More than ever, employees want more out of the organizations they work for. They want jobs that are fulfilling and meaningful within an organization that will develop their talents. Employees want to grow in their roles, and career progression is an important part of the growth process. Career progression for existing employees may not be the first thing that an organization thinks about when they’re doing layoffs, but it’s important to remember that we need to keep our remaining employees engaged. To do this, they need to feel they have a career path.
A lack of clear career pathways is a leading cause of turnover in organizations. Turnover is costly - replacing an employee can cost up to 21% of their annual salary. When employees leave, they take with them valuable knowledge and skills, like a key administrative assistant who knows where all the files are stored, the lead salesperson with insight into customers’ needs and business trajectories, or the go-to person in your organization for key data insights. Replacing employees also requires a significant financial investment for companies from recruitment to selection and during the onboarding and enculturation process. So, investing in career pathways just makes sense.
Career progression is the path that a person takes in their professional life as they move from one job or role to another, typically with the goal of advancing their skills, raising their level of responsibility, and increasing their earning potential. This can involve moving up within a single organization, or it may involve switching to a new company or industry. Ideally, your organization supports the career progression journey so that your employees want to stay.
Typically, career progression involves a combination of on-the-job experience, training and development opportunities, and the acquisition of new skills and qualifications. As a person gains experience and proves their ability to handle new responsibilities, they may be offered promotions or given the opportunity to take on more challenging roles within their organization. Employees need these skills and experiences spelled out clearly for them; otherwise, the path looks more like an obstacle course in the dark. Employees are left trying to feel their way along the path and try to anticipate upcoming hurdles and challenges to achieving career growth.
There is no set path for career progression, and the specific steps that a person takes will depend on their individual goals, interests, and the opportunities that are available to them. Likewise, the specific steps your organization offers to support this journey will be unique to you. Some people may focus on building expertise in a particular industry or area of business, while others may choose to broaden their experience by taking on a variety of roles in different organizations. This is generally referred to as specializing or generalizing.
In general, career progression for employees requires a combination of hard work, dedication, and a willingness to take on new challenges. But an organization needs to meet employees halfway. You can do this by developing clear career pathways. Career progression can be a rewarding process for everyone - employees grow personally and professionally, and organizations have a stable workforce who are engaged.
Employee turnover is tough on organizations because it can lead to a number of negative consequences. These include:
Loss of expertise and knowledge: When employees leave an organization, they take with them valuable knowledge, skills, and experience that can be difficult to replace. For example, Yusef in Accounting has been with the organization for several years. He holds a tremendous body of tacit knowledge and has developed systems that have significantly increased his efficiency during his tenure. However, this knowledge and skill has not been documented or shared across the department. If Yusef leaves, this experience leaves with him. This can lead to a decline in the overall expertise of the organization and make it more difficult to achieve its goals and objectives.
Increased costs: Hiring and training new employees is often a time-consuming and expensive process. High turnover rates can lead to increased costs associated with recruiting, onboarding, and training new employees. This can even lead to burnout in your HR team - Priscilla in Talent could be stretched to her limits with high turnover.
Loss of productivity: When employees leave an organization, it can disrupt the workflow and lead to a decline in productivity. This can negatively impact the organization's bottom line and make it more difficult to compete in the market.
Negative impact on morale: High turnover rates can create a negative and uncertain work environment, which can lead to decreased morale among remaining employees. This can impact their job satisfaction and performance and potentially lead to further turnover.
Damage to the organization's reputation: High turnover rates can also damage an organization's reputation and make it more difficult to attract and retain top talent in the future. This can have long-term negative effects on the organization's ability to compete and succeed.
All of these factors are interrelated and can cause increased turnover. Now that we’ve made the case for why you want to avoid turnover, let’s turn back to career paths as one retention solution.
Clear career pathways help your business by providing a clear and structured path for employees to advance within your organization. You will retain top talent, as team members are able to see the potential for growth and advancement within the company. It also allows for better succession planning and career development, letting employees know what skills and experience they need to develop in order to move up (or across) the ladder.
Clear career pathways improve morale and motivation among employees, as they have a sense of direction and purpose within the organization. Connect with Pando for a demonstration of how our product aligns individual goals with the broader goals of your organization, leading to improved performance and productivity.