Some 70 per cent of employees are dissatisfied with a lack of future career opportunities, leading to turnover costs of approximately $25,000 or £16,000 per employee.

So says a survey of more than 12,000 employees worldwide by best practice insight and technology company CEB. The report highlights how traditional, linear career paths are a thing of the past, with today’s flat organisational structures causing employees to spend more time at each job level – roughly three more years than in 2010. Promotion opportunities have decreased over the last decade as a result of companies removing positions and management layers to save money.

Rather than encouraging an environment where promotions are the measure of career progression, companies should build growth-based career cultures where moves across functions are not only planned, but encouraged. Doing so not only improves employee engagement, but also helps improve the bottom line. By providing better career opportunities for employees, organisations can decrease turnover by 33 per cent, so an organisation with 10,000 employees could save $7.5 million a year.

“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,” said Brian Kropp, HR practice leader at CEB.

“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,” he said.

The key to building a growth-based career culture is to create reciprocal value between employee and organisational interests. Rather than encouraging staff to manage their own career paths, employers should build career partnerships, where employers and employees work together to ensure development opportunities encourage personal growth and fulfil organisational needs. In successful career partnerships, employees receive the development they require to grow their careers, while organisations decrease the skills gap by helping build capabilities needed in the business. These partnerships are three times more effective at increasing employees’ satisfaction with careers than when employees are encouraged to own their individual career path.

“While employees should play an active role in their own development, they shouldn’t be encouraged to go at it alone,” Kropp added. “When organisations 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.”

To build career partnerships and create growth-based cultures that provide competitive and satisfying careers for employees, companies should:

  • Design careers around experiences that allow employees to grow with the organisation
  • Motivate employees with employability – the capabilities, skills, knowledge, experiences, achievements and personal attributes that make him/her more valuable to an employer – rather than title progression
  • Deliver targeted internal job opportunities to employees before they actively look for a job, and
  • Overcome talent hoarding by creating a talent brokerage that allows managers to both import and export talent.