Are the employees working for you happy? Do they feel that they have the right career opportunities in your company? These are major questions you should address if you want to retain talent in your organization.
According to CEB, a US based technology company that offers insights on best practices, more than 65% of employees are not happy with the career opportunities available in their organizations. Due to this, these organizations are losing millions of dollars in turnover. Only if these entities realize the importance of improving engagement of their work force by putting in place growth-based cultures, they can stop incurring this huge loss.
The traditional system is offering career paths that are linear in nature. This means employees will get only one promotion at a time. In such flat organizational structures, employees will be spending more number of years at each level. Studies conducted about this in 2010 revealed that during that year, employees spent three or more years at the same job level. Experts call this as 'stalled progression' and this has resulted in dissatisfaction among 70% of employees. These employees have started feeling that their career opportunities are not satisfactory and hence, they decide to leave their companies. This results in huge turnover costs for the organizations.
In fact, promotional opportunities have shrunk during the last decade because companies have removed positions as well as management layers with an intention to save money. CEB conducted a survey in which over 12,000 employees throughout the world participated. These employees categorically stated that the main reason for their decision to quit a company is lack of career opportunities.
Apart from employee turnover, companies will face another issue also and that is their existing teams will face more stress. This will slow their productivity and this may cost the companies to the tune of about $25,000 per employee. In large enterprises, this may add up to a whopping figure.
Career experts suggest that companies should dispense with the concept of measuring career progression with promotions. They should instead infuse career cultures that are growth based. Such cultures mainly involve planning and encouraging employees to move across functions. This will improve employee engagement and chances of improvement of career growth also increase. This can reduce employee turnover to the extent of 33%, say experts. An organization with approximately 10,000 employees can save $7.5 million dollars a year.
According to Brian Kropp, who belongs to the HR department of CEB, "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. 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."
In short, creating reciprocal value by creating a synergy between the interests of an organization and employees can build a career culture that is growth-based. Instead of encouraging and expecting employees to chart the course of their career paths, organizations should find ways for building career partnerships so both employers and employees can work together for ensuring development opportunities, encouraging personal growth and fulfilling the needs of the organization. This strategy will help the employees have the growth they seek. This will help the organizations reduce the gaps in skills because they will be able to build needed capabilities for their business. Experts firmly assert that this strategy is three times more powerful than if employees are expected to chart their own career growth.
Kropp adds, "While employees should play an active role in their own development, they shouldn't be encouraged to go at it alone. 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."
Simply put, for creating growth-based cultures, organizations should design careers around the experiences of employees so they can grow along with the organization.
Secondly, employees must be motivated with employability which means their capabilities, knowledge, skills, experiences, personal traits and achievements and not just title progression will make them more valuable to employers.
Organizations should make available to employees targeted job opportunities before the employees decide to look for alternative jobs.
Managers should be allowed to export or import talent for which a talent brokerage must be created. This will help in overcoming the problem of "talent hoarding."