What is a career path ratio?

A career path ratio is an HR metric used to calculate employees’ rate of growth, based on vertical and lateral movement within the organization.

How is the career path ratio measured?

The most accurate way to measure your career path ratio is to use the human resource information system (HRIS) data, which should record all job changes and show whether they were lateral or vertical moves.

How to calculate career path ratio?

An individual’s career path ratio is calculated by dividing the number of promotions they have had over a given period by the total number of transfers or role changes.

Why should HR leaders care about a career path ratio?

HR leaders can use career path ratios to track employee development and engagement and encourage growth and success. The numbers are a quantifiable reminder to guide employees toward upward promotions or lateral expansions, depending on their skills and the company’s needs.

What is a good career path ratio?

In general, an organizational career path ratio above 0.5 can be considered good as it indicates that at least half the employees have experienced upward mobility. However, this will vary across industries and businesses as all have their own challenges and opportunities for employee growth. By keeping a record of your career path ratio over a long time and comparing it with company performance, you can spot trends and identify what a good figure for your organization is.

What can HR leaders do to encourage balanced career path ratios?

HR leaders can use career path ratios to help them better assess employee movement within the company. Each person is unique, so the career path ratio formula can be most effective when combined with human guidance.

How improving career path ratios can help company culture?

The career path ratio metric provides managers and leaders with indisputable data about each employee’s job movement. The more involved and informed HR leaders are in employee movement, the more guidance they can offer their team members as they forge their career paths. Supporting employees in their journey can increase job satisfaction and engagement, and build a company culture of motivated and enthusiastic individuals.

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