Calculating the ROI of Real-Time Employee Engagement

CalculatingtheROIofRealTimeEmployeeEngagement

In a highly competitive economic climate that spans the globe, more organizations are forced to correlate their efforts to improve corporate cultures more closely with human capital analytics. One of the questions that the Thymometrics’ team gets asked often is, “How do we calculate employee engagement?” Human resources has become increasingly about using data to measure everything from employee retention rates to production results. So, it only makes sense that organizations would want to calculate employee engagement results.

Employee engagement has been described by the Deloitte University Press Global Human Trends Report as, “how people feel about the way things work around here vs. culture that describes the way things work around here.” It takes a mindshift to see how corporate efforts to provide a better experience for employees with a more caring and receptive culture produce better levels of employee engagement — when done consistently.

Why measuring employee engagement matters so much to your business

Every tool that we use as HR professionals must be able to demonstrate improvement in some area that the organization is having challenges with. Recruiters use data to measure how quickly and how well they match candidates with job openings. Training departments use data to determine how much more productive employees become after training happens. Employee engagement levels are critical to measure because they reflect the success of most other HR initiatives. We know statistically that employee engagement is only around 30% of the total employee population, according to Gallup data for the last 8 years. Without a way to measure this, how can any organization understand how to improve and bring these numbers up? More importantly, having a picture of what is happening now vs. last year is made possible with real-time employee engagement data.

Another concept in employee engagement has to do with the costs associated with replacing unhappy or unengaged employees. The Society of Human Resource Management advises that for every salaried employee that must be replaced, it can cost 6-9 months of salary; and for executive positions this can be as much as 200% of the lost employee’s annual salary. Even long before an employee leaves, there can be months of low productivity, negativity, and other problems that can reduce profitability for the business — even driving other employees off.

From a business standpoint, how do we effectively calculate the return on investment (ROI) of employee engagement?

There are a few ways to approach the ROI of employee engagement. First, We must look at what engagement looks like for our company before, and after implementing a resource like Thymometrics. In other words, what does the normal amount of engagement look like and then how do we see things improving with the use of employee engagement surveys and feedback. Secondly, we need to consider how much the investment is paying off, in the form of greater employee retention, more favorable reviews of the company, ease in which the company attracts new candidates, how well customers rate our employees and solutions, and more.

Methods of calculating the ROI of employee engagement

There are probably a few mathematical theories we could discuss here when it comes to designing an employee engagement calculator of sorts. But this is not something that most human resource practitioners have time to do on a regular basis. But what we do know is how tracking and visualizing employee engagement over spans of time help to create a powerful measuring resource.

On the other side of calculating employee engagement is understanding how to use this information to make further improvements to the corporate culture. Think of this as a roadmap to greater engagement. The data can be parsed down to singular topics or even departments to identify the most pressing needs where the difference can be felt by employees. When employees see that things are changing for the better, this increased morale can be measured through 360 degree surveys.


If you’d like to find out more about the ROI of real-time employee engagement, then please contact Thymometrics: info@thymometrics.com, call +1 646 760 9323 (US) or +44 (0) 1223 750 251 (Europe) or visit thymometrics.com.

Image courtesy of hywards at FreeDigitalPhotos.net

About the author

David Godden

An online marketing entrepreneur with over 18 years experience in the high-tech sector, specialising in HR SaaS solutions. Responsible for the marketing success of several US and European-based start-ups and the international launch of ExactTarget, Pardot and eTrigue. https://uk.linkedin.com/in/dgodden

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