How do you calculate Employee Engagement ROI with the Engagement Formula?

Calculating Employee Engagement ROI involves using an engagement formula that considers various factors. Start by quantifying the costs associated with engagement initiatives, including surveys, training, and events. Then, measure the impact of improved engagement on key performance indicators such as productivity, retention, and customer satisfaction. Subtract the costs from the benefits and divide by the costs to get the ROI percentage.

OMG, I'm not sure I've heard of a more ridiculous faux use of math than the Engagement Formula. You know how you measure employee engagement? You don't. You engage employees to come up with specific ways to grow earnings with specific earnings commitments and then you measure the earnings they produce. When a company can say that our employees came up with 3000 specific ideas to grow earnings by $400 million with sustainable, smart, idea then that company knows it is doing a good job engaging employees!

Not everything can be measured by math. This task can be very challenging for many organizations, especially when they lack access to data such as industry-specific engagement score benchmarks. While there may be standard engagement principles that drive engagement, such as recognition and well-being programs, engagement in smaller organizations will look very different from that in the larger ones. Mission and values of any organization are important drivers, they attract people who share the same vision. Every company has its own unique set of missions and values which can’t be mathematically compared, it’s like comparing one person’s unique talents with another’s. It’s not measurable, in my opinion.

Yes, I know…we all do! Kevin Kruse's Engagement Formula has been widely recognized and accepted as a valid tool for understanding employee engagement. However, I've always been cautious about relying solely on a mathematical formula to quantify something as subjective as employee engagement. As a former Communications and Engagement Program Manager, I've observed how external variables and additional factors can greatly impact engagement levels, extending beyond the six factors outlined in the formula. It's crucial to approach this formula (or any other!) with a critical perspective and assess its relevance and applicability within each specific organizational context.

Calculate Employee Engagement ROI by treating engagement as an energy ecosystem. Use an Engagement Index to measure energy levels, and quantify improvements through energy uplift, productivity boosts, and cost savings. Subtract the investment in engagement initiatives from these benefits and divide by the investment to find ROI. Visualize this through storytelling, mapping employee journeys and linking engagement to outcomes. Treat engagement like a stock portfolio, tracking growth in employee value. This creative approach makes engagement ROI both relatable and measurable.

A value will be obtained from the results obtained from survey studies to be conducted within the company at certain periods. Options for these measurements may include main items such as trust, education, leadership, career, fringe benefits and wages.

I'm not keen on the formula... If you're able to address the individual items in the formula, you know where to improve, so focus the engagement score is less important. If you're not able to address the individual items, knowing the score becomes irrelevant. The individual contributors to the formula make sense. Focus at this level of detail to improve engagement. I like EVP as it goes one step further by assessing importance to employees as well as how good the factors are. For example if trust is low but noone cares, focus might be better on another area like wellbeing, or monetary reward (bad example as I doubt this specific example plays out but I hope you appreciate the point re importance)

I beleive the best method to measure employee engagement is asking about e-nps and/or if they are willing to stay in the company for the next years. I do not believe we need a very complicated and not objective formula to measure employee engagement.

These key phrases in the passage to the left share an important and common theme that says a lot about the "value" (and more importantly, significant limitations) of "The Engagement Formula..." > comes with certain limitations > may not be applicable to all organizations and teams > is not a static measure > does not take into account all the variables and interactions that influence employee engagement and its outcomes > should not replace a comprehensive and holistic approach to employee engagement > should [only] be used to complement other methods and frameworks

Don't. The simplicity of the resulting number is not tangible enough for employees to engage with, and the detail you get from the formula itself can be better assessed with consideration of importance of the factors and the qualitative feedback that looks at root cause!

A more effective method of assessing employee engagement is to identify an organizational goal, the metrics that the goal can be measured by, and working backwards to implement appropriate engagement initiatives that can impact those metrics. It's also important to consider other factors that may impact the outcome(s) at the same time to better isolate what's driving results. Combining quantitative and qualitative methods from a variety of sources will help to tell a more holistic engagement story.

I'd guard against trying to use a mathematic formula to capture the mood in your business. I suspect like most of these types of 'equations'- the numbers can mask underlaying issues or areas of success. Chances are- the numbers just balance out and probably look 'fine'. The devil is in the detail and the most interesting part of measuring and improving engagement comes from the conversations and thoughts of real people.

What is the Engagement Formula? First, it is necessary to create a common ground among our team members. This can be seen as business goals for the way of working. However, a mutual agreement is also essential for social interdependence. At its simplest, everyone should know that behaviors will align with company values, add value, and adhere to rules that are appropriate to social and community life as well as the constitution. The entire team must be involved in implementing these established rules. Additionally, when setting the rules, how they will be measured and scored should also be clarified by the team. Thus, belonging to the team and the company will increase.

the formula disengages before you even try and work it out as it is too complicated and doesn't mean anything to most employees in a business. We need to move away from surveys, data and formulas as engagement isn't static... someones engagement levels can change by the hour, day, week and month so do you really get a true reflection with an annual or bi-annual survey? Surely the answer is to have something meaningful to everyone, that is simplistic and for the individual to be able to say how engaged they are... then support managers to have more effective engagement conversations with their employees. Do this and watch the productivity go up, profits go up and your retention of top quality employees go up.

For me, however you decide to measure engagement, I would recommend not only listing the following five factors of employee engagement but also living them. For each factor, list three initiatives your organization takes to support them. 1. Maintaining a strong relationship with the manager. 2. Clear communication of expectations and goals. 3. Providing the right materials, equipment, and information to achieve the desired outcome. 4. Encouraging personal and professional development. 5. Implementing a recognition system in which top performance is recognized.

To calculate Employee Engagement ROI. - Identify your goals and expected impact/growth. - Subtract the net benefits (Your Growth) from the cost. - And divide the result by the total cost. - This gives you the ROI. It's important to understand that the return on investment (ROI) of employee engagement isn't just about financial gains. It's also about creating a positive work atmosphere, promoting employee satisfaction, and ultimately driving organizational success. Therefore, when assessing the impact of engagement initiatives, it's crucial to consider both quantitative factors such as the numbers, as well as qualitative factors like the impact on employees and the organization.