This is also useful for organisations that are concerned about promotion speed as a possible driver of undesirable turnover.
Average position tenure, in years, prior to promotion.
Total position tenure prior to promotion / Promotions
Promotion Speed Ratio indicates, for employees that were promoted during the period, their average tenure in position prior to promotion.
For example, an employee promoted two years after being hired into a position has Promotion Speed Ratio equal to two years. An employee who is hired, then transfers to a new unit after one year, and then gets promoted after one more year, has Promotion Speed Ratio equal to one year.
Promotions ideally signify strong individual performance and readiness to assume higher levels of responsibility.
Additionally, promotions are often viewed as an essential component of the organisation’s recognition of and reward for strong performance. The speed at which promotions occur is often quite telling about an organisation’s internal movement strategies and norms.
Many organisations operate under norms in which employees are generally expected to be in position for a couple of years before they are seriously considered for promotions.
A growing number of organisations, especially those in industries that are rapidly changing or that average consistently low tenure, operate under much faster-paced promotion cycles.
For these organisations, high-performing talent can be fickle and may quickly seek new job opportunities if upward development is not readily available. Even more traditional organisations are likely to have pockets of talent in particular functions or age groups that expect faster promotion cycles.
This measure can help organisations monitor promotion speed to ensure it is fast enough to keep high-performing employees engaged to moderate the risk of termination if promotion opportunities are rare.
Alternatively, this measure can be used to ensure that employees spend sufficient time in their role prior to promotion to ensure adequate understanding of the role and preparation for the responsibility commensurate with the promotion.
Data related to promotions are typically sourced from the job table of an HRIS. Populating this measure also requires identification of employees’ movement into positions in order to calculate tenure in position.
Promotion Speed Ratio is commonly analysed across a broad range of analysis dimensions aimed at understanding the organisation’s rising managers and high-performing workforce. Such dimensions include age, tenure, employment level, occupation, job function and pay grade.
To identify potential issues of performance management process controls, it is helpful to analyse by organisational unit, manager and performance rating.
One important consideration for Promotion Speed Ratio is that it measures the speed for the promotions that occur; employees never promoted will never enter into this measure.
Also, it does not address whether promotions occur in the normal course of performance reviews or as movements into higher-level positions in other units. Without further analysis, it does not indicate at what hierarchical level promotions take place.
Targets will vary based on organisations’ promotion strategies and norms.
Employers operating in talent markets that expect fast promotion cycles, or that wish to leverage fast promotion cycles as a differentiator of the employment brand, are likely to target a Promotion Speed Ratio to move toward the 25th percentile of the benchmark.
Other organisations are likely to target moving results toward the median of the benchmark group.