Career Advancement Is the Key to Retaining Employees

Want to keep workers at your company from leaving their jobs? More than ever, a promotion might be the best way to achieve that.

A study by Pew Research found that 63% of respondents who left jobs last year did so due to lack of advancement opportunities. A separate study by McKinsey backed up those findings, with a lack of career development cited as one of the chief reasons people leave.

Workers are increasingly focused on their career advancement, and even in the quickly evolving job market that exists today, the onus is quickly being shifted to employers to make their employees aware of opportunities and to create a culture that encourages them to move up.

Research from MIT Sloan interviewing 1,000 workers at over two dozen organizations found that 67% wanted to advance their career, but 49% said those ambitions have been impacted by a lack of good career advice.

That leads to frustration and, eventually, departure. To hang onto those employers, MIT Sloan researchers said the most effective technique is to not just provide substantive feedback, but to help workers both prepare for and find internal opportunities to advance.

“It’s convenient for senior executives who make decisions on HR policies and investments to delegate employee development to line managers or to spin a lack of organizational support as empowering employees to own their professional growth paths,” write George Westerman and Abbie Lundberg, the study’s authors. “Yet neither course is a very effective solution to a problem that requires a more systematic approach.”

The good news is, creating that approach isn’t too challenging.

First, say the authors, companies need to make the pathways to new opportunities more visible to employees. When positions open up or are created, there’s often a focus by companies to look externally. Instead, MIT Sloan argues, the initial search should be done internally.

This can be accomplished with detailed interoffice job postings that include suggestions on how to overcome any skills gaps, such as training programs. Ultimately, hiring for a higher-level position from within not only retains employees, it cuts down on training costs for the company.

Continuing education is also a vital part of preparing employees for these opportunities. Teach new skills regularly and give workers the chance to practice them, long before they’re required as either part of a new position or as part of the evolution of their current one. That gives workers the chance to learn any nuances and make the inevitable mistakes that come with practicing new skills.

Hand in hand with this is ongoing, constructive feedback from current managers. At Fidelity, for instance, customer support reps are taught a new skill in the morning and then spend the day practicing it in live calls with customers. That’s monitored and reviewed by supervisors at the end of the day. Those managers also should coach workers on how best to reach aspirational goals.

Hiring from within not only helps a company fill a role with a trusted worker, but it can also be financially advantageous for that employee. Another MIT Sloan study found some workers made 6% more when they made an internal move versus going to a new company (That doesn’t take into account non-tangibles such as vacation time and personal days, either).

“The entire concept of work is evolving quickly,” a pilot study from the World Economic Forum found earlier this year. “And the upheaval brought on by the COVID-19 pandemic further crystalized an urgent and complex global employment challenge: how to prepare people for the future of work in ways that serve individuals, businesses and communities.”

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Jobs & Unemployment Careers