Are you a fan of the company you work for? Would you say mostly positive things to someone interested in working at the company? Employers today want to know about the loyalty of their workforce—and how loyal they may be in the years ahead.
Like an elevator, employee loyalty can only move in two directions: It’s either going up or it’s going down. Because it’s constantly changing, executives want to know if that loyalty is rising or falling. But how do you measure something as abstract as loyalty?
First, consider customer loyalty. For more than two decades, companies have leveraged Net Promoter Score (NPS), a metric developed by Bain and Company, to measure how loyal their customers are to a brand. The score is calculated by surveying customers and asking them one direct question:
“How likely are you to recommend our company?”
NPS is designed to measure customer loyalty based on their answer.
This simple perception can help leaders successfully gauge the overall feelings of customer satisfaction consumers harbor about the company and its products.
“Like an elevator, employee loyalty can only move in two directions: It’s either going up or it’s going down.”
What is Employee Net Promoter Score?
Beyond customer experiences, companies sought to measure employee experiences, and how loyal their employees were likely to be to their organization. For this, they created a metric based on NPS, appropriately named Employee Net Promoter Score, or eNPS.
Today, executives trust eNPS as a valuable employee engagement metric to measure employee loyalty.
Companies choose to measure eNPS to achieve long-term goals like keeping employees more engaged—and keeping those employees longer. But since employee loyalty is not a constant, it’s a score that can go up and down over time.
Keeping eNPS scores high or on an upward trend can improve company culture and drive engagement levels, which we’ll discuss below. But first, let’s look at how this tool is used to measure employee engagement.
How do you calculate eNPS?
It’s fairly easy to learn how to calculate eNPS. Like NPS, it’s based on one simple question that helps you to gauge employee sentiment and loyalty:
“On a scale of 0-10, how likely are you to recommend this company as a place to work to your family and friends?”
That’s it. That’s the eNPS survey question. That said, you can add additional eNPS questions to your employee survey. But they are not required to make your calculation.
To calculate a score, you first need to rank your Promoters, Passives, and Detractors. Following is the criteria to segment the employee satisfaction levels of your workforce:
• Employees are considered Promoters if they answer with a 9 or 10.
• Employees are considered Passives if they answer with a 7 or 8.
• Employees are considered Detractors if they answer with 0 to 6.
Next, plug the numbers into the eNPS formula:
% of Promoters - % of Detractors = eNPS Score
A company’s eNPS score can range anywhere from -100 to 100. You’re probably wondering why the percentage of Passives is not necessary to make the calculation. It’s because Passives are considered neutral. In other words, they are not likely to promote the company, and likewise, they are not likely to talk negatively about the company.
Here’s a quick example to help you visualize how it works. If you have 100 employees, and 42 rank as Promoters, 28 rank as Passives, and 30 rank as Detractors, then your formula would be:
42% Promoters - 30% Detractors = 12 eNPS Score
What’s a Good Score?
With a range of -100 to 100, what is considered a good eNPS score? Scores in the range of 10 to 30 are considered to be good. Scores anywhere near 50 are considered excellent. QuestionPro reports that the average eNPS score is 14. The survey software company also reports that nearly 30% of employees are disengaged (those who answer with a 6 or lower to the eNPS survey question).
The benefits of Employee Net Promoter Score
Perhaps the most attractive benefit of eNPS is that it’s a quick and easy way to gauge employee sentiments about the company, which translates to their level of loyalty. It’s a measure of how employees feel, which can help leaders to understand if they are providing the right employee experience.
Of course, employers are always searching for ways to improve Employee Net Promoter Score. When employee loyalty scores soar higher, it’s an indication that job satisfaction and employee engagement are also on the rise. Regularly conducting eNPS surveys can help management know whether company efforts to improve company culture are working.
eNPS scores over time can indicate whether a company culture is thriving or struggling. Organizations regularly use this metric to determine how efforts to improve the culture are performing. To learn more about company culture, see our Company Culture Guide.
Another benefit of measuring eNPS is to better predict how long employees will stay with their company. When employers create an atmosphere where Promoters are common, they can expect that they will enjoy lower attrition rates and increased tenure.
Promoter traits: working harder, staying longer
What does the percentage of promoters tell us about an organization? Remember, these are the workers who answered the ultimate question—whether or not they would recommend their company as a place to work—with a 9 or 10. Obviously, the goal for organizations is to build a culture where as many employees as possible fit into this category.
Promoters don’t just like the place they work, they rave about it. Their satisfaction carries through to the way they work and a higher level of engagement. In essence, Promoters take shape when an organization successfully creates a great employee experience. To learn more about what goes into the employee experience, read An Engaged Workforce Begins and Ends with Employee Experience.
Engaged employees work harder and more productively. On top of that, Promoters also benefit an organization is by staying with the company longer. This reduces employee turnover and in turn, keeps those long-term Promoters in the workforce.
Consistent communication with employees is essential in gauging whether your pool of Promoters is growing or shrinking at any given time. More on that later.
Detractor traits: less engaged, feeling dissatisfied
What does the percentage of detractors tell us about an organization? By answering the eNPS survey with a score ranging from 0 to 6, these employees are communicating that they are not currently fans of their organization. Whether it’s because of their lack of trust in leadership or a poor work environment, the bottom line is clear—a large percentage of Detractors means that employee engagement is low.
Aptly named, Detractors spread negative energy. They detract from engaging work, they detract from innovative ideas, and they detract from a common sense of purpose. Left unchecked, they can afflict some real damage to any workplace culture.
Business leaders can keep tabs on this subsection of employees and note when the percentage is growing or shrinking. The good news is that by performing regular surveys, managers can better understand whether new engagement programs are moving the needle in the right direction.
Recognition can build more Promoters
An obvious goal for any human resources department tracking eNPS is to increase the number of Promoters in the workforce. An HR team can accomplish this using many proven tactics. This includes implementing or improving activities designed to increase engagement. One of the activities to focus on is improving employee recognition.
Why focus on something as simple as appreciation? Because nothing is quite as powerful as employee recognition when your aim is to improve the employee experience.
Market research from O.C. Tanner’s 2021 Global Culture Report shows that when an organization invests effort to understand employee recognition preferences, the odds of having Promoters on the eNPS scale increases by 95%. This shows that employees care about the ways their employer expresses appreciation. They want a say in how they are acknowledged and rewarded. Additionally, organizations with integrated recognition are:
• 4X more likely to have highly engaged employees
• 73% less likely to have layoffs over the past year
• 44% less likely to have employees suffering from burnout
“When an organization invests effort to understand employee recognition preferences, the odds of having Promoters on the eNPS scale increases by 95%.”
Recognition impacts eNPS in difficult times
Can employee recognition during a crisis make an impact on whether employees will become Promoters? O.C. Tanner conducted Omnibus surveys during the Covid-19 pandemic and found that those who reported their team had been recognized more frequently for their work recently, compared to before the COVID-19 pandemic, scored an 82% increase in odds they will promote their organization to others.
Additionally, those who reported their organization helped them maintain a good work/life balance during the COVID-19 pandemic showed a 178% increase in odds they will promote their organization to others.
Solid practices for employee recognition include showcasing accomplishments on an internal wall of fame, allowing employees to choose personalized gifts, and promoting peer-to-peer recognition on teams. For more unique ideas on how to deliver a great employee experience while expressing thanks, read 20 Creative Ways to Show Employee Appreciation.
Loyalty at large companies fluctuates too
Even large organizations making an effort to improve loyalty can see employee loyalty levels fluctuate greatly. This means that company that is currently doing extremely well one year, may not be doing as well the next.
One aggregator of workplace intelligence, Blind, conducted an eNPS survey among Facebook, Amazon, Apple, Netflix, and Google. The results indicated how differently these large companies can be perceived by their own workers. In the study, the firms earned the following scores when employees were asked if they recommended their company as a great place to work:
This survey was conducted in the middle of the 2020 pandemic. As you can see, the scores were all over the map. Netflix earned an excellent score of 52, while Amazon posted a disconcerting score of -39.
March 2020 eNPS Scores
The research showed that in March of 2020, 57% of all professionals feared being laid off. Yet only 36.6% of Facebook employees shared that fear during the same period. This indicated that Facebook employees felt a greater sense of job security, which was reflected in a positive eNPS score.
More ideas to improve employee loyalty
Other methods for improving the employee experience include promoting a healthy work-life balance. When workers feel that their time away from work is respected, they are less likely to experience burnout and stress.
A big part of any employee experience are the benefits that come with the job. Ensuring that healthcare coverage and other company benefits are attractive can go a long way to making employees happy. Seek to foster a work environment where all employees have access to opportunities and know they are valued.
Any investment in employee experiences that lead to more satisfied employees—and more Promoters in the organization—is worth the expense.
Use eNPS to survey your workforce regularly
An eNPS survey can be a valuable tool, but only if you use it often. Because employee loyalty is constantly changing, surveying your workforce regularly can give you the best indication as to whether loyalty is rising or falling. Reviewing survey results quarterly, for example, can help leaders to turn simple, honest feedback into a benchmark metric and identify trends throughout the year.
If you need help monitoring your eNPS score on a regular basis, O.C. Tanner’s Culture Cloud recognition solutions do that for you with built-in surveys and dashboards that make visibility to eNPS easy. Our measurement team can also help you understand the correlation between employee recognition and eNPS, so you can pull the right levers to keep those scores rising.
The bottom line is that by monitoring the eNPS ups and downs, employers can react appropriately with tactics designed to improve the employee experience, build a positive workplace culture, and drive better business performance.