Introduction

As HR leaders are moving towards the future of work, they are not only focused on hiring the right kind of talent but also retaining them using various measures. One of the most important factors responsible for employee retention in any organization is engagement. According to research, engaged teams have shown 21% higher profitability and 17% higher productivity in comparison to their less engaged counterparts.

Key Benefits of Employee Engagement

Measuring and ensuring employee engagement is necessary for various reasons, some of which are mentioned below:

• Higher Retention Rates: By ensuring employee engagement HR leaders can increase the retention rate of the employees. When the employees are more engaged they are more likely to stay longer. According to a study by the Corporate Leadership Council, employees who are more engaged are 87% less likely to leave their organizations, this reduces the cost of recruitment and training.

• Higher satisfaction and happiness: When the employees are engaged they are more likely to be happy and satisfied with their work. This can help in fostering a positive work culture and ensure that everyone feels they are being valued.

• Reduced absenteeism: When the employees are engaged they are less likely to take unplanned leaves thereby ensuring a more stable workforce. According to studies, engaged employees exhibit 41% lower absenteeism as compared to its less engaged counterparts.

• Increased profitability: Organizations that have more engaged employees are also going to be more profitable. According to Gallup, engaged teams are 21% more profitable in comparison to less engaged ones. This is because of higher productivity, increased customer services and lower cost of employee replacement.

One of the best ways of understanding how to keep the employees engaged is to actually collect that information from themselves. Some of the top HR leaders often conduct surveys in order to collect feedback, this helps them in getting insights as to how they can improve the employee experience. One of the most popular ways of doing this is by calculating the employee net promoter score (eNPS). Once these organizations conduct eNPS surveys, they ask follow-up questions to help identify various gaps. This article aims to delve into different aspects of eNPS, what it means, how to calculate it, different misconceptions around it, and how it can be improved.

What is Employee Net Promoter Score (eNPS)?

Employer Net Promoter Score or eNPS, is a comprehensive metric that is used by employers to measure the loyalty and satisfaction of the employee. This score is aimed to measure how satisfied the employees are with their job. It can also be used to understand how likely the employees are to stay back in the company and recommend it as a good place to work to their family members and friends. This concept of eNPS is based on the concept of the Net Promoter Score system that was developed by Fred Reichheld, who was a partner at Bain & Company. This concept was first introduced in his 2003 Harvard Business Review article titled "The One Number You Need to Grow."

Categories of Employees in eNPS

When it comes to the eNPS system, it is similar to NPS, in the sense it also asks employees a series of questions, where they have to rate on a scale of zero to ten as to how likely they are to recommend their organization as a place to work. Based on the scores collected, the HR can segregate them into three distinct categories, they are:

• Promoter (Score 9-10): These are employees who are highly motivated and satisfied with their work. They feel they are being valued by their organizations and are likely to be more active while promoting the organization. They can act as brand advocates by spreading positive word of mouth about the organization and help in attracting potential talents.

• Passives/ Neutral (Score 7-8): These are the group of employees who are moderately engaged in the work that they do, however, they are not very enthusiastic about the company. While they might be satisfied with their position or work in the company they are not actively doing anything to contribute to its growth. This group of employees is highly susceptible to offers from competition.

• Detractors (Score 0-6): This refers to the group of employees who are unhappy and unsatisfied with the company. These employees actively criticize the company, resulting in negative word of mouth. They are a risk to the company as they can spread negative sentiments about the company both internally as well as externally.

eNPS vs. NPS: Key Differences

It is important to note that there is a difference between the NPS system and the eNPS system. When it comes to NPS, the feedback that is collected is usually associated with one particular customer, whereas eNPS is completely anonymous and is best suited for collecting work satisfaction surveys in a professional environment. When it comes to the eNPS system, only aggregate information can be accessed and analyzed, this helps in maintaining the anonymity of the data respondents. It has been observed that the eNPS score is usually lower in comparison to the NPS score. Sometimes the eNPS score can also be negative, while NPS scores tend to remain positive. This goes to show that the expectations of people from their employers are far greater than those from their suppliers. However one should also take into consideration, the emotional involvement of a person with their daily job is way more than that with the use of a particular product or service.

