The question of career advancement is on the minds of most high performing employees and job seekers. But to many companies trying to recruit or retain talent, this poses a conundrum. The mere mention of promotions may make managers squirm, because they know that the chance of promoting employees in the coming year is about as good as winning the lottery.
The problem for many companies is that a return to significant job growth is still a long way off. Therefore, pre-recession rates of upward promotions, facilitated by an expanding employee base, will be unlikely for some time to come. Recruiting and retaining the best and brightest employees in this type of environment is a challenge, to say the least.
Some companies are looking at ways to motivate employees with lateral career opportunities – moving toward a career lattice, rather than career ladder, model. This has a number of implications for the organization’s talent initiatives. L&D programs must be adjusted to build a diversity of skills through job rotations and other development activities. Leadership development and succession management initiatives must also incorporate lateral movement. Career paths may need to be adjusted, and career development discussions will obviously need to factor in possibilities for lateral movement.
The company’s recruiting approach may also need to change to target candidates who are looking for a wide breadth of experience, rather than a purely upward trajectory. As an example, a midsize insurance firm reported that its recruiting strategy has changed considerably during the past two years. Rather than looking for highly skilled, upwardly mobile candidates (the target profile in past years), the company now looks for candidates with a more diverse set of skills who have the potential to succeed in a culture of lateral career moves. The firm’s interviewing process now uses panels to incorporate a diversity of perspectives. The talent philosophy is to recruit for potential and then build the necessary skills in various disciplines. This is a very different approach from prior years and impacts nearly every talent process – from recruiting to development to career and succession management.
As another example, we talked with a UK accounting firm that has a highly talented workforce of over 2,000 employees. Career paths and promotion rates are extremely important to the firm’s staff, who have traditionally had high career expectations. In past years, high performing staff expected to be promoted up through the ranks to partnership in a fairly short amount of time. But as is the case with many companies, the recession has resulted in a business contraction and the firm is expecting slower growth over the next few years. Far fewer partner positions are becoming available, so that the track to partnership is much longer and more difficult than in past years.
Recent focus groups revealed that many staff were discouraged by the limited opportunities for career advancement. So to keep its staff motivated, the firm created a new career development program targeted at Directors – staff at the level just below partner. The program provides training opportunities and access to different experiences, such as leading high-profile projects and cross-functional assignments. Coupled with this program, the firm is launching a new rewards and recognition program which contains a number of monetary and non-monetary awards. The new initiative will allow Directors to enhance their skills, gain broader experience and exposure, and receive rewards and recognition for their efforts, albeit without an official promotion. Through this combination of development, career management, and rewards, the firm hopes to retain its best and brightest through a difficult period of slower growth.
For more information on how to make your talent management initiatives more effective, see our reports "UK Talent Management Factbook 2010" and "U.S. Talent Management Factbook 2010." Both of these reports provide best practices and benchmarks in talent management.