business performance extremely difficult.
HR mostly follows a “best-of-breed” approach, with specialized software for almost every HR process (recruiting, performance, Core HR), which makes a holistic approach to solving business problems and tying actions and insight to ROI very challenging.
There is no such thing as uniform KPIs and metrics in the HR world — no two organizations calculate headcount or turnover the same way.
Finding HR analytics tools that can combine HR data, external benchmarking, and data from other processes together in a simple manner is hard.

Bringing everything together

The biggest challenge to business success through HR analytics is the lack of process and data integration — first within HR, then with external functions. HR needs to work very differently than before, but that is far easier discussed than done. Some tried-and-tested routes that apply to all organizations:

Bring diversity into the HR function. Get people who understand the overall business, operationally and functionally, to work with the broader HR team; they build business acumen in HR and can talk the language of business.
Bring in an HR-specialized data scientist who can build KPIs and metrics for HR with active support from the HR organization.
Involve HR in the highest level of planning and decision-making. This builds mutually beneficial relationships with other business leaders and helps HR understand their issues and objectives — and where HR can make a difference.
Learn and model tried-and-tested approaches from other functions: a supply-chain inventory model for people movements like hiring and turnover, a portfolio risk-management approach to turnover, shortages, and capability gaps, and customer loyalty models for employee engagement.
At first, build a few key HR analytics — like the risk of key employees leaving and its impact on productivity — that are easy to demonstrate and get senior-leader buy-in, rather than something like linking employee motivation to shareholder value.

The goal should always be to focus on business outcomes. Every HR initiative — Performance Management, Succession Planning, or Talent Acquisition — should relate to the organization’s overall objectives, like customer satisfaction, higher productivity, and revenue growth.

Other aspects where everyone can work together

HR has the capability of looking across the organization through the lenses of people, staff movement, and culture. Hence it can solve the problem of connecting people and processes through a variety of quantitative and qualitative approaches:

Identify the communication gap; analyze the organization’s communication flows, strengths, deficiencies, and bottlenecks.
Build a cognitive, cohesive model for problem-solving where cross-functional and cross-organizational teams come together for a particular cause.
Build organizational culture through job rotation; organizations that take job rotation seriously develop, over time, their own culture that makes all employees work as a single team.

Through these activities, HR can build an environment ready for superior HR analytics, helping it become part of the overall organizational decision-making process. As long as HR focuses on corporate objectives and comes out of its silos — and helps others come out of theirs — it can build amazing people analytics for everyone.

What should we learn from the recent COVID-19 crisis?

The recent and ongoing pandemic has probably changed the way everyone looks at business going forward. HR is front and center of the humanitarian crisis. All CHROs and senior executives should have learned that they must better utilize HR data and make human capital a better-understood and more strategic lever in business success and continuity — not only to manage the current situation but also to manage the workforce in the aftermath.

Post-COVID-19, organizations that focused on business outcomes and planned for possible future contingencies will do much better than those that lived in their silos. HR needs to quickly understand how the workforce is changing in terms of diversity, demographics, and capabilities — particularly as social distancing and work from home become the norm. As organizations let go of employees because of business losses, how will the face of employment change? Will organizations hire more contingent workers or more people who can work from home? What HR and senior executives learn from this crisis through big-data analytics will help them be successful in the near future and business-ready for future challenges.

SAP can help organizations be more data-driven and strategic

SAP, unlike other niche HR vendors, has decades of experience in business analytics across all industries and geographies. Hence it is well situated to help your organization build unique HR analytics for better decision-making. SAP can help you bring together all your organizational data — from people and enterprise data to big data, IoT, and beyond.

Big-data HR analytics for SuccessFactors customers

Posted on September 29, 2018July 13, 2026 by

Overview

Sabya Mitra

Big data HR Analytics

Big data HR analytics plays a crucial role in decision-making.

Today’s HR transformation doesn’t just happen with the automation of HR processes and services. It happens when an organization goes beyond automation and starts focusing on business challenges, business drivers, and measures that impact business results.

Through digital transformation, HR addresses business challenges and helps spur organizational growth. Better business insights help realize better decisions and enable HR to act decisively. To achieve digital transformation, HR needs to do new things in new ways — and this is where fact-based insights, derived out of HR data, enterprise data, big data, IoT, and beyond, help. Historically, HR has very rarely used insights and facts as the basis for its decision-making process. This is even more prevalent in the small and medium business (SMB) than the large enterprise (LE).

