Employee Net Promoter Score (eNPS)

What Is Employee Net Promoter Score (eNPS)?

Employee Net Promoter Score, or eNPS for short, is a measure used to gauge employee loyalty within a company. It calculates and reveals the likelihood that your employees will suggest your organisation as a good place to work to their friends, acquaintances, or on online review platforms (basically, anywhere). Put simply, eNPS shows how satisfied employees are with their work environment and the job itself, as well as the extent of their commitment to the business, which is undoubtedly a crucial factor for its reputation and economic success.

The Net Promoter Score (NPS) was first introduced by American business strategist Fred Reichheld in 2003 through his article "The One Number You Need to Grow," published in the Harvard Business Review. It was originally established to examine customer loyalty to brands, and it quickly gained popularity because of its simplicity and effectiveness in various business sectors. Over time, it became apparent that a similar approach could be used to judge employee loyalty. This is why eNPS was created, which was an alternative to the original NPS, designed specifically for internally assessing employee feelings. Therefore, it is also referred to as internal NPS or employee NPS.

The main difference between NPS and eNPS is the target audience and, consequently, the way the main questions are devised. Therefore, NPS targets customers and asks about their willingness to recommend a product or service. Simultaneously, eNPS centres on employees' satisfaction by asking how happy they are with their workplace and how likely they are to recommend their company to others. Although they differ, both metrics aim to achieve the same goal: identifying supporters and detractors to enhance relationships with the target audience, customers and employees, respectively.

Why Is eNPS Significant for Organisations?

The eNPS is more than just a number; it serves as a key indicator of your organisation's overall health and well-being. This marker is closely linked to employee engagement, motivation, and willingness to contribute to the overall success. A high eNPS reflects a healthy work environment where employees feel appreciated, respected, and motivated, and they recognise the impact of their contributions to the bigger picture. Naturally, all this boosts overall productivity and enhances the brand's reputation both online and in society.

The link between eNPS and other business metrics is also clear: a high eNPS is associated with a strong corporate culture, hence lower employee turnover and a high status in the labour market. Therefore, eNPS can be regarded as a component of a staff retention strategy. Loyal employees are less likely to leave the company, which helps lower the costs of recruiting and training new professionals. Employees with a high eNPS tend to be more innovative, collaborative, and committed to delivering excellent customer service. Likewise, a high eNPS is clearly evident in the job market, making it easier for recruiters to attract talented candidates.

Many top companies use eNPS as a core KPI, not just for regular employees but also for HR and management teams. For instance, the online retailer Zappos, recognised for its strong corporate culture, regularly assesses the eNPS of all departments. OpenAI, renowned for its AI developments and products, and Adobe, also a well-known software company, do the same.

Benefits of Measuring eNPS

Measuring eNPS provides businesses with several key benefits that enhance their internal environment and boost operational efficiency. For instance, eNPS is…

• What provides real-time feedback about workplace satisfaction. It enables you to quickly gather information about employee opinions, preventing you from missing conflicts, emerging issues, or even internal crises.

• A simplified comparative analysis across teams or divisions, which allows you to assess employee loyalty levels. This helps identify which departments or branches have the strongest or weakest corporate cultures, enabling timely interventions and transformations.

• A brief indicator of shifts within the internal culture. Regularly measuring eNPS enables you to monitor mood fluctuations over time, especially during periods of change such as management shifts, technology upgrades, or relocations, which might lead to conflicts. If eNPS is rising, it signals better working conditions and higher employee satisfaction. If employee NPS declines, this indicates that further measures are necessary to manage the personnel effectively.

• Data, valuable for streamlining operations and enhancing the company's performance image. Therefore, when collecting eNPS, you should also gather comments and suggestions to help improve the team's efficiency. For instance, a company might find that installing a water cooler and air conditioner on the premises can increase eNPS by at least one point, among other improvements.

Overall, eNPS is a valuable tool for enhancing HR procedures and increasing business efficiency. It's a straightforward measurement method, and its transparency of results and ability to evaluate make it applicable to any market area and team.

How to Calculate eNPS

A simple survey is employed to determine eNPS, featuring a key question: "How likely are you to recommend our company as a place to work to your friends?" Employees are prompted to rate their willingness on a scale from 0 to 10, with 0 indicating "Not at all likely" and 10 signifying "Extremely likely." According to these assessments, employees are categorised into three groups:

• Promoters (9-10 points): These employees are loyal and engaged, willing to recommend your company to others. They act as your "advocates," safeguarding your brand, especially during a crisis, and contribute to building a positive employer reputation.

• Passive participants (7-8 points): These employees are satisfied but not sufficiently motivated to recommend your company actively. They are neutral supporters or critics, and their opinions can easily change due to external factors (hopefully in a positive direction).

• Detractors (0-6 points): These employees are dissatisfied and unlikely to recommend your company, possibly sharing negative feedback. They represent a challenge for the business because understanding their concerns and improving their work environment is crucial. Additionally, they are the group most likely to leave soon.

The eNPS calculation formula is simple:

eNPS = (% of Promoters - % of Detractors) x 100

Therefore, to calculate eNPS, you will need to:

1. Collect survey data to determine the total number of employees in each category: promoters, passive participants, and detractors.
2. Determine the percentage of each group based on the total number of employees who participated in the survey.
3. Estimate the difference by subtracting the percentage of detractors from that of promoters.
4. Multiply the result by 100.

Consider an example where 100 employees participate in an eNPS survey. Among them, 50 rate the company at 9-10 points (promoters), 30 at 7-8 points (passive participants), and 20 at 0-6 points (detractors).

• % of Promoters = (50 / 100) x 100 = 50%

• % of Detractors = (20 / 100) x 100 = 20%

• eNPS = (50% - 20%) x 100 = 30

The eNPS can range from -100 to +100. A negative value indicates the company has more detractors than promoters, serving as a clear warning sign. A positive number signifies that most employees are loyal. However, what is considered a good eNPS? There is no one-size-fits-all answer to this question, because "good" eNPS varies based on industry, company size, and region. Typically, an eNPS above zero is considered acceptable, above 20 is good, and above 50 is excellent. However, it's crucial to view eNPS as a dynamic metric, comparing current results with past data and observing trends that may cause fluctuations.

Effective Strategies for Conducting eNPS Surveys

There are particular guidelines to follow when conducting eNPS surveys to gain the most accurate and significant results. Here are some tips:

• Maintain regular and timely surveys. It is advisable to carry out eNPS surveys regularly, but not too frequently, since these surveys could be perceived as interfering with work activities and diverting from tasks. Therefore, avoid conducting an eNPS survey just before deadlines or major projects. The ideal frequency is typically one survey each quarter, which is usually sufficient to monitor changes.

• Maintain confidentiality and confidence. Ensuring employees' complete anonymity when they take the survey is crucial. This enables them to feel secure and answer questions truthfully, without fearing negative repercussions like conflicts with management that disagree. Make sure to inform employees that the survey results will only be used in an aggregate form without any names. If needed, set up an anonymous questionnaire drop-off box, which can even be done offline by placing a box in the hallway.

• Remember to close the feedback loop! Conducting an eNPS survey alone isn't sufficient; it's equally vital to implement concrete actions derived from the results. Analyse the data you've gathered, pinpoint problem areas, and create an action plan to resolve and enhance them. Inform employees about the steps you've implemented and demonstrate that their opinions genuinely matter to the company. Surveys need to result in tangible changes and outcomes; otherwise, participation and team engagement may decline over time.

Challenges and Drawbacks of eNPS

Although eNPS is simple and effective, it has some limitations.

• ENPS does not reveal the full picture. It is only one measure of employee loyalty. It does not offer a complete overview of the reasons for satisfaction or dissatisfaction, nor does it consider other important factors such as motivation, engagement, and employee well-being. Therefore, it is essential to integrate eNPS with additional metrics and more comprehensive surveys.

• Risks associated with misinterpreting results. ENPS may be interpreted subjectively, particularly when the context and unique features of a particular organisation are overlooked. Overemphasis on eNPS can lead to hasty decisions and neglect of other vital aspects.

• Challenges in understanding the outcomes. A broad spectrum of scores, which are scattered, can complicate the identification of detractors and lead to disagreements within the group. Therefore, it is advisable to base judgments not on a single eNPS survey, but on several over time before labelling someone as a detractor or considering their stance temporary.

As you can see, there are advantages, and they outweigh the many disadvantages and difficulties.

Tools and Software Used to Measure eNPS

There are numerous tools for feedback and even specialised software for collecting feedback that simplify measuring eNPS and examining the results. Therefore, we suggest focusing on:

• Culture Amp. This platform provides a comprehensive employee experience management solution, featuring tools for conducting eNPS surveys, analysing data, and creating action plans. Culture Amp provides a wide array of choices for personalising surveys, automating tasks, and even visualising the results.

• Officevibe. This platform aims to boost employee engagement by providing tools for conducting regular eNPS surveys, gathering feedback, and exchanging messages. Officevibe also enables the creation of anonymous communication channels, allowing employees to share their opinions freely, like the hallway suggestion box, but accessible online for greater convenience.

• Peakon. It is an employee data analytics platform powered by artificial intelligence that detects trends and patterns. It allows you to conduct eNPS surveys, evaluate employee comments, and offer recommendations to improve the work environment.

Many of these platforms also integrate with HRIS (Human Resource Information System) or collaboration tools, enabling automated data collection and easier information sharing.

Frequently Asked Questions (FAQ)

Here, we have gathered answers to the most commonly asked questions about the eNPS indicator and its utilisation.

• What is eNPS?

This metric evaluates employee loyalty to a company by measuring how likely they are to recommend the organisation to others. It is scored on a scale from 0 to 10, with zero indicating "definitely not" and 10 indicating "definitely would recommend."

• What is a good eNPS?

As noted earlier, "good" eNPS levels differ depending on industry, company size, and region. Generally, an eNPS above 0 is acceptable, above 20 is considered good, and above 50 is regarded as excellent. It's imperative to monitor how your metrics evolve and to compare them with your competitors in the same field, provided they share such data publicly.

• How frequently should you carry out an eNPS survey?

It is recommended that you conduct eNPS surveys either quarterly or, at minimum, semi-annually. Conducting surveys more often might annoy employees, while less frequent surveys could prevent you from spotting issues earlier.

• Should an eNPS be kept anonymous?

Yes, to guarantee fair and trustworthy results, all eNPS surveys must remain anonymous, with a guarantee of keeping confidentiality.

• Is it possible to improve eNPS quickly?

Enhancing eNPS is a long-term endeavour that demands ongoing efforts to improve the workplace environment, resulting in higher employee engagement across the board and a more robust corporate culture. You should not expect immediate results, but with the right approach, you can make substantial progress over several months or years. Once you identify a problem area, whether it's dissatisfaction with the office location or issues with management, it is vital to take appropriate steps gradually and ensure that employees notice and approve of these measures. There are numerous eNPS practices, which are developed collaboratively by HR, management, and the team.

Conclusion

The significance of employee net promoter score is difficult to overestimate. It is a valuable tool for evaluating and enhancing employee loyalty. It offers a straightforward yet effective measurement that enables organisations to assess employee satisfaction levels, identify issues, and promptly prevent potential consequences. Employing eNPS helps create a positive working environment, increase employee engagement, and consequently improve all other business metrics.

The fundamental point to understand here is that using eNPS is not a one-off activity. It is an ongoing tool and essentially a continuous process that necessitates regular analysis, HR analytics, and consistency. By integrating eNPS with additional metrics like engagement surveys and employee feedback, organisations can achieve a more holistic understanding of the situation and develop more effective strategies to enhance the work environment. Constant tracking and a commitment to improvements set a successful company apart from an ordinary one!