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Why Most Employers Measure Engagement Backwards

CoAdvantage-Employee engagement is indisputably an important metric for employers to monitor. Study after study has found that organizations with highly engaged employees outperform those without (by 202%, according to one study). As former General Electric CEO Jack Welch has said, “No company, small or large, can win over the long run without energized employees who believe in the mission and understand how to achieve it.”

Engagement is tough to master though, not least because it’s something of a “squishy” concept – one that’s hard to pin down with a clear, easily measurable definition.

But part of that may be because of how most employers look at it.

According to Glint’s 2020 State of Employee Engagement Report, the most commonly used indicators of employee experience (used by 70% of HR professionals) are retention and turnover data, followed by exit interviews (52%). The only problem: those are reactive, backward-looking, lagging indicators that can identify engagement issues only after they’ve already affected the company negatively.

So, what leading indicators can employers use instead?

1: Employee feedback

Simply asking employees about their experience is one of the best ways to stay on top of engagement issues, presuming the feedback is solicited before an exit interview. Organizations can gather feedback through a formal interview process, internal surveys, or more informal communications with managers or via in-house communication systems. And here’s the interesting thing about employee feedback: simply giving employees an opportunity to provide input can itself drive employee engagement.

2: Performance data

How are employees performing? If engagement leads to higher performance and productivity, it’s reasonable to expect dips and bumps in engagement to be reflected in performance data. This requires the organization to stay on top of performance over time, however; otherwise, you’ll miss changes until it’s too late. The methodology used to measure performance also needs to remain consistent. Otherwise, you’ll end up comparing apples to oranges. One issue: performance data may be able to show you trends in employee behavior and achievement, but it won’t necessarily tell you why. If you spot a sudden change, you’ll need to investigate further to get that information.

3: Absenteeism

As with performance data, employee disengagement can be reflected in increased unplanned absences by workers. Unplanned absences can also worsen engagement issues overall, as the employees who do show up will have no choice but to pick up the slack left behind by their absent colleagues. That can damage morale and engagement right there.

Ultimately, employers need to make a greater effort to spot engagement issues before they lead to decreased productivity and increased turnover.

CoAdvantage, one of the nation’s largest Professional Employer Organizations (PEOs), helps small to mid-sized companies with HR administration, benefits, payroll, and compliance. To learn more about CoAdvantage’s ability to create a strategic HR function in your business that drives business growth potential, contact us today.