Why is the use of HR analytics within SMB organizations lower than in large enterprises?

SMB organizations often have disjoint systems and multiple data sources. They rely on Excel as a common tool for tracking information and lack the funding and resources to develop a business case for HR analytics.

Although large enterprise companies face similar problems, in those organizations HR can mostly piggyback on their broader enterprise analytics strategy — utilizing common funding, systems, tools, and workforce to build HR-specific analytics. Ironically, HR needs analytics and insights to remove some of the very barriers it faces to get HR analytics in the first place.

What benefits can SMB organizations gain by using analytics?

With limited resources and funding, SMB organizations cannot afford to make business decisions based on “gut feel” instead of solid “data.” This becomes critical. For SMB organizations, it is essential that they can address the following questions:

How timely, cost-effective, and efficient are your hiring practices?
How can we retain our best and most valuable employees?
How productive is our workforce in terms of overall revenue?
Do we have the right competencies now and for the future?
How competitive is our compensation strategy?
How can we best invest in people to fulfil our future needs?

If you can address the above questions in an effective, efficient, and affordable manner, then you save time, minimize manual effort, and get insights based on hard data. The insights you get from answering these questions help you develop and execute your digital HR transformation strategies to advance the entire organization.

What tools are available for SMB customers?

Before we talk about technology and which HR analytics solution to consider and why, let us first identify the essential components that make an HR analytics package functional and effective for SMB organizations. Any HR analytics solution should have the following capabilities, divided into three categories by priority.

Must have:

Features to build KPIs/measures to check the effectiveness of your HR function.
Pre-built connectors not only for your HRIS solution but also for your ERP solution.
Flexible data storage functionalities for your historical data.

Should have:

Analytical capabilities to analyze market trends across key talent and core HR areas.
Ability to build predictive scenarios based on available data for developing future strategies — e.g., employee flight risk, retention planning.

Nice to have:

Ability to do business planning — e.g., salary planning, manpower planning.
Ability to add open-source tools like R visualizations and others.
Out-of-the-box analytics that can kick-start your HR analytics journey and act as a platform for analytics based on organizational challenges.

We at Renew HR have selected SAP Analytics Cloud as our go-to solution for all our customers’ HR analytics needs, primarily because: all SAP SuccessFactors reporting is gradually transitioning to better leverage SAP Analytics Cloud technology (future-proofing your solution); SAP HCM or SAP SuccessFactors customers get pre-built, out-of-the-box connectors free of cost; it can do business intelligence, predictive analysis, and business planning in one place; it is cloud-based and mobile; it allows integration with R; and it is highly affordable on a per-user, per-month basis rather than the total number of employees — you buy as many or as few user licenses as needed.

SAP Analytics Cloud (SAC)

SAP Analytics Cloud can access data from across SAP’s cloud solutions, including HR (SAP HCM and SAP SuccessFactors), finance, and other applications and data repositories. It can be the single source of truth about a company’s most important business and people metrics — you can use it to monitor, simulate, and drive change in the digital economy, something standalone data discovery or HR analytics solutions cannot accomplish.

Meaningful insights, better decisions, and immediate action come together in SAP Analytics Cloud, which brings all types of data to life across people, places, and devices into a real-time enterprise experience for HR executives. With fully automated business intelligence capabilities that dramatically improve the quality and speed of reporting, as well as real-time collaboration, executives and leaders can instantly drill into key areas of the business — revenues, pipeline, margin, and people — and model business drivers on the fly to anticipate the future.

SAP App Center

SHARP HR Analytics packages are available on the SAP App Center. Clients visiting the SAP App Center can find:

Package 1 — Transforming your existing reports: take advantage of existing reports and get visualization and insights into the decision-making process.
Package 2 — Data archival, compliance, and historical data analysis: move out of legacy systems (SAP HR, Workday, PeopleSoft, ADP, Ceridian, UltiPro, etc.) without worrying about data archival, run analytics on legacy data, and stay compliant with state, federal, and international laws.
Package 3 — Core HR and compliance: extract insights through KPIs/measures using transactional data covering payroll, HRIS, time and attendance, and compensation, with predictive analysis, planning, and modeling.
Package 4 — Talent analytics: formulate the entire talent management strategy involving talent acquisition, performance management, succession and development, and learning.

The SAP App Center provides customers with real-time access to nearly 1,500 innovative partner solutions that complement and extend their SAP solutions, enabling digital transformation. App Center customers can buy solutions directly from partners and centrally manage purchases, billing, and vendor communications.

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