How to Calculate Employee Net Promoter Score (eNPS)?

Employee Net Promoter Score surveys are conducted at least twice a year, in order to make sure that the company stays responsive to their employee engagement levels. In order to calculate the eNPS score the companies usually follow the following steps:

Steps to Calculate eNPS

First, conduct a thorough survey among the employees in order to collect the required information. The HR team usually uses a standardized eNPS questionnaire, where the employees are asked to rate the likelihood of recommending their company on a scale of 0 to 10, where 0 is “not at all likely” and 10 is “very likely.”

Once the data is collected it is then used to categorize the employees into promoters, neutrals, or detractors. This is done to gain an understanding of the perception of the employees when it comes to their loyalty.

Then eNPS is calculated by subtracting the percentage of detractors from your percentage of promoters. The eNPS of a company can range from positive one hundred (+100) indicating the absolute best to negative one hundred (-100) indicating the absolute worst situation.

The formula for calculating eNPS is -

Employee Net Promoter Score = % Promoters - % Detractors

For example, in a company there are 30 Promoters, 20 Neutrals and 10 Detractors. The eNPS would be = (30-10) / 60 * 100 = 33.33

Employee Net Promoter Score Benchmark: What is a Good eNPS?

As previously mentioned an eNPS score can range from +100 to -100, however in a more realistic scenario both these numbers are achievable. Companies usually do not approach their eNPS keeping in mind these benchmarks, rather they should focus on what works for them. In the words of Julia Markish, Director of Lattice Advisory Services, companies need to focus on the internal benchmarks that they have set rather than focusing on what the competition does.

How to Interpret eNPS Scores

The eNPS score, like most metrics, can vary according to the industry the company is operating in. It can also vary according to the organizational structure. Therefore it is best to compare the eNPS score against the company’s own history or the benchmark set internally, this way one can take into account the unique characteristics and culture of the company. This also helps the firms to understand what actions or strategies are working in improving the eNPS.

Employee Net Promoter Score and Employee Engagement

While the employee net promoter score or eNPS cannot be proclaimed as the sole metric for understanding employee loyalty and advocacy for the company, it does help the organization to some extent to understand how engaged are the employees. According to Gallup reports, 51% of employees are disengaged at work and are likely to switch to a different organization upon receiving a better offer. While the eNPS is not a direct metric for measuring engagement, the employee net promoter score survey and some follow-up questions can be used to uncover different factors that are contributing to this disengagement.

The reason for disengagement can range from lack of recognition, stagnant work, limited growth opportunities, or malpractices within the management. The employee net promoter score survey questions are asked to the employees in an anonymous manner so that the HR team can identify these issues and through follow-up questions and actionable plans create a more engaged and motivated workforce.

The employee net promoter score can also be used to predict employee turnover, or how likely are the employees to discontinue working in the firm. When the employees exhibit a positive eNPS score it shows that they are happy and satisfied with the overall working environment, while those with negative scores are likely to quit. According to research, companies with highly engaged employees have noticed a 59% reduction in their employee turnover rates. Monitoring the eNPS is not only important, as it helps us in retaining talent but also reduces the cost of replacement of these talents. It has been deduced from different studies that the cost of rehiring or replacement of employees is way higher than the cost of retaining them. In fact, some of the US companies lose between $450 billion to $550 billion annually​, because of disengaged employees. By keeping track of the eNPS score organizations can ensure the employees are satisfied, reducing the chances of them leaving the company.

