(Editor’s Note: Today’s post is brought to you by Workify, an all-in-one people management software platform. Workify is a technology-enabled service that helps companies measure and trend employee engagement over time through continuous feedback loops. Enjoy the post!)
It’s sad to say but businesses don’t appear to be really moving the needle when it comes to employee engagement. I ran across this article from Gallup that reports managers account for 70 percent variance in employee engagement. I still believe part of the reason companies are struggling with engagement is they are having a hard time defining what engagement looks like and, as such, managers can’t identify or measure it. But what if there was an engagement related metric that organizations easily understood?
Net Promoter Score (NPS) is a common business index that measures the likeliness of customers recommending the company’s products or services. Think of it as “refer-ability”. The reason organizations use NPS as a business metric is because they can see a clear line of sight between it and business success. The more referrals the company receives, the more business they get, and the more profitable they would be.
Employee Net Promoter Score
Now let’s take the NPS concept and apply it to employee engagement. Employee Net Promoter Score (eNPS) is an index that measures the likelihood that an employee would refer candidates or customers to the company. The logic is similar: the better the organization is as an employer, THEN the more employees are engaged and satisfied with their work, AND the more people they will recommend.
Workify’s research and analysis of best practice methodologies found there were four common themes (aka the 4C’s) driving eNPS:
- Commitmentto contribute to the future success of the company
- Connectionto the community they work in, whether to its mission, its goals, or its people
- Ability to make a contributionby performing great work every day
- Readiness to challengethemselves to improve, and challenge the company to go further as well
I recently had the opportunity to talk with Stephen Huerta, CEO of Workify about how they developed their eNPS model and their approach. “We believe that engagement is driven through the individual experience an employee is having. As a result, we start with an employee-centric perspective on engagement and culture. We started by looking at the attributes of highly engaged employees and the key motivating factors that lead people, and teams, to do great work. Our 4C’s (commitment, connection, contribution, and challenge) are the key levers that drive engagement from the individual employee perspective but can be influenced by 8 additional indicators we monitor at the organizational level.” The 8 additional indicators are reflected in Workify’s eNPS model.
I know when it comes to employee satisfaction, many of us feel we’ve seen it all and don’t get excited about the conversation. But I have to say, the eNPS conversation is different and it’s worth paying attention to for three reasons.
- It’s a familiar business term. The Society for Human Resource Management (SHRM) competency model includes business acumen as a key skill for human resources professionals. We’ve heard it before – HR pros need to speak the language of business. NPS is the language of business. So, let’s use it to talk about engagement in a business context.
For organizations focused on addressing employee satisfaction, making a connection between NPS and eNPS could help create buy-in and it could bring agreement among the management team about how to address the issue.
- It’s measurable. Organizations measure their NPS on a regular basis, like profit and loss statements. The same can be done with eNPS. Today’s technology allows organizations to regularly take a pulse on the workforce, in real time. In addition, organizations can use other metrics – like referrals – as a visible metric that the company’s eNPS is thriving.
Chances are organizations are already tracking some referral metrics, so this becomes a good secondary barometer that the eNPS is accurate. It can also send a flag that the eNPS is in trouble if referral activity declines.
- It aligns with the company. I don’t know of a single company that doesn’t want happy employees and referrals. Even if you’re a non-profit entity or public organization – you still want satisfied employees and candidate referrals. Having a healthy referral mechanism benefits the bottom-line. That’s why NPS and eNPS matter.
Many organizations tell employees “everyone is a part of the sales department” or “everyone is a part of the recruiting team”. If that’s true, then NPS and eNPS are key components in organizational culture and strategy. Organizations cannot rely on everyone to get things done and ignore employee satisfaction.
I must admit that I found eNPS a pretty simple model, which is what excites me about Workify’s model. Huerta agrees, but reminds us that employee engagement is complex, which is why it’s so hard for people to define. “For organizations that might be skeptical about eNPS and the connection with the 4C’s, my first response would be that, ‘it’s not that simple’. There are essentially three dimensions of engagement we assess:
- Organizational factors that motivate or demotivate employees (i.e., 8 indicators),
- Employee drivers of engagement (4C’s), and;
- Employee satisfaction (i.e., eNPS).
Looking at any single dimension will give you part of the story but not the full picture. That’s why we built our holistic culture model, which starts with the 4Cs and looks at additional factors as well.”
Focusing on Employees Benefits the Bottom-line
More than ever, organizations need to focus on employees and employee satisfaction. Hiring employees is expensive. According to SHRM, average cost per hire is $4,129. Turnover is expensive. Research suggests that replacement costs can be 50 – 60 percent of an employee’s salary with total turnover costs exceeding 100 percent. Creating a workplace where employees are engaged and satisfied with their work is essential, not only to morale and the general working environment, but the bottom-line
But just like the marketing department, HR wants to know that the programs, training, etc. they’re creating are having a positive impact. So, measuring results is important. Why not use a proven metric that the organization understands? It only makes good business sense.
If you would like to learn more about eNPS and how it relates to employee engagement, you can download Workify’s new ebook “Building an Employee Engagement Program for a Modern Workforce: 3 Step Guide for Taking Action on Employee Feedback“. Employee engagement is going to remain a priority for organizations. It’s time to take a different approach.
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