Are Your Employees Looking For Career Advancement?
Recruiting and retaining a talented workforce continues to be a struggle
for many employers, especially as younger individuals enter the workforce.
According to a study by Gallup, millennials are the most disengaged of all
working generations and are the most likely to leave their jobs in the next
12 months if the job market improves. Nearly half of actively disengaged
millennials want to find a new job, while only 17 percent of those actively
According to a study from McLean & Company, a research and advisory
firm, disengaged employees cost organizations approximately $3,400 for
every $10,000 in annual salary. This study estimates that disengaged
employees cost the U.S. economy up to $350 billion per year due to lost
In addition, turnover can be extremely expensive for employers when lost
productivity and replacement costs are taken into account. According to the
Society for Human Resources Management, it costs, on average, six to nine
months’ salary to replace a salaried employee—highlighting the importance
Employees consistently rank career advancement opportunities as an
important factor in accepting and keeping a job.
One retention strategy
that is gaining traction within the HR industry is the idea of career
pathing. Career pathing is a comprehensive process offered by employers
that asks employees to take an honest look at their career goals, skills,
education, experience and personal characteristics. Employees are then
asked to make a plan for achieving what is necessary in each of these areas
in order for the employee to advance within the company.
ABM Insurance & Benefits examines the benefits of career pathing and offers
step-by-step instructions on how to implement this model at your
organization. Career pathing resources will also be included at the end of
the toolkit to help employers develop their own career pathing programs.
Why is Career Pathing Important?
Traditional career ladders have been the norm for employers for years.
Career ladders typically involve a progression of jobs within a certain
field ranked from the highest to lowest based on the level of
responsibility and pay. Career ladders tend to be hierarchical in nature,
which can be a turnoff for younger generations. Millennials and Generation
Z—those born between 1995 and 2010—tend to prefer companies will a less
rigid corporate structure.
Career pathing offers employees greater flexibility and more room for
advancement. While career pathing does include forms of traditional career
ladders, it also offers employees dual career ladders and the opportunity
to move horizontally within a company.
Dual career ladders, for instance, allow employees that may not be
interested in a management role to move up in the company if they have a
particular technical skill or education. Dual career ladders are more
common in the scientific, information technology and engineering fields.
Horizontal career movements, on the other hand, allow individuals to move
between different departments at a company and broaden their skills.
Most business leaders recognize that talent development is essential.
However, according to a study from Randstad, while 73 percent of employers
note that fostering employee development is important, only 49 percent of
employers say leadership is adhering to this principle—highlighting a
significant area of improvement for many employers.
Benefits of Career Pathing
The following benefits can be achieved through a formal career pathing
Ability to recruit qualified candidates
—If you are struggling to recruit top talent, look at the practices of
your competitors. If your competitors offer career pathing
opportunities and you do not, you may be losing out on qualified
candidates due to the allure of talent development programs at other
Greater opportunities for advancement
—If your company offers few or no internal advancement opportunities,
employees may feel stuck or bored in their current roles. As a result,
employees who began in entry-level roles may look elsewhere for
employment after they have gained a few years of experience. Career
pathing provides employees with an ongoing mechanism to sharpen their
skills, which can lead to mastery of their current jobs, promotions and
Higher employee engagement and lower turnover—
Today’s workers are less committed to the companies they work for than
employees were 20 years ago. According to a recent study from Multiple
Generations at Work, 91 percent of millennials will stay at a job for
less than three years—a pace that equates to 15-20 jobs over the course
of their careers. Employees at organizations with career pathing tend
to be more engaged because they feel like their employer is concerned
about their growth and long-term success. Engaged employees are less
likely to look for a new job, which can help reduce turnover-related
More leadership diversity
—Diversity is key to bringing innovative ideas to your organization. By
building your talent base and promoting internally, you can gain
perspectives from employees who may have begun in entry-level positions
and who bring various backgrounds and experiences to the table.
How to Implement a Career Pathing Program
Below are five main steps to consider when implementing a career pathing
Step 1—Identify Career Progression Needs
Before jumping into a career pathing program, it is important to assess
your company’s needs. Ask yourself what you hope to accomplish from a
career pathing program. If turnover at your company is high, the goal might
be to reduce turnover costs. If productivity and morale are low, your
objective may be to increase employee engagement.
In order to identify your company’s needs, consider creating a focus group
that represents various levels and positions within your company to gauge
what career development opportunities would resonate most with employees.