Strategies to Improve Your eNPS Score

It is impossible to keep everyone satisfied all the time. The aim of improving the eNPS of a company is to convert as many employees into promoters as possible. Some of the ways in which a company can ensure that its net promoter score for employee satisfaction increases are mentioned below:

• Actionable HR Strategies to Improve eNPS: There are various strategies that the HR department can implement in order to improve employee engagement, like conducting regular surveys in order to collect feedback from the employees. They can also create channels or avenues for the employees to share their thoughts like one-on-one meetings, anonymous surveys, and suggestion boxes. By doing this the company not only encourages employees to come forward and share their thoughts but they can also get a sense or pulse of what the employees feel about the workplace/ the company itself.

  It is also important for an organization to ensure that the employees feel valued. By implementing various forms of recognition and rewards systems they can ensure that the company is valuing their efforts and celebrating their achievements. On top of this, if a company also invests in various training and development opportunities for the employees, the employees are more likely to be engaged in their work.

• Role of Management & Leadership in eNPS Improvement: The management of the company also plays a crucial role in improving the eNPS. By ensuring that the communication between the employers and employees is transparent, the organization can build trust and engagement. One of the most effective ways to increase engagement is to take constructive criticism and communicate openly with the detractors, so as to understand what problems they face and how they can be addressed.

  Some firms also encourage the employees to make some decisions on their own thereby encouraging autonomy and decision-making. Organizations often provide their employees with all the required tools and resources that are needed in order to perform their duties. This ensures that no one feels lost at work, and can effectively contribute in achieving the goals of the organization.

• Implementing Employee Well-Being Programs: When it comes to ensuring employee engagement, well-being programs are essential. Companies offer different kinds of health and wellness programs, the aim of this is to offer a holistic wellness program that would focus on both the physical and mental well-being of the employees. They also offer different employee assistance programs (EAPs) through which employees can get confidential counseling and support services for various personal and work-related issues.

  These days companies are also allowing their employees to work from home, by allowing remote work and flexible work hours they ensure that the employees can achieve a decent work-life balance. This allows the employees to schedule and plan their work schedule and personal responsibilities, in a way where they do not feel they have to compromise on their personal life because of work.

Common eNPS Myths & Misconceptions

There are some common misconceptions around eNPS, some of them are mentioned below:

• Employee Net Promoter Score is not a comprehensive measure of employee engagement, but in reality, it's one of the many metrics available. Often it is believed that a high eNPS means everything is perfect, however, this metric fails to capture the nuances of employee sentiment.

• Even though eNPS is very useful it is not infallible. Usually, eNPS scores are based on simple survey questions which might fail to capture the complexities of human emotions. There are also various social and cultural factors that can affect the responses. All these factors can decrease the accuracy of eNPS.

• The eNPS score can act as a snapshot of employee engagement but fails to capture the entire picture. When it comes to employee engagement it is multifaceted in nature, and other metrics like turnover rates, productivity, and qualitative feedback are also equally important.

Future of eNPS in HR Analytics

The employee net promoter score is now being revolutionized with the implementation of various technologies. AI powered tools can now provide deeper insights into the employee feedback, they are now capable of understanding open-ended responses and categorizing them into different themes and topics. Apart from this, eNPS along with other HR metrics can also be used in areas of performance reviews and engagement surveys. This creates a holistic approach, creating a 360-degree feedback culture, wherein both macro-level cultural health and micro-level performance are considered.

The rise in the use of data analytics can help HR teams to leverage the eNPS data to identify various trends and patterns. By analyzing these patterns in eNPS scores over time, management can identify potential issues before they escalate. Organizations these days are also using eNPS on a real time basis to understand employee satisfaction on a continuous basis, making the work environment more adaptive and responsive.

Conclusion

In conclusion, it can be said that an eNPS is not just a number, it’s a reflection of how dedicated an organization is to ensuring employee engagement and satisfaction. If an organization consistently tracks and improves its eNPS score it can boost employee retention, and increase productivity and motivation. Organizations should aim to make communication transparent and introduce various recognition programs and well-being activities to foster a thriving workplace. Investing in engagement and morale of the employees has various advantages both in the short run as well as in the long run. Organizations need to explore various ways in which the eNPS score can be improved, as when employees are happy and engaged, the entire organization benefits from it.