Measuring The Employee Net Promoter Score
Understanding how loyal your employees are and the reasons why they are loyal or not can have major impacts on your business. Many companies, however, struggle to move the needle.
Would it matter to you if you were in possession of a silver bullet that transformed your employees into proud ambassadors of your organisation? That makes your employees strongly advocate their employment in your firm? That makes you confident of the fact that your employees are indeed your true promoters to the inside and outside world alike?
I am safely assuming that your response would be a dominant 'yes' - Yes, it would matter a great deal to really understand the ingredient that goes behind the making of that silver bullet. It matters significantly for your organisation's brand, customer experience, and employee loyalty to drive the business metric with sincere passion, commitment, and enthusiasm. Understanding exactly how loyal your employees are, and the reasons why they are loyal or not can have major impacts on your business. Many companies, however, struggle to move the needle when it comes to knowing and understanding what works and what does not for their employees.
Research by Gallup states:
70% variance in the virtue of employees being your ambassadors or not is accounted for by the direct reporting managers and leadership team, 51% employees worldwide are looking to quit their jobs and 13% feel completely disengaged and demotivated 64% employees are unsatisfied with their work culture.
This unfortunate output comes from the fact that companies and their Leadership team mostly struggle with:
- How to define employee engagement & motivation?
- What to identify as a component of employee ambassadors?
- What to measure, how, and in what frequency?
- Improvement execution strategy that is not robust and full proof (where eNPS awareness exists)
As an answer, most progressive thinking companies are relying today on Employee Net Promoter Score as a strategic tool that feeds them with the critical ingredient required to make their own silver bullet, and transforming the perspective of creating employee ambassadors as their strongest company asset.
What is Employee Net Promoter Score (eNPS)?
Employee Net Promoter Score - in sync with the concept of Net Promoter Score coined by Bain & Company and Fred Reichheld - is a concept that has two key questions that seeks responses from all employees in an anonymous survey.
(1) How likely are you to promote or recommend your employer as a great place to work?
(2) What is/are the reason(s) for your score?
How do we Measure eNPS?
eNPS, on the bases of the employee score provided for the first question measured on a scale of 0 to 10, is classified as:
- Promoters: 9 & 10 [The core ambassadors]
- Passives: 7 & 8 [Neutral employees]
- Detractors: 6 or less [Negative promoters]
Your eNPS is then arrived at by the formula: eNPS = % Promoters - % Detractors
Research shows that companies with higher eNPS rating clearly have a direct equation with few core business metrics, making it an absolute must-have strategy.
- Sales growth
- Customer satisfaction
- Employee turnover
- Shareholder value
Through a successful framework of eNPS, one can derive at insights to seek many advantages. I would, however, put the spotlight on the top 3 key components in my book, and elaborate on each factor. It uplifts your employer branding and customer experience, Cultivates a spirit of intrapreneurship culture and Generates the power of retention and referrals.
Uplifts your employer branding and customer experience
Undoubtedly, employees are the face of your organisation. The best of brands credit what they are today - and the employer branding proclamation they have in the market - to their culture and employees. The best way to propagate your company's progress and work culture is always through your employees. eNPS and the learning you draw from it is that it is a powerful tool that can have a complete brand makeover impact. Your promoter employees and your brand ambassadors can potentially help you crack one of the key industry challenges - attracting top talent. eNPS, and how effectively you build it, has the potential to uplift your employer branding significantly.
Cultivates a spirit of intrapreneurship culture
Act like an entrepreneur and think like a CEO - that could be the mantra that can come right out of your eNPS book.
"Employees, and more specifically, today's younger workforce, take a lot of pride in ownership. Their mindset is inclined to work more like partners than employees."
A Marketing Head, for example, must think and act as the CEO of his/her department, and his/ her team ought to think like intrapreneurs when they pick certain projects. Imagine, if such were your organisation's DNA, you would be able to build a team where employees are constantly going above and beyond their normal KRA/KPI. Your promoter employees attached to the organisation will always proactively look for ways to contribute to the company's growth and scale.
Generates the power of retention and referrals
Retention: As per research conducted by SHRM, the average cost per hire (which includes advertisements, job posting, interviewing, etc.) accounts for $ 4,129. Retention becomes a very meaningful metric when you consider -
(i) The cost of training new employees
(ii) The impact of learning curve (generally 90 days for a new employee)
(iii) Negative influence on execution speed, and
(iv) The cost of a mistake made by the new employee
eNPS will be the fodder that will efficiently fuel your organisation's ability towards positive retention. When you manage to build a work environment conducive to having more promoters, you witness an emphatic increase in the loyalty factor.
Referrals: A universally proven approach to execute a quality hire in the most cost effective and fast-tracked manner. Not only do you get more like-minded and skilled talent, but employees hired as referrals naturally join you with the intention of a long-term partnership. Promoter employees proactively refer their friends as they beam with the confidence of your organisation being a great place to work - it is so worth the salt!
The good score and the survey frequency
eNPS can generate a score in the range of -100 to +100. Hence, in my opinion, any score on or above +10 can be considered as good. If you hit a high of +40 or above, it is an absolute game-changer. Since the survey consists of 2 key questions, it can be done in a shorter cycle of a quarter or half-yearly duration. Your organisation's capacity to act on the inputs received is most important. It can all work against you if you fail to Act on your findings - consider that as a primary deciding factor.
To bring it all together
The power of eNPS is only evident when you initiate it and taste the blood in terms of the immense value-add it can bring to your organisation. One must, however, keep a perspective that the eNPS must be considered as a marathon, and not a 100-meter dash. It takes due diligence and commitment to implement the survey findings and showcase the changes to your employees (transparency is very critical). It does take time, as
a) Everyone must be involved and
b) You are literally transforming the organisational culture and DNA.
Another important aspect is the natural need to benchmark and compare yourself with other companies and competitors. It may not necessarily be the best approach - the most useful benchmark a company must use is its own progress journey over time.
At LogiNext, eNPS is passionately imbibed by our CEO Dhruvil Sanghvi, and through him, the torch is passed to the Core Leadership team and all employees. With an average eNPS score of 54, we as an organisation have been successful in building an eNPS architecture that works magnificently well - as determined by the successful impact we have had on all the 3 key pillars of success - the business, the customer, and the employees. Thus, it is a win-win situation on all frontiers!
It is not the only tool to propel the desired results, but certainly one of the most important.
"In my opinion, organisations must prioritise eNPS as one of its key goals with an intent to ensure that they have as many promoters in the company as possible."
Take a step to welcome Employee Net Promoter Score, identify the ingredient to your silver bullet, build more promoters, and let the magic begin!
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