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Want to Reduce Turnover? Make Sure Your Employees Have a Clear Career Path

Topics: Retention

In my current role as an Account Executive at PayScale, I talk to HR and compensation professionals every day. Many of them are on the phone with me because they are concerned about employee retention and they think they can move the needle by changing the way they pay their people. Yet, compensation is only part of the solution, it’s not the whole solution.

When we talk about retention, I always ask these compensation and HR professionals, “Does your organization provide employees with the opportunities to move up and laterally within the organization? Do you have a formal approach to career pathing?” Often, the answer is “no” or “sort of.”

I find it surprising that while so many organizations are concerned about retention, not more are focusing on making sure their employees have a clear career path. In PayScale’s 2018 Compensation Best Practices Report, 59 percent said that employee retention was a major concern for their company.

In PayScale’s 2018 Compensation Best Practices Report, 59 percent of respondents said that employee retention was a major concern for their company.Click To Tweet

A recent article in the Harvard Business Review entitled “Why Do Employees Stay? A Clear Career Path and Good Pay, for Starters” found that one major factor driving turnover is allowing workers to stagnate in their current role. Workers that stay longer in the same role without a title change are more likely to leave that organization to achieve the next step in their career.

So how do you keep your talent within your organization? According to Sylvia Vorhauser Smith, Sr. VP of Global Research at PageUp and co-author of the book Cliffhanger: HR on the Precipice in the Future of Work, you must ensure that the answers to these three questions are “yes”:

  1.     Are there real career opportunities available within your organization?
  2.     Are these visible to your talent pool?
  3.     Are there support structures that facilitate internal career moves?

Are you underestimating the total number of career opportunities available to employees?

One road block for many organizations is identifying internal opportunities and seeing the potential in their existing employees to succeed. Organizations have traditionally thought about career paths as hierarchical, based on technical proficiency and past performance instead of potential. Many organizations are too risk averse to allow employees to do jobs they haven’t done before.

What I appreciate about PayScale as an organization is they have the willingness to look at things differently: to uncover the interests, passions and hidden skills of their employees. Early in my career path, I was drawn to the arts. I drew constantly as a child and teenager, pursued music throughout my twenties and worked for a variety of companies within the music and live event space.

While an artistic career sounded appealing as a young man with few responsibilities, as I grew older, had children, bought a house, I found that a career in the arts wasn’t likely to help me achieve my financial goals as my cost of living increased. Yet, when I talked to my managers about my options to advance within the organization, I would be given shrugs, blank stares and comments along the lines of “What do you want to do?” Without a clear vision of what was available within the organization or what skills were valuable to the organization, I decided that I would be better off going elsewhere.

It wasn’t until I reached PayScale as an Account Development Representative when I finally heard concrete details about how I could grow my skills, add value to the company as an employee and earn more money. Through conversations with my managers at PayScale, I began to see how my experience in the arts industry helps me in software sales. A career in the arts had taught me to have tenacity and how to hustle for work; I wasn’t discouraged when prospects said “no” and knew that a hidden opportunity could be just around the corner. I was also more willing to test creative approaches to prospecting instead of relying on tried-and-true sales techniques.

Is your organization uncovering the latent interests, experience, skills and education in your workplace and applying them to your business needs?

To do so, ask your managers to have open, two-way conversations with their direct reports. Ask your employees what they did before, what they liked or disliked about their previous jobs, and what they see as their strongest skills. Tell them to be honest about what they would love to do, even if it’s something they aren’t currently doing within the organization.

Once you’ve uncovered these elements, give your employees small projects to work on that showcase those talents. From there you can determine if they have the ability to succeed in the next role on your team or if there’s a different path within the organization that’s better suited to their interests.

By showing your employees that you are fully invested in their growth, you earn their commitment to your organization.

Do your employees see the available career paths in your organization?

When you’re looking to expand your team, are you immediately putting up the job posting on LinkedIn, or are you considering your existing employees for the job?

At one of my former employers, the company kept hiring externally for their Director of Marketing despite having experienced marketing professionals on staff. This sent an extremely negative message to the existing lower-level staff, who have the knowledge and the desire to do the job. Many of the existing staff eventually left, as they saw that the company had no interest in helping them advance their career.

Part of the problem is that managers may not be the most effective channel for promoting lateral career moves. For one, managers may be incentivized to hold on to high achievers. Second, they are typically not rewarded for building and sharing the talent pool. To tackle this issue, organizations could consider offering a reward system for managers to develop future talent pools within their department and, obviously, make any open positions known to existing staff.

Additionally, technology can help employees take charge of their own career development. Sylvia Vorhauser Smith suggests that organizations invest in data technologies that collect information on roles, skills and locations to map out dynamic career paths across the workplace. Then give your employees access to all the systems to view and explore these internal career paths and associated development and learning tracks.

Do you have support structures for employees to manage their careers?

One key to supporting career pathing is to make a comparable investment in technology that supports internal career advancement as well as external recruitment.

Modern compensation platforms can reduce turnover caused by underpayment or poor communication around compensation by keeping compensation data current; speeding review cycles to identify potential issues in real time, such as employees who are high performers but underpaid compared to their peers and to the market. They can also provide the analytics and market analysis necessary for your managers to clearly communicate what skills and certifications are worth in the market and how individual employees can grow within the organization.

Parting thoughts

With unemployment at a 17-year low, it’s become imperative to unlock the hidden potential within your existing workforce. Your future game-changers could be toiling away right now in an entry-level position, just waiting for the organization to recognize their diverse talents. You are doing yourself a great disservice by overlooking the talent potential that’s under your nose. Give them a chance to move up before they start scanning LinkedIn for their next career move.

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Do your employees see a clear career path at your organization? We want to hear from you. Tell us your story in the comments.


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Chris Thorpe

Good discussion opportunity for managers and their direct reports.

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