In today's ever-evolving business landscape, taking time to comprehensively define potential career paths up and around your organisation has never been more important. This is particularly the case as companies struggle to retain employees post-pandemic. Gallup recently found that 49% of U.S. employees are watching or actively seeking a new job. The same is true in the UK, with an additional 36% waiting until the economy improves - or for the right opportunity to arise - before they make a move.
As retention falls, recruitment costs soar. When costs are factored in for recruiting, hiring, training, and onboarding, replacing an employee can cost up to 21% of the annual salary for a role. When scaled up across all roles, this is a significant cost for any organisation.
A study reported in the Harvard Business Review found that workers who stay for a while in the same job, without a title change, are significantly more likely to leave for another company for the next step in their career. The study suggests that employees who do not see a clear progression from their current role to a better position in the same organisation are more likely to turn to opportunities elsewhere.
The solution to this is to be clear about the opportunities that exist around your organisation, and to build career paths that show employees a route to get from where they are now to where they want to be.
However, a barrier for many organisations is that their job titles, job content and job architecture are in such a chaotic state that this prevents the development of career paths within functional areas let alone laterally across the organisation. Employees are often left in the dark about opportunities within their business area or those that exist outside of their own team or function.
Career paths, sometimes also called Career Ladders, map out how internal movement can happen within an organisation. They provide a roadmap for employees to identify potential opportunities for the next step in their career based on their skills, interests and career objectives.
At a basic level, they show all the possible career path opportunities within a particular function. At a more advanced level they map out permanent and project-based opportunities laterally across the organisation based on skills requirements.
An example of a simple, vertical career path design within a function would be:
Source: Radford
Some organisations – such as Mastercard, BP and Rolls Royce - have also developed functional dual ladder career paths where employees can choose either a “technical / specialist” or “managerial” career path depending on whether they want to manage a team or not.
Example of Dual Career Path for Engineering roles:
More evolved, pan-organisational career paths will show how employees can use their existing skills to change disciplines, by moving laterally between functions, and where an employee can move up and across an organisation through a cross-functional promotion. These more varied career paths are particularly important as employees move away from wanting to progress through a traditional career path and instead are keen to navigate laterally and vertically, through a more complex web of opportunities, skill enhancements and role transitions.
Well-defined career paths tell employees exactly what the demands and requirements of each role are, so they are clear about what each job involves and what they must do to progress form one job to the next.
Each role in a career path needs a clear outline of the role showing the scope, responsibilities and requirements (knowledge, skills, competencies).
The career paths should make use of job levelling to show how different roles relate to one another in terms of level of responsibility and requirements. It should be clear where the similarities are between roles but also what the key differences are and what training and development is available for people wanting to progress into each role.
One of the main factors that prevents the development of career paths is the state of an organisation’s job structure, also known as a job architecture.
Many organisations exist as a long list of job titles and associated job codes that have been added to organically as the organisation has grown, changed, merged or acquired. Without proper governance or oversight, there is often a resulting state of chaos – hundreds of job titles, many just slight variations of each other, job levels all over the place and inconsistencies in salary ranges across roles, business areas and regions. Job descriptions can be equally chaotic with different formats and inconsistent information making it challenging to clearly articulate the differences in one job to another.
There are many impacts on career paths of this chaos:
Sometimes basic career paths can be defined without a job architecture in place, but these will remain within individual job functions and won’t give a clear picture to those looking for a wider range of opportunities.
A job architecture forms the building blocks of an organisation. It provides a framework for defining and aligning jobs within an organisation based on the work performed.
A well-designed job architecture can play a crucial role in defining career paths around the whole organisation by:
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