How companies are using career path development to retain employees
When we think about employee benefits, it’s easy to go straight to common ones like health insurance, paid time off, and other ancillary offerings. Today I’d like to look at another benefit to offer employees that can actually save your organization in terms of lost productivity, reduced turnover, and increased employee engagement. So, what is it? Career paths.
Think about it, when employees leave your organization they take knowledge, productive time, and other valuable resources with them. The more we can help them to stay, the better our companies will perform.
U.S. Security Associates promotes from within
Let’s look at an example of how career path development plays out from a recent U.S. Security Associates case study we published in our member center (emphasis mine below):
For example, one employee who started as a uniformed officer was recently promoted to Vice President. This employee began his security career 20 years ago and has risen through the ranks from Training Manager to Operations Manager, Branch Manager, District Manager and Vice President of National Accounts.
Over the years, he has provided oversight of up to 40,000 hours per week of site operations and has become a trusted resource for the biggest names in one of the major market sectors, based on his expertise in the complex issues and evolving regulations impacting his clients. He is now Vice President of a newly formed division of the company, catering to those clients with the roll-out of a benchmark new program.
Many senior managers have worked in the organization as branch and/or operations managers. It is a key aspect of the culture to promote these trusted positions from within, and as a result, the average tenure of senior level managers is 10+ years in position.
I think it’s incredibly powerful to see that the senior leadership is pulled from the ranks of the employee base over time. If you’ve ever worked for someone that has actually performed your job at some point in their career, you understand how powerful that can be from an employee perspective. Now think about it from the other end—that manager has practical experience in handling the issues of a front line employee and therefore can better interact with customers and staff at all levels due to that level of understanding.
By the way, my colleague Laci Loew is currently working on some new succession management data, and we’ll be hosting a webinar in a few weeks to look at some of the research. We’d love to have you join us to learn more about the survey findings.
In the meantime, I want to offer some thoughts on organizations I have connected with in the past that put career path development into their talent management strategies.
Bechtel’s career path development strategy
One of my good friends used to work closely with a company called Bechtel. They are known in the defense contractor community for finding A players internally and moving them around every 2-3 years as a development strategy. This keeps the people engaged and knowledgeable about multiple areas of the business and it helps the leadership know that they are filling internal positions with high quality performers.
One of Bechtel’s biggest draws for candidates is the opportunity to grow professionally and to have exciting assignments in different areas of the country (or the world, if they choose to go international). They use the idea of a varied career path as a retention tool, and they do it well.
Chipotle’s manager retention efforts
Several years ago I heard the training director for Chipotle restaurants speak about manager turnover. The company had been facing some difficult issues with their store managers, and turnover was around 52% for that particular position. However, when the company started promoting from within instead of looking for talent outside the organization, turnover for salaried managers dropped to 35%, and turnover for hourly managers dropped a whopping 64% (111% down to 47%).
Additionally, as an incentive for managers within the organization to