Internal Labor Market Analysis® | Mercer

Thriving Workforce

Internal Labor Market Analysis®

Mining your workforce data for fact-based business decision making

Mercer’s proprietary Internal Labor Market (ILM) Analysis® provides a fact-based platform for making many essential decisions about human capital. At a basic level, it examines the flow of people into, through, and out of an organization to answer fundamental questions about a firm’s workforce: who gets hired, who performs well, who advances and who stays. 

At a more advanced level, ILM analysis provides critical insights into the operation of an organization’s management system, reflecting actual (versus perceived) practices and their consequences. It focuses on causal links between critical workforce events and behaviors over time, revealing which attributes and management practices account for workforce outcomes. The analysis answers questions like:

  • How is talent developed?
  • What actually gets rewarded?
  • Are we attracting, selecting and retaining top performers?
  • What is the value of internal job movement?
  • How do employee attributes such as education or tenure impact performance for each job?
  • How can I use HR tools such as compensation, benefits, selection, career development programs and training to build the workforce I need?

The ILM tool can also be used in tandem with Mercer’s Business Impact Modeling® to help an organization determine how to manage its workforce to maximize business performance.

Mercer’s data-based consulting uses both quantitative and qualitative methods to help organization manage their people programs more effectively—and demonstrate the return on their investment in these programs.

How it works

ILM analysis draws an organization’s HR and payroll data and other relevant sources, including data on overall labor market conditions, and uses sophisticated statistical modeling techniques that Mercer has been perfecting through research and work with companies since 1994. It can be applied to the entire workforce or to particular occupational groups and business segments.

ILM’s objective identification of workforce drivers can accurately depict the culture and values of an organization. It can be used to forecast the effects of specific changes in management practices and market conditions as well as the shape and composition of an organization’s future workforce if current practices continue. This is a valuable application that many organizations are leveraging to respond to rapidly changing workforce planning demands.

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