Description
Percentage of employees that moved internally during the reporting period, including transfers, promotions and demotions.
Formula
Internal movements / Average headcount * 100
Interpretation
Internal Movement Rate indicates the percentage of the workforce that has moved internally during the period. Internal movements are those resulting from employees’ internal job changes within the organisation, whether through actions of transfer, promotion or demotion.
For example, an Internal Movement Rate of 40 per cent means that 40 per cent of employees in the organisation have experienced one of these movements within the period.
Many organisations consider internal movement to be a positive contributor to employee development, where employees are either moving upward into positions of greater responsibility or moving laterally to gain additional, beneficial functional or business unit experience.
Internal movements also improve organisational costs and efficiencies in instances where employees who would have otherwise sought a new position externally instead find new roles internally that suit them. While demotions would not likely signify positive employee development, most organisations very rarely demote employees.
Organisations that experience excessive internal movement of employees risk productivity losses resulting from high vacancies and ramp-up time in new roles. Therefore, organisations must balance the development opportunities and organisational agility benefits of movement with the risk of fostering identity crises among employees.
Data Sourcing
Organisations typically source data related to internal movements from the job table of an HRIS.
Analysis
As this measure focuses on movement as a development opportunity, analysis is commonly performed by demographic or positional characteristics by which employers monitor development, such as tenure, age, ethnic background, gender, supervisor, organisational unit, occupation and job family.
Limitations
This measure does not indicate the extent to which an employer fills roles using internal movement
as opposed to external hires. Internal Movement Rate looks at all internal movements and does not differentiate between upward, lateral and downward movements. The measure does not indicate which internal movement opportunities might have prevented a likely termination.
Targets
Targets will vary based on organisations’ strategies and policies around internal movement. Organisations wishing to make heavy use of internal movement for employee development opportunities will likely target moving results toward the 751 percentile of a benchmark group, or an absolute result of approximately 30 to 50 per cent per year (assuming all transfers, promotions and demotions are included).