Promotion opportunities have decreased over the last decade as a result of companies removing positions and management layers to save money. According to a CEB survey of more than 12,000 employees worldwide, a lack of future career opportunities is the number one reason people quit their job. Employee turnover, in addition to stressing existing teams and slowing productivity, costs organizations approximately $25,000 per professional employee—a figure that can quickly add up for large enterprises.
Rather than encouraging an environment where promotions are the measure of career progression, companies should build growth-based career cultures where moves across functions are not only planned but are also encouraged. Doing so not only improves employee engagement but it also helps improve the bottom line. By providing better career opportunities for employees, organizations can decrease turnover by 33%, saving an organization with 10,000 employees $7.5 million per year.
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“Employees don’t jump for joy at the idea of a lateral move because companies don’t promote such movements as being beneficial to career development,” said Brian Kropp, human resources practice leader at CEB. “To continuously improve skills and build job satisfaction, employers and employees need to start thinking about careers in terms of continuous growth rather than focusing on promotions. Increasing job satisfaction does more than keep employees happy—it can save significant money by reducing unwanted turnover.”
The key to building a growth-based career culture is to create reciprocal value between employees and organizational interests. Rather than encourage employees to manage their own career paths, employers should build career partnerships where employers and employees work together to ensure development opportunities, encourage personal growth, and fulfill organizational needs. In successful career partnerships, employees receive the development they are seeking to grow their careers, and organizations decrease the skills gap by helping build capabilities needed in the business. These partnerships are three times more effective at increasing employees’ satisfaction with their careers than when employees are encouraged to own their individual career paths.
“While employees should play an active role in their own development, they shouldn’t be encouraged to go at it alone,” Kropp added. “When organizations approach employee career paths as a partnership and make development a regular part of conversations, not only do they improve employee engagement but they also ensure development happens where the business needs it most.”
To build career partnerships and create growth-based cultures that provide competitive and satisfying careers for employees, companies should:
- Design careers around experiences that allow employees to grow with the organization;
- Motivate employees with employability—the capabilities, skills, knowledge, experiences, achievements, and personal attributes that make him or her more valuable to an employer—rather than with title progression;
- Deliver targeted internal job opportunities to employees before they actively look for a job; and
- Overcome talent hoarding by creating a talent brokerage that allows managers to import and export talent.
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