What is eNPS?
Primarily driven by the pandemic, there’s been a major shift in what employees most value about working for a company. Offering a competitive salary and good benefits may no longer cut it. With historic numbers of employees switching jobs and careers or simply quitting or retiring all together, employers must be more diligent about understanding why employees are staying and leaving. Often this process starts with determining the satisfaction rate among current employees. Employee Net Promoter Score, or eNPS, is a way of measuring and tracking how employees feel about their company and, when used properly, can be a valuable retention tool.
How to calculate eNPS?
An eNPS survey asks one simple question: On a scale of 1-10, how likely are you to recommend our company to friends and family? Based on their answers, employees are sorted into three categories:
- Promoters – Employees scoring 9-10
- Passives – Employees scoring 7-8
- Detractors – Employees scoring 0-6
Promoters are the most loyal employees who are highly engaged and satisfied with their role in the company. They are most likely to recommend their company to others and aren’t likely to leave. Detractors are found at the other end of the satisfaction spectrum. These employees are unhappy, most likely to speak poorly to others about the company and are at a great risk of leaving. Somewhere in the middle are the Passives. These employees are more neutral about the company and are neither engaged nor disengaged. Passives may hang around the company but are likely to leave if a better offer comes along.
eNPS is very easy to calculate by subtracting the percentage of Detractors from Promoters. Passives are not counted in the calculation. For example, a company with 100 employees receives the following scores: 45 (45%) scored 9 or 10 (Promoters), 30 (30%) scored a 7 or 8 (Passives) and 25 (25%) scored 0 – 6 (Detractors). This company’s eNPS is 20% (45% – 25% = 20%).
What is a good eNPS?
A “good” eNPS can vary significantly among industries, but most agree around 30% is a good eNPS with around 50% being an excellent score. According to Comparably, a HR tech company whose mission is to “make workplaces transparent and rewarding for both employees and employers,” a good eNPS can be a major predictor of what is considered a “best place to work.” According to Comparably data compiled between March 2021 and March 2022, some household company names are also best places to work with very good, and, in some cases excellent, eNPSs. Their data revealed Google had an eNPS of 37%, Chewy 48% and GoodRx a whopping 69%.
What are some benefits of using eNPS?
It’s easy. Rather than spending time and money on a long employee survey that employees must wade through, the eNPS is just one simple question making it easy to distribute, answer and track. It can provide real insight into a company’s culture and level of employee engagement quickly.
It’s accurate. Because it is only one question, there is little room for error or confusion.
It can be used for benchmarking. Once an employer has a baseline eNPS, it is easy to compare the quantitative data going forward. Employers can measure their performance and improvement (or lack thereof) in subsequent years.
It increases employee engagement. By keeping a finger on the pulse of the company, the organization is showing it cares about its employees’ experiences establishing trust and goodwill that goes a long way towards keeping employees engaged.
It decreases turnover. The eNPS is the first step towards revealing potential issues that drive employees away. A low eNPS may signify morale issues, distrust of management, poor communication, lack of training or below market salaries that lead to turnover.
Limitations of eNPS
For all it’s advantages, it’s important to understand an eNPS is just one metric and a start towards identifying a company’s strengths and weaknesses. The eNPS is only meaningful if compared to previous years’ scores or to those of others in the same industry. Also, because the eNPS is just a number, it may show there is a problem but doesn’t identify the root of the problem, ways to improve the score or barriers towards improvement. For this reason, an eNPS must be followed up with more research to identify specific issues.
eNPS Best Practices
Follow up. As already stated, an eNPS is just a starting point toward gauging employees’ satisfaction and reasons it is high or low. It’s imperative to follow up with survey participants to determine what is going well and what isn’t. Although the Passives’ scores aren’t a part of the final score, their feedback is very important. They could be teetering on becoming Detractors and can identify ways they could become Promoters.
Analyze and track the data. By comparing subsequent years’ eNPSs, trends emerge revealing the success or failure of HR initiatives. If a low eNPS is followed by one even a few points higher, that’s a step in the right direction. Alternatively, adjustments may be in order if an eNPS falls a few points in a subsequent year.
Take action. Conducting the survey is worthless and potentially detrimental to employee morale if the company fails to act on the feedback. Before requesting employees’ participation in the survey, a company should ensure resources are available to address any potential issues revealed by the survey.
Be transparent. Employers should share their eNPS with employees no matter how low it may be. It’s important to include as part of this communication the steps the company is taking to address issues revealed. Regular and timely follow up employee communications shows the employer is taking the issues seriously and is committed to resolution or improvement. Transparency alone will likely increase a company’s eNPS.
Get Smart HR
The eNPS is an easy, reliable, inexpensive tool for gauging employee satisfaction and the first step towards ensuring you attract and retain the best talent. As employee work and life priorities shift, as has been the case during the pandemic, a lot rides on the employee experience. Don’t guess or wonder if your employees are satisfied, find out. Smart HR can handle the entire process including conducting the survey, computing the eNPS, following up with Promoters, Detractors and Passives, identifying corporate strengths and weaknesses and developing a plan to address issues causing a low eNPS. Smart HR can help, call today.