Like an elevator, employee loyalty can move in only two directions: up or down. Because it is constantly changing, executives want to know if their employees’ loyalty is rising or falling — and what it might look like in the years ahead. But how does one measure something as abstract as loyalty?
What is the employee net promoter score?
For more than two decades, companies have leveraged the net promoter score (NPS) to measure how loyal their customers are to a brand. The score is calculated by surveying customers and measuring their responses to one direct question: “How likely are you to recommend our company?”
As companies sought to measure employee experiences and how loyal their employees were likely to be to their organizations, they used the NPS as the foundation for a new metric appropriately named the employee net promoter score, or eNPS. Today’s executives trust eNPS as a valuable employee engagement metric to measure employee loyalty. Companies choose to measure eNPS to achieve long-term goals such as keeping employees more engaged—and keeping those employees longer.
Because employee loyalty is not a constant, eNPS can go up and down over time. Keeping these scores high or on an upward trend can improve company culture and drive engagement levels (as discussed below). But first, let’s look at how this tool is used to measure employee engagement.
How is eNPS calculated?
Like NPS, eNPS is easily calculated based on responses to one simple question. For eNPS, the question is designed to gauge employee sentiment and loyalty: “On a scale of 0 to 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. (Companies are free to add more eNPS questions to their employee surveys, but any additional questions are not required for the calculation.)
Once the survey results are gathered, a company can calculate its eNPS score by first ranking and tabulating the promoters, passives, and detractors among the respondents:
• Promoters: employees who answer with a 9 or 10
• Passives: employees who answer with a 7 or 8
• Detractors: employees who answer with 0 to 6
Next, plug the numbers into the eNPS formula:
% of employees who are promoters
– % of employees who are detractors
(The employees who are passives are not included in the calculation because they are considered neutral. In other words, they are both unlikely to promote the company and unlikely to talk negatively about the company.)
As an example, consider an organization with 100 employees. Based on their responses to the survey question, 42 of the employees are categorized as promoters, 28 of them as passives, and 30 as detractors. Plugging those numbers into the formula looks like this: 42 – 30 = 12. Thus the eNPS for this company is 12.
A company’s eNPS can range from -100 to 100. Scores in the range of 10 to 30 are considered to be good. Scores anywhere near 50 are considered excellent. The average eNPS is 14.1
What are the benefits ofeNPS?
Perhaps the most attractive benefit of eNPS is that it’s a quick and easy way to gauge employee sentiment about the company, which translates to their level of loyalty. This measurement of how employees feel can help leaders to understand if they are providing the right employee experience. Rising loyalty scores indicate that job satisfaction and employee engagement are also on the rise. Of course, employers are always searching for ways to improve their eNPS.
By conducting eNPS surveys regularly, management can know whether efforts to improve company culture are working and whether it is thriving or struggling. Measuring eNPS also gives companies better predictions about how long employees will stay with them. When employers create an atmosphere in which promoters are common, they can expect to enjoy lower attrition rates and increased tenure.
Promoters work harder and stay longer.
What does the percentage of promoters reveal about an organization? Remember, these are the workers who, when asked whether or not they would recommend their company as a place to work, answered with a 9 or a 10. Promoters don’t just like where they work—they rave about it. Their satisfaction manifests in how they work and in their higher level of engagement. In essence, promoters exist when an organization successfully creates a great employee experience.
Engaged employees work harder and more productively. They also benefit an organization by staying with the company longer, thus reducing employee turnover and keeping those long-term promoters in the workforce.
Detractors engage less and feel dissatisfied.
What does the percentage of detractors reveal 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 their dissatisfaction arises from their lack of trust in leadership or from a poor work environment, the bottom line is clear: a large percentage of detractors is a sign of low employee engagement.
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 inflict some real damage to any workplace culture. By performing regular surveys, though, managers can better understand whether new engagement programs are moving the needle in the right direction.
Recognition can build more promoters.
Obviously, an organization should want as many promoters as possible, and a top goal for any HR department tracking eNPS is to increase the number of promoters in the company. One way to achieve this is to implement or improve activities designed to increase engagement—in particular, employee recognition.
When a company seeks to improve the employee experience, focusing on something as simple as appreciation can bring big rewards: recent market research indicates that when an organization invests effort to understand employee recognition preferences, the odds of having promoters on the eNPS scale increases by 95 percent.2 Employees care about seeing their employers express appreciation and they want a say in how they are acknowledged and rewarded. (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.) Additionally, “organizations with integrated recognition are: 4 times more likely to have highly engaged employees . . . 73 percent less likely to have layoffs over the past year, [and] 44% less likely to have employees suffering from burnout.”3
Recognition has an impact on eNPS during difficult times.
Can employee recognition during a crisis affect whether employees will become promoters? In extensive surveys conducted during the COVID-19 pandemic, respondents whose teams had been recognized more frequently for their work recently (compared to before the pandemic) were 82 percent more likely to promote their organizations to others. Additionally, those who reported that their organizations helped them maintain a good work–life balance during the pandemic were 178 percent more likely to promote their organizations to others. 4
Loyalty at large companies fluctuates, too.
Even large organizations that are making an effort to improve loyalty can see employee loyalty levels fluctuate greatly. A company that does extremely well one year may not do as well the next. For example, an eNPS survey conducted in March 2020 (early in the 2020 pandemic, which no doubt influenced the employees’ responses) of Facebook, Amazon, Apple, Netflix, and Google indicated how differently these large companies can be perceived by their own workers.5 When employees were asked if they recommended their companies as a great place to work, their responses produced the following eNPS scores:
• Netflix: 52
• Google: 18
• Facebook: 12
• Apple: 8
• Amazon: -39
The survey also found a link between secure employment and high eNPS: “57 percent of surveyed professionals feared being laid off. However, only 36.6 percent of Facebook professionals shared that fear.” This “increased feeling of job security” was reflected in Facebook’s positive eNPS.
Use additional strategies 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.
Because the benefits that come with a job also influence employee experience, ensuring that healthcare coverage and other company benefits are attractive can also go a long way toward making employees happy. Organizations should also seek to foster work environments in which all employees have access to opportunities and know that they are valued. Any investment in employee experiences that lead to more satisfied employees—and to more promoters in the organization—is worth the expense.
Use eNPS to survey the workforce regularly.
An eNPS survey can be a valuable tool, but only if it’s used often. Because employee loyalty changes constantly, regular surveys can give 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. 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.
1 QuestionPro. Undated. “700,000 Culture Benchmarks: What’s Driving eNPS in Workplaces Today.” QuestionPro website, www.questionpro.com/blog/culture-benchmarks-for-enps/.
2 O.C. Tanner. 2021. “2021 Global Culture Report.” O.C. Tanner website, www.octanner.com/global-culture-report/2021/recognition.html.
4 O.C. Tanner.
5 Yoonmi Park. 2020. “Which FAANG Is Best to Work For? We Figured It Out.” Blind, November 17, www.teamblind.com/blog/index.php/2020/11/17/which-faang-is-best-to-work-for-we-figured-it-out/.