KPI of the Day – Human Resources (HRM): % Internal promotion rate
Definition
Measures the rate at which open positions are filled through an internal promotion process, within the organization.
Purpose
To evaluate the organization’s ability to grow internal talent capable of filling different roles.
Recommendations
Measuring promotion rates along with other human capital metrics, such as time-to-fill, recruiting costs, and performance effectiveness of promoted candidates once they are in new positions, helps to determine if promoting from within yields a return on investment.
However, this does come with certain limitations, such as strict monitoring of recruitment details is required, to ensure accurate data is reported for this indicator. A certain level of maturity in HR management systems is also a prerequisite.
Furthermore, looking for ideal thresholds by mimicking a different company’s thresholds is not recommended, as these always vary based on company and industry.
One simply has to remember that when filling different positions, organizations can select internal candidates or rely on external hires. Both types of candidates offer different benefits for the organization. However, internal promotions have the power to be more successful because there is more information available to make accurate decisions.
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Tags: Human Resources performance, KPI
