Developing Careers — Focus on Marketability

The Case for Career Development

Reports on business trends for 2016 show that one of the key priorities for executives this year is human capital management.  In particular, can companies access the talent they need to succeed in an uncertain future?

Executives are grappling with ensuring they have the right talent when the market for talent is expected to shrink.  Projections of talent shortages stem from the shifting demographics of the workforce as baby boomers retire — depleting both the number of working age people and the knowledge and experience gained from years of managing through technological- and business cycle- changes — and from a potential dearth of skills and knowledge needed in the future that future workers may not be developing today.

With projected talent shortages in sight, executives have renewed interest in attracting and retaining key talent.  Companies regularly assess employee engagement as a leading indicator of “intent to stay” as well as the willingness of employees to devote discretionary effort to contribute to the company’s success.  An important factor for engagement is an employee’s perception of opportunities to advance their careers at the company.  For many, there is a perceived lack of career opportunities, leading companies to revisit their approach to employee career development.

Career development is critical both for improving employee engagement and for ensuring the company develops the capabilities it needs for the future — to execute its long-term strategy.

The Career Development Paradox

Employees typically translate “opportunities for advancement” to mean perceived opportunities for promotion.  In hierarchical organizations, promotion is the concrete recognition of career advancement.  It brings with it status and compensation.

Companies struggle with creating environments where employees believe opportunities exist to advance their careers.  It is not surprising that the vast majority of employees will perceive their opportunities for advancement as shrinking in a hierarchy.  By definition, there are fewer roles to be promoted into as one moves up the hierarchical ladder.  Years of removing management layers have exacerbated this situation.

Employees, used to formal, hierarchical organization structures, expect their employers to lay out clear step-by-step paths for them to follow or, at least, some guidance on the direction their careers could take. Yet, a focus on career paths and promotions sets companies up for raising employee expectations that, for most people, can’t be met.

Furthermore, in today’s dynamic environment, highly structured, stable career paths are becoming obsolete.  Rather than worry about how to advance to higher levels of managerial responsibility and achieve the associated pay increases with one employer, more and more, today’s workers are concerned about their marketability and are willing to change employers in order to build their capabilities and have impact.

In their March 22, 2016 HBR article, Katie Willyerd and Barbarta Mistick point to their research to say that what worries people most at work is a fear of becoming obsolete.  https://hbr.org/2016/03/assessment-are-you-in-danger-of-becoming-obsolete (Note:  HBR subscription by be required). They include an assessment you can take to see how well you are preparing yourself for the future.

A New Framework

If executives want to ensure their company has the capabilities needed for the future, they need to shift mindsets on what constitutes career advancement.  To do so means addressing the underlying desires of employees that have traditionally been met through promotion — that is, status and pay or marketability.

This means providing information to employees on the current and future needs of the organization, so they can begin to build capabilities in their areas of interest that will be valued by the business.  It also means recognizing when an employee attains higher levels of expertise or acquires new skills and knowledge — whether through assignments, pay, or both.

At the same time that companies are reconsidering career development models and support, some are also experimenting with more effective approaches to managing human performance.  As a result, pay for performance practices will be reconsidered.  Where appropriate, companies may focus more on skill-based and/or market-based pay so that managers and employees can devote energy to building capability and improving productivity rather than year-end reviews and bonus justifications.  A skill-based or market-based approach to pay will provide mechanisms for recognizing and rewarding career advancement through capability building vs. promotion alone.

Recent research by the Corporate Executive Board provides examples of practices various companies have implemented to reframe career development — calling for an employee/manager partnership in career planning rather than putting responsibility solely in the hands of the employee.  What is clear is that job posting and providing templates for creating career goals and plans isn’t sufficient.

A company’s approach to career development needs to address the underlying needs of the business and the employees.

How will your company ensure that employees don’t become obsolete and are positioned to take the business and their careers to the next level?