You may also wish to sit down with supervisors or management to ask what
they believe are the biggest hurdles in their departments regarding
retention and engagement. Another cost-effective solution is to create a
short, informal survey that asks employees how they view advancement
opportunities at your company and what they would like to see improved.
Step 2—Build Framework
In order to develop a career pathing program, you must first have a “job
family,” or a collection of job descriptions that include competencies,
education, experiences, credentials and necessary qualifications. Job
descriptions should accurately reflect the duties and responsibilities of
each position as well as list any minimum qualifications. Items within the
job family should be easy to read since employees will reference these job
descriptions when they map out their career paths.
Step 3—Evaluate Employees’ Goals
HR should encourage managers to sit down with their employees to discuss
their career goals and evaluate their current skills, experience and
education. Managers should compare their current abilities and
qualifications to their short- and long-term career paths in order to
determine what skills or experience still needs to be acquired. Managers
should be honest and transparent in their feedback because false hopes or
expectations can cause employee dissatisfaction.
Step 4—Develop a Communication Plan
Communication is essential when rolling out a career pathing program. If
employees do not know that career pathing exists or how it could benefit
them, the program will not reach its full potential. In order to increase
your return on investment (ROI), it is important to develop a robust
communications plan. Using multiple communication platforms like email,
intranet postings, meetings and presentations, can raise awareness of your
Not only should the initial implementation of the program be well
advertised, but HR and management should continue to remind employees about
opportunities for growth on a regular basis. For example, if your
organization has a mentoring program, make sure that mentors are aware of
their mentees’ career goals and that they work with them to provide the
skills mentees will need to succeed. Another option for continued
reinforcement is during performance reviews. Whether these are done
annually, quarterly or more frequently, make sure that managers ask
employees about their career path progress and see if there is anything
they can do to help employees reach their goals.
Step 5—Assess Program Results
After rolling out a career pathing program, it is important to evaluate its
success. Gauging the program’s ROI will depend on the goals of the program.
For instance, if your goal was to reduce turnover, you can measure your
organization’s turnover rate. If it dropped, you can then add in cost
savings from replacement costs, which include recruiting, orientation and
Remember that some metrics will be harder to quantify, like employee
morale. In addition, remember that career pathing programs may take several
years to achieve a significant ROI, as changing a company culture and
employees’ perceptions of an organization can take time. Surveying
employees to identify areas for improvement can also be an effective tool
to optimize your program.
Career Pathing Best Practices
In addition to taking the steps above, there are other strategies
businesses can consider to maximize their career pathing programs,
including data analytics and internal talent management systems.
Utilizing Data Analytics
Analyzing external and internal data can help you better understand the
needs of your employees. By examining external benchmarking data on market
salaries, competitors’ benefit offerings and more, organizations can ensure
that their compensation and benefits are competitive. Assessing external
data is important because while employees will be appreciative of the
opportunities that career pathing programs provide, if your compensation
and benefits are significantly below that of your competitors, you may
still experience high turnover.
It is also important to utilize internal data such as employee surveys,
management feedback, exit interview results and more in order to fine-tune
your career pathing initiative. In addition, employers may consider looking
into data aggregation technologies that harness information about roles and
skills within an organization so HR can more effectively map career paths
across a company. For instance, the software may detect that individuals in
“x” role typically have a certain set of skills, experiences or education,
which can save HR staff administrative time when outlining career paths.
Leveraging Internal Management Platforms
Despite the high costs associated with turnover, most organizations invest
more in external recruitment than in internal career management platforms.
While internal career management platforms require an initial investment
(and perhaps ongoing administration costs), if run successfully, they can
pay for themselves and more by reducing the amount of resources spent on
recruiting and training new employees.
HR managers should consider upgrading to a Cloud-based system with powerful
functionality that gives employees online access to their career progress.
While systems will vary based on organizational needs, consider online
portals or internal websites that allow employees to monitor their training
plans, individual and team goals, performance reviews and more. This site
can also be an area where employees can maintain online resumes
highlighting their accomplishments and roles within your organization. That
way, when a new position opens, HR can easily search the existing talent
base to see if any current employees match position requirements.
Within this system, consider allowing employees to list their career
preferences, including what they would like their next career moves to be
and any long-term goals. Managers and HR can then review employee profiles
to ensure that they are providing the resources and support to encourage
ongoing career development.
Position Your Company for Success
By using the strategies mentioned above, you can build a career pathing
program that is right for your business. By providing employees with career
development opportunities, you can increase engagement, improve employee
morale and reduce turnover costs—all of which can boost your company’s
For more information on developing a career pathing program or for insight
into retention strategies, contact ABM Insurance & Benefit Services