20 Metrics in 20 Days- Day 4: Promotion-to-Transfer Ratio

Day 4 in our series of 20 consecutive posts on HR metrics: Promotion-to-Transfer Ratio

Definition

The Promotion-to-Transfer Ratio is exactly what it sounds like: the ratio of promotions to transfers within a given period of time.

Promotions are those movements up the established hierarchy of roles.

Transfers, often referred to as “lateral” moves, are movements for positions at the same organizational level.

Note that this ratio is also sometimes referred to the Career Path Ratio. However, I have seen the “career path ratio” defined as both the promotion-to-transfer ratio (as I have it here) as well as the number of promotions divided by sum of promotions and transfers.

Sometimes HR is a bit loose with its measures so just be sure to read the fine print and be consistent with your own measures and communication.

Additional Considerations

Although it might make sense to look at this ratio within a single year, promotions and transfers may be comparatively rare. I therefore suggest looking at the numbers over two or three years, especially in a smaller organization. That will help smooth out the impact of any random fluctuations that can distort measures of low frequency events and give you a better sense of the overall picture.

Every organization is different so be sure to at least explore different measurement windows and get a feel for the numbers at your company.

Why You Should Care

Moving people around will help them get to know different parts of the organization and acquire different skill sets. In a nutshell, this means professional development.

But at some point people need to be taking on greater responsibility. Otherwise, the transfers just end up moving people from places where they have mastered the role to places where they are ramping up. That will reduce productivity.

All of that learning needs to pay off for the organization in the form of knowledgible leadership.

Actions and Additional Considerations

If you are shifting without promoting, you may need to reconsider your talent development practices and be clearer about the paths to promotion in practice.

Employees sometimes initiate a transfer precisely because they think their promotion path is blocked or non-existent.

If people feel limited to lateral moves, the most capable and ambitious will move out the door.