If you have experience with employee engagement, you’ll know that discussing the ROI of employee initiatives – including the time and energy involved – can be a tricky conversation with leadership.
And that’s because engagement isn’t the easiest thing to quantify – it’s not just about what your people do at work, it’s how they feel at work.
In this article we discuss different ways to measure engagement ROI, best tools to use, and how to show that ROI doesn’t always have to be about money.
It’s important to first understand the basics of ROI before getting into the nitty gritty of measuring employee engagement.
ROI is expressed and a percentage and can be calculated in three simple steps:
In formula terms ROI looks like this:
It seems straightforward enough, however employee engagement isn’t always the easiest thing to quantify – especially when you consider metrics like employee wellbeing, mental health, and productivity.
Let’s talk about how to measure employee engagement using different metrics.
Employee engagement isn’t all about money and profitability – in fact, it’s so much more than that.
Quantum Workplace put it really well: “ROI isn’t limited to financial metrics. It encompasses a broad spectrum of positive impacts, including cost savings, revenue growth, enhanced employee wellbeing, and more.”
Often the challenge for HR is to find ways to measure these benefits, so you can gain leadership buy-in and show your organisation’s decision-makers that employee engagement is always worth investing in.
It’s important to remember that ‘engagement’ in an umbrella term, and therefore can be measured in many ways.
Keeping track of how employees are feeling is one of the most important pillars of engagement. Because when people feel good at work, they’re more motivated and really put their hearts into what they do.
Engaged employees aren’t just more motivated, they produce higher quality work, too! Focus on measuring the quality of work instead of just the amount of work done. High-quality work means tasks are done right the first time, which saves time and resources.
Measuring team productivity and teamwork is key because it helps you see how well everyone is working together and getting things done. When teams are productive and collaborate smoothly, projects run efficiently, and everyone feels more connected and ambitious.
High absenteeism can signal issues like burnout or dissatisfaction. By addressing these issues, you can improve attendance, improve morale, and ensure a healthier, more engaged workforce, which ultimately strengthens business.
Monitoring retention and turnover one of the most crucial employee engagement metrics because it shows how well you’re keeping your talented employees.
High turnover is costly and disruptive. By understanding why people stay or leave, you can create a better work environment, retain top performers, and maintain a stable, experienced team that drives long-term business success.
Happy employees lead to happy customers. When your team is content and motivated, they provide better service and care. This positivity makes customers feel valued and satisfied, leading to loyalty, great reviews, and business growth.
Trust in leadership is a necessary metric that if way too often overlooked. Leaders have an enormous impact on employee happiness and their overall work experience – impacting levels of security, sense of belonging, and inspiration. So don’t forget to include leadership effectiveness and trust!
ROI isn't limited to financial metrics. It encompasses a broad spectrum of positive impacts, including cost savings, revenue growth, enhanced employee wellbeing, and more. 
Pulse surveys are incredible for measuring employee engagement because they provide quick snapshots of how employees feel at different times, helping you catch trends early and make timely improvements.
Pulse surveys give everyone a voice in shaping your workplace culture by gathering diverse opinions and insights regularly, creating a sense of involvement and transparency. Plus, they show employees that their feedback matters, encouraging continuous dialogue and showing your commitment to their wellbeing and happiness at work.
While communication via anonymous channels can be a little more difficult to measure, it’s a really important piece of the engagement puzzle.
That’s because when you allow employees to share honest feedback without fear of repercussions, it can lead to uncovering issues that might otherwise go unnoticed in other traditional feedback gathering settings.
Usually these issues relate to more difficult conversations, or taboo subjects which need the most attention and care.
Exit surveys are your final chance understand the deeper reasons behind departing employees’ decisions and gain honest perspectives into your workplace.
Sometimes these conversations are tough, but they provide a window into the aspects of your organisation that need attention.
By analysing exit survey data, you will be empowered to pinpoint trends and patterns that impact employee engagement, helping you to adjust strategies and create a more supportive and fulfilling workplace for your team.
Let’s walk through the steps of measuring employee engagement using the example of employee wellbeing.
Start by setting clear goals for what you want to achieve. These should always follow the SMART framework (specific, achievable, measurable, relevant, and timely).
For example, your objective could be to reduce stress levels among employees within the next 12 months by implementing wellness programs.
Use surveys to collect information from employees about their wellbeing. Ask questions about their stress levels, satisfaction with work-life balance, and opinions on current wellness initiatives.
Determine the expenses involved. This will include things like survey platform costs, staff time, and costs of wellness activities.
Now it’s time to assess the benefits and positive impact of your efforts improving employee wellbeing. This will often involve conducting a second survey and comparing how results have changed and improved over time.
Take time to do relevant industry research, and link monetary values where possible, such as the cost savings from reduced turnover, higher productivity and fewer absenteeism days.
Finally, use the formula discussed in the beginning of this article to calculate the ROI impact of your efforts.
For example:
If the Outcome from reduced turnover and increased productivity amount to £50,000 in business savings, and your Costs were £10,000, then the ROI would be (50,000 – 10,000 / 10,000) × 100 = 400%.
By following these steps you will show the tangible benefits of investing in your people.
We hope this article helped! If you’d like to learn more about Stribe surveys we’d love to show you more.
About the author
Starting out her early career as a journalist, Jade Madeley is an accomplished content writer with 8+ years’ experience across business, personal finance, SaaS, human resources and employee engagement. Working with Stribe, she crafts insightful content that brings complex HR topics to life and drives meaningful action.
