Metric Two: Internal Fluidity

Internal Fluidity is also easy to calculate using data that you likely already have access to. Think of your internal labor as currency, the way that the stock market may think about a stock. The amount of trading of a stock in proportion to the overall number of shares is interesting to investors since it can tell you how much trading is really occurring within the market. The same idea applies to your employee base. You can literally measure how frequently your staff changes positions.

Value. The metric will examine how frequently employees move within the organization. This can help inform management on what growth is happening in the employee population and possibly on employee perceptions.

Audience. VP of Human Resources. This can be used as a management tool to assess the health of the Internal Mobility Program and what interventions may be needed. Key questions that the executive may ask are:

•Is this number too high or too low compared to total hires?
•Are our career pathing tools effective?
•Should fluidity be higher? Is the voluntary turnover rate showing talent leaving for lack of opportunity?
•If fluidity is too high: What intellectual capital leaves when an employee moves, and what systems can be put into place to retain their knowledge?
•If fluidity remains at its current level, what strategy should we adopt to grow employees and minimize voluntary turnover because of a lack of growth opportunities?

Data Elements. In order to calculate employee fluidity, you will need two pieces of data:

  • Total number of internal hires.

  • Total number of employees.

Fluidity is expressed as a percentage of total employees, so by dividing the total number of hires by the total number of employees, Internal Fluidity can be accurately assessed.

Don’t worry too much about the exact employee number to use (since the total number of employees likely changes weekly). You may wish to use the employee count as of the last day of the data that you have for the total number of hires.

Presentation. The Internal Fluidity number is presented as a percentage with commentary.

What if fluidity is too low? There are well-established recommendations for improving internal mobility, including employee career tracks, management versus experienced paths, and improving IT support of internal mobility. However, one problem area boils to the top of your internal mobility program: Is your internal mobility program an open labor market? If not, consider the blockers to an open labor market, and then open it to the point of pain. Employees join companies, and they leave hiring managers. Hiring managers may be too concerned that if employees leave their department the company will suffer. However, if the employees are going to leave and they are valued assets, then allowing them to leave to go to another part of the company is usually preferable. Managers stand to gain as well as lose from an open labor market. Training new managers on the benefits and costs of the open, fluid labor market is critical to success.

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