How to Measure Employee Engagement: The Future of Retention and Other Key Metrics to Track
HR leaders have a variety of solutions available for how to measure employee engagement. Options include annual "climate" surveys, regular pulse surveys, and employee groups developed to give feedback on key topics.
HR leaders need a plan for how to measure employee engagement in today's evolving workplace. Internal benchnarking on employee engagement can give critical insights into employee performance, productivity, and retention; yet, measuring it is still part art and part science.
HR leaders have been tasked with justifying investments in people programs and connecting engagement initiatives to tangible performance outcomes. It's time to reinvent the engagement equation. Adopting a new mindset that uses innovative formats and emerging technology to provide actionable insights into employee engagement can take HR to the next level.
The evolution of the climate and engagement survey
Effective HR strategies blend qualitative insights with advanced analytics to gain a deeper, more actionable understanding of employee sentiment. ADP research finds that 1 in 5 employees are fully engaged. How can organizations improve this?
As Christian Gomez, ADP vice president strategy - global enterprise solutions, explains, "We're seeing a clear distinction between the traditional climate survey, which is organizational, infrequent, and qualitative, and the more modern, team-based pulse survey that focuses on the employee's experience and how it impacts future performance."
Understanding how employees feel about their employer, team, and job is a cornerstone of HR strategy. Tools like engagement surveys, focus groups, and stay interviews still matter, but the cadence and focus of these tools are shifting.
Annual employee surveys, or "climate" surveys, tend to focus on broad issues, like benefits, working conditions, and general satisfaction. Historically, these have been conducted yearly and may be the only major feedback loop with employees. The best practices in this area are changing.
"Climate surveys should be every two years," says Gomez. "You don't need to know that data more often because a lot of those things, like cafeteria food or benefit satisfaction, likely won't change as frequently."
The rise of the pulse survey
More frequent, actionable, and personalized communication loops are taking hold. Pulse surveys are growing in popularity as a more focused tool to address the real-time employee experience. They're useful in part because they focus on the team level, rather than trying to generalize the employee experience across large organizations, where a sales representative and a backend developer may have very different needs and feedback.
"Pulse surveys should be team-based, short — never more than 10 questions — and focused on predictive validity (meaning, does the employee's experience predict future behavior or tangible business outcomes). They should be deployed alongside coaching or training so team leaders can act on the data in real time," Gomez advises.
He also highlights that HR should take strategic action following these surveys in order to build trust around surveys and communications. "You have to earn the right to solicit their input, and you do that by showing them that it is used and valued," Gomez says.
By showing employees how their feedback has specific impact, it's possible to increase engagement and help reduce survey fatigue.
Structuring employee conversations for impact
In addition to surveys, advisory groups and qualitative listening can offer high-value insights.
Gomez recommends HR teams establish advisory boards of newly promoted managers or functional leaders. "Stay interviews and advisory boards, especially when they involve newly promoted managers or frontline leaders, are essential for surfacing insights HR and IT can't see on their own. The innovation is coming from the field," he notes.
Unlike surveys, actual conversations offer the space to dive deeper into key issues and understand the nuance behind important feedback.
Using technology to drive greater engagement
AI-powered tools and analytics are changing how to measure employee engagement. As tools continue to evolve, HR teams can focus their strategies on gathering data that helps technology deliver maximum results.
"Best-practice pulse surveys prioritize criterion-related validity. In other words, predictability. We're not just asking how people feel — we're using questions that are tightly linked to predicting future behavior," Gomez explains.
This approach offers new possibilities for more directly connecting and tracking HR insights to financial outcomes. "Organizations that do this right can now benchmark engagement not just qualitatively but financially, such as tracking how a new training impacts engagement over time and mapping that to key business metrics," says Gomez.
He sees a future where many of these tools operate in the background: "We're entering a moment where the survey might eventually go away, and AI systems will passively measure the triggers that drive performance outcomes, whether that's based on onboarding effectiveness, leadership transitions, or seasonality shifts."
Tracking engagement and measuring impact
Not every organization is ready, or interested, in AI alone being used to measure engagement. Teams are still building trust in their data, predictive models, or modernizing technology systems. But organizations that invest in strong survey design and clearer insight loops today can build a data foundation that's ready for emerging technologies.
A shift from compliance-motivated surveys to insight-driven action is already reshaping the role of HR. "When you're intentional and very specific about what you want to know, why you're asking, and who you're asking, it creates a virtuous cycle. Employees respond more thoughtfully. Data gets more valid. And leaders are able to act," says Gomez.
Engagement tracking at career inflection points, such as new hires or recent promotions, is especially powerful, says Gomez. "If you're going to do very focused pulse surveying, new hires and recent promotions would be areas to focus on. Newly promoted managers immediately become more marketable, and many organizations lack the mentorship or training to support them. Targeted surveys in that first year can help reduce turnover and improve leadership effectiveness."
Indeed, an ADP Research quarterly Today at Work report found from job history analysis that 29% of people who received their first promotion left the following month. Their model estimate suggests that if a promotion hadn't been in the mix, only 18% might have left.
The future of employee engagement
Moving forward, Gomez believes engagement metrics will help organizations measure the ROI of HR investments, saying, "In the next two years, I believe we'll use engagement data as the benchmark for human capital effectiveness. We'll see every dollar that's invested in people and how it correlates with productivity, retention, and value creation."
Real power will come from integration across the full employee lifecycle. "Imagine down the road: Your engagement data feeds AI models that connect onboarding surveys to exit data, identify early warning signs, and help HR step in with better coaching, training, or support before a performance issue or resignation occurs," Gomez notes.
When sophisticated tools that measure engagement can turn insights into solutions that support employees, HR can be more proactive, more strategic, and more deeply connected to business outcomes. It's no longer simply about measuring engagement. HR leaders need strategies that track the right metrics, ask the right questions, and turn insights into meaningful, measurable change. That's the future of employee engagement.
Are you looking to improve engagement across your workforce? Discover how ADP can help.
