What Is eNPS? How to Measure Employee Engagement

What Is eNPS? How to Measure Employee Engagement

eNPS is an indicator that helps businesses measure employees' willingness to recommend their workplace, providing valuable insights into employee satisfaction and internal engagement. So, what is eNPS, how is it calculated, and how can businesses effectively apply this metric to their HR strategies?

Join HR2B as we explore the details of eNPS and how businesses can use it to enhance employee experience and build a sustainable working environment.

1. What Is eNPS and How Is It Calculated?

eNPS (Employee Net Promoter Score) is a metric that measures how willing employees are to recommend their company as a place to work. It is determined through a survey question:

"On a scale of 0 to 10, how likely are you to recommend this company as a place to work to your friends or family?"

eNPS helps businesses assess employees' willingness to recommend their workplace.

Based on their responses, employees are classified into three groups:

Group	Score	Meaning
Promoters	9–10	Highly engaged employees who are willing to recommend the company to others.
Passives	7–8	Relatively satisfied employees who are not yet fully engaged or motivated to actively recommend the company.
Detractors	0–6	Employees with less positive workplace experiences who may share negative feedback about the company.

eNPS Calculation Formula:

eNPS = Percentage of Promoters (%) − Percentage of Detractors (%)
The percentage for each group is calculated based on the total number of valid survey responses. Passives are not directly included in the formula.
The resulting eNPS score ranges from -100 to +100.

Example of eNPS Calculation:
Suppose a company receives 100 survey responses, consisting of:

• 60 Promoters
• 45 Detractors
• 5 Passives

The eNPS score is calculated as follows:
eNPS = 60% − 45% = +15

In terms of interpretation, an eNPS above 0 is generally considered a positive sign. A score between 10 and 30 may be considered good, while a score above 30 is often regarded as very good under some commonly used benchmarks.

However, these thresholds are not universal standards applicable to every business. To evaluate results accurately, companies should also consider industry characteristics, organizational culture, response rates, and changes in eNPS across different survey periods.

2. Why Is eNPS Not Enough to Measure Employee Engagement?

eNPS offers several advantages: it is simple, easy to implement, and convenient to track. However, it does not provide a comprehensive picture of employee engagement.

This metric primarily measures employees' willingness to recommend the company as a place to work rather than directly assessing their commitment, motivation, or effort at work.

For example, an employee may have a positive perception of the working environment but still perform only the minimum required tasks without proactively contributing to the organization.

Therefore, eNPS should be combined with other HR metrics to obtain a more accurate assessment of employee engagement.

eNPS should be combined with other HR metrics to provide a comprehensive assessment of employee engagement.

Another limitation is that the eNPS formula does not directly account for Passives, even though this group may require particular attention.
These employees do not have sufficiently negative experiences to become Detractors, but they are also not satisfied enough to actively recommend the company.
Without understanding the reasons behind neutral feedback, businesses may miss opportunities to improve the employee experience and identify potential turnover risks early.
This is particularly important because employee turnover can increase recruitment and training costs while disrupting business operations.

Finally, eNPS indicates employees' willingness to recommend the company at a particular point in time but does not explain the reasons behind the results.
A low score may be related to management styles, compensation and benefits policies, career development opportunities, or workplace experiences. However, businesses need additional surveys to identify the specific issues.
Furthermore, cultural differences and varying feedback habits across countries may influence how employees rate their workplace.
Therefore, when comparing eNPS across different employee groups or markets, businesses should interpret the results within the appropriate context. They should also combine open-ended questions, in-depth surveys, and other HR data to support more effective decision-making.

3. How to Measure Employee Engagement Comprehensively

If eNPS can be compared to a thermometer that reflects employees' perceptions, comprehensive employee engagement measurement is more like a full health check for the workforce.

Rather than relying on a single metric, businesses should combine multiple methods to understand how employees feel, the reasons behind their feedback, and how those perceptions translate into actual workplace behaviors.

Below are four steps to building an effective employee engagement measurement system.

• Step 1: Add Open-Ended Questions to Identify the Underlying Reasons

In addition to the eNPS rating question, businesses should include one or two open-ended questions, such as:What made you give this score?
What would need to change for you to feel more committed to staying with the company?

These responses help clarify the reasons behind employees' scores, ranging from workload and relationships with managers to career development opportunities.

When analyzing the feedback, businesses should categorize responses by theme to identify common issues and prioritize areas for improvement.

• Step 2: Conduct Regular Surveys and Track Trends

A single eNPS result at one point in time is insufficient to reflect changes in employee engagement.

Businesses should conduct regular surveys, such as quarterly surveys, to establish a baseline and monitor fluctuations over time.

After implementing improvement initiatives, such as management training or workload adjustments, conducting follow-up surveys can help evaluate changes in employees' perceptions.

More important than an individual score is the overall trend and the level of improvement following each intervention.

Regular surveys help businesses monitor changes in employee engagement over time.

• Step 3: Combine eNPS with Other HR Metrics

To gain a comprehensive understanding, businesses should combine employee perception data with engagement drivers and actual employee behaviors.

A measurement system can include three groups of indicators:

1. Perception Metrics

eNPS reflects employees' willingness to recommend the company as a place to work.

2. Engagement Driver Metrics

In-depth surveys help assess factors such as clear job expectations, recognition, and career development opportunities.

3. Behavioral Metrics

Voluntary turnover rates, absenteeism rates, and internal mobility rates help businesses better understand what is happening within their workforce.

These three data groups complement one another, helping businesses avoid making conclusions based solely on employee perceptions.

For example, consistently high eNPS scores alongside an increasing voluntary turnover rate may indicate the need to investigate workplace experiences, career development opportunities, or talent retention policies more closely.

• Step 4: Analyze Results by Employee Groups and Stages of the Employee Journey

To turn survey results into actionable initiatives, businesses should analyze eNPS by department, management level, and different stages of the employee journey.

This approach helps identify areas with lower engagement levels, such as the onboarding stage, interdepartmental collaboration, or relationships with direct managers.

Based on these findings, businesses can develop appropriate solutions, such as improving onboarding programs, strengthening management training, or adjusting HR policies.

Analyzing eNPS across different employee groups helps identify issues and develop appropriate HR solutions.

However, when analyzing results across smaller groups, businesses must ensure confidentiality and avoid revealing respondents' identities through survey results.

They should also consider sample sizes and contextual factors before attributing the causes of low scores to a particular department or manager.

Conclusion:
To gain a comprehensive understanding of employee engagement, businesses should combine eNPS with in-depth surveys and actual workforce data.
More importantly, every employee response should be translated into concrete actions to improve workplace experiences, enhance satisfaction, and retain talent.
With its HR consulting expertise, HR2B partners with businesses to develop appropriate HR strategies, helping build an engaged workforce and support sustainable organizational growth.Based on their responses, employees are classified into three groups:

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Shadow Payroll in Vietnam: When Do Businesses Need to Set It Up?

Shadow payroll is a mechanism that enables businesses in Vietnam to track and manage tax and social insurance obligations for foreign employees who continue to receive their salaries from their overseas parent company or another foreign entity. So, when do businesses need to establish shadow payroll? What factors should be reviewed, and how does this process affect employment costs?

Join HR2B as we explore the key considerations for businesses managing payroll for foreign employees working in Vietnam.

1. What Is Shadow Payroll? When Should Businesses Apply It?

Shadow payroll is a parallel payroll management mechanism used when foreign experts work in Vietnam but continue to receive their salaries through their overseas parent company's payroll system. Instead of making an additional salary payment in Vietnam, the local entity uses income data from the overseas payroll system to determine and fulfill any tax and social insurance obligations arising in Vietnam.

One of the key factors in determining the appropriate treatment is the employee's tax residency status. Before establishing the scope of taxable income, businesses need to consider the employee's physical presence in Vietnam, place of residence, and other relevant conditions.

Shadow payroll helps businesses manage the income and statutory obligations of foreign employees working in Vietnam.

Criteria Tax Resident Non-Tax Resident Determination criteria Meets the applicable conditions regarding physical presence or place of residence Does not meet the conditions for tax residency
Scope of taxable income Worldwide income, subject to applicable regulations Taxable income arising in Vietnam Employment income tax calculation Applicable tax rates for tax residents Applicable tax rate for non-tax residents

Therefore, before setting up shadow payroll, businesses must correctly determine each foreign expert's tax residency status and tax obligations, rather than relying solely on where their salary is paid or the country in which their employment contract was signed.

1.1 How Does Shadow Payroll Work?
Under this arrangement, foreign experts continue receiving their salaries from the parent company through the overseas payroll system. Meanwhile, the Vietnamese entity collects information on salaries, bonuses, allowances, and relevant benefits to determine the obligations arising in Vietnam.

• This data is used to Determine income subject to taxation in Vietnam.
• Calculate and fulfill personal income tax (PIT) obligations.
• Review mandatory social insurance obligations if the employee falls within the applicable coverage.
• Reconcile payroll data between Vietnam and the overseas payroll system.
• Support annual tax finalization and resolve discrepancies at the end of the period.

Therefore, shadow payroll does not mean that employees receive two separate salary payments. It is primarily a mechanism for managing and reporting statutory obligations in Vietnam, while the actual salary may continue to be paid from overseas.

1.2 How Does Tax Residency Affect Shadow Payroll?
An employee's tax residency status can significantly affect how a business determines the PIT obligations of foreign experts. Under current regulations, the assessment is not based solely on the number of days an employee is physically present in Vietnam. It must also take into account residence-related conditions and other relevant provisions.

For foreign experts undertaking long-term assignments or frequently traveling between Vietnam and other countries, HR should monitor their travel schedules from the beginning of the assignment. Determining tax residency status early enables businesses to proactively establish payroll arrangements, forecast costs, and minimize additional tax liabilities arising during tax finalization.

Tax residency status determines the scope of income that must be considered when calculating PIT.

2. When Do Tax and Social Insurance Obligations Arise for Foreign Employees?

Personal income tax and mandatory social insurance are subject to different eligibility criteria. Therefore, businesses should not rely on a single timeline to determine all obligations applicable to foreign experts.

Each type of obligation should be reviewed separately and reassessed whenever the employee's working period, employment contract, or assignment arrangement changes.

2.1 PIT Obligations Should Be Determined at the Beginning of the Assignment
For foreign experts, tax residency status is one of the key factors in determining the scope of taxable income and the applicable PIT calculation method.

Businesses should monitor the employee's physical presence in Vietnam, place of residence, and other relevant conditions rather than relying solely on whether the employee receives their salary in Vietnam or overseas.

In particular, when an assignment extends across multiple tax years, HR and Finance teams need to determine how the applicable regulations should be applied in each year.

Salary, bonuses, allowances, and benefits paid by the parent company must also be reviewed to identify the portion of income relevant to Vietnamese tax obligations.

Monitoring tax residency status helps businesses correctly determine PIT obligations.

Early assessment enables businesses to proactively establish shadow payroll arrangements instead of discovering incomplete income records or unresolved tax residency issues only at the time of annual tax finalization.

2.3 Mandatory Social Insurance Is Subject to Separate Eligibility Conditions
For foreign employees, current mandatory social insurance regulations must be assessed based on their employment relationship in Vietnam.

Under the 2024 Law on Social Insurance, foreign employees are subject to mandatory social insurance if they work under a fixed-term employment contract of at least 12 months with an employer in Vietnam, except for certain exempted cases.

One important case to note is foreign employees transferred internally within an enterprise. Under current guidance, this group is excluded from mandatory social insurance participation if they meet the conditions applicable to intra-company transfers.

Businesses should review each employee's working arrangement and legal documentation before including social insurance obligations in the shadow payroll process.

In addition, effective July 1, 2025, the 2024 Law on Social Insurance and Decree No. 158/2025/ND-CP introduced more specific provisions regarding eligible participants and the salary used as the basis for calculating social insurance contributions for foreign employees.

2.4 Data Discrepancies Can Increase Compliance Costs

When tax or social insurance obligations are not correctly determined from the outset, businesses may need to amend records, fulfill outstanding obligations, and repeat relevant declaration and reconciliation procedures.

For employees receiving compensation from multiple countries, retrieving historical data across several payroll periods can also significantly increase the workload for HR and Finance teams.

This is why businesses should establish a review process at the beginning of each assignment, covering:

• Assignment duration.
• Tax residency status.
• Income sources.
• Employment contracts.
• Assignment and transfer arrangements.
• Social insurance obligations.

When these details are consistently updated throughout the assignment, shadow payroll becomes an effective compliance control tool rather than simply a mechanism for resolving issues at year-end.

Accurate payroll data helps minimize discrepancies and additional costs during tax finalization.

3. Managing Shadow Payroll: From Policy Development to Tax Finalization

Shadow payroll involves more than simply entering data into another payroll system.

To operate effectively, businesses must first establish the tax policy applicable to expatriate employees and determine how tax obligations are allocated between the employer and employee. They can then develop the corresponding calculation, declaration, and reconciliation procedures.

This approach enables HR and Finance teams to maintain control over both actual tax obligations and the overall cost of each assignment.

3.1 Tax Equalization vs. Tax Protection: Which Approach Should Businesses Choose?

Two commonly used approaches to managing tax obligations for expatriate employees are Tax Equalization and Tax Protection.

The main difference lies in how businesses handle the gap between the employee's actual tax liability and their hypothetical tax liability.

Criteria	Tax Equalization	Tax Protection
Objective	Maintain the employee's after-tax income at a level broadly comparable to what they would receive under the home-country tax policy	Ensure that the employee does not bear tax costs exceeding their hypothetical tax liability
Actual tax is higher than hypothetical tax	The employer handles the difference in accordance with company policy	The employer typically covers the excess tax above the protected amount
Actual tax is lower than hypothetical tax	The tax savings are handled according to company policy	The employee typically retains the tax savings
Application	Suitable for assignment policies with strict controls over employees' after-tax income	Offers greater flexibility in protecting employees against tax fluctuations

The choice of approach should align with the company's international mobility policy, assignment agreement, and internal group regulations.

This also provides the basis for Payroll teams to determine how taxes should be calculated and how differences should be handled throughout the employee's assignment in Vietnam.

3.2 Hypothetical Tax and Year-End Reconciliation
Under a Tax Equalization or Tax Protection arrangement, businesses may use hypothetical tax, which refers to an estimated tax amount calculated based on the tax liability the employee would have incurred if they had continued working in their home country.

This hypothetical tax is used to determine the employee's after-tax income and allocate tax responsibilities in accordance with company policy.

Meanwhile, the shadow payroll in Vietnam reflects the actual tax obligations arising locally.

Hypothetical tax serves as the basis for reconciling tax obligations under expatriate assignment policies.

The process may be carried out through the following steps:

Overseas Payroll → Hypothetical Tax Calculation → Vietnam Shadow Payroll → Actual Tax Calculation → Reconciliation → Adjustment of Differences

At the end of the assignment or during tax finalization, businesses need to consolidate all income, calculated tax liabilities, and tax payments to determine any outstanding differences.

The final treatment of these differences depends on the applicable Tax Equalization policy, Tax Protection policy, or other arrangements established by the company.

As payroll data may originate from multiple systems and countries, the reconciliation process requires coordination among HR, Payroll, Finance, and the parent company's HR team.

Aligning data from the beginning helps minimize discrepancies during tax finalization and makes it easier to review and monitor the costs associated with each assignment.

4. The Actual Total Cost of an Expatriate Assignment and When to Outsource Payroll

Personal income tax is only one component of the overall cost of assigning foreign experts to work in Vietnam.

In addition to salary, businesses need to account for social insurance contributions, employee benefits, and other expenses associated with their tax policies.

4.1 Calculating the Actual Total Employment Cost
For example, if an expatriate employee receives a gross salary of VND 50 million per month, the employer's actual employment cost will also include the employer's share of social insurance contributions and additional employee benefits.

Common additional costs include: Housing, children's school fees, and home-leave airfare: The way these expenses are paid or reimbursed may affect the employee's taxable income.
Allowances: Each allowance should be reviewed to determine whether it is subject to PIT.
Overseas income: Applicable Double Taxation Agreements (DTAs) and the conditions for claiming foreign tax credits should be considered.

Therefore, businesses should calculate the Total Employment Cost (TEC) rather than relying solely on the employee's gross salary.

4.2 Managing Shadow Payroll In-House or Outsourcing to a Specialized Provider?
For a single expatriate employee on an approximately one-year assignment with a relatively straightforward income structure, businesses may be able to manage shadow payroll internally using their HR, Payroll, or Finance resources.

However, shadow payroll becomes more complex when there are: Multiple expatriate employees or employees of different nationalities.

• Income paid from both Vietnam and overseas.
• Tax periods extending across multiple years.
• Tax Equalization or Tax Protection policies.
• Multiple employee benefits requiring tax assessment.
• Tax finalization, adjustments, or tax refunds when expatriates complete their assignments.

In such cases, a specialized payroll provider can support businesses with data verification, payroll calculations, tax declarations, reconciliation, and tax finalization.

Outsourcing is a suitable option when the volume and complexity of shadow payroll activities exceed the capacity of internal teams.

Businesses may consider outsourcing when shadow payroll involves multiple complex administrative and compliance requirements.

Conclusion

Shadow payroll helps businesses manage the tax, social insurance, and income reporting obligations of foreign experts working in Vietnam, even when their salaries continue to be paid by an overseas parent company.

As the number of expatriate employees, countries involved, and employee benefit arrangements increases, the process also becomes more complex and requires closer control.

With its experience in Payroll Outsourcing, HR2B can support businesses in standardizing payroll processing, tax declarations, tax finalization, and foreign employee data management.

This helps HR and Finance teams reduce their administrative workload while maintaining better control over statutory obligations and compliance requirements.

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