Career Path Ratio

What is Career Path Ratio?

The Career Path Ratio (CPR) is a metric used to measure the balance between internal promotions (vertical growth) and lateral moves (horizontal growth) within an organization. It helps organizations understand how employees are advancing in their careers and whether they are climbing the corporate ladder or expanding their skills through cross-functional experiences.

How to calculate the career path ratio?

Career Path Ratio = Total Promotions ÷ (Total Transfers + Total Promotions)

Importance of Career Path Ratio:

  • Talent Development: Indicates if the organization focuses more on vertical advancement or lateral role expansion.

  • Workforce Planning: Assists HR in understanding employee movement trends to enhance career paths and succession planning.

  • Skill Diversification: Promotes cross-functional learning when lateral transitions are included in the strategy.

  • Retention Insights: Reveals whether employees believe they have sufficient growth opportunities, which affects their engagement and retention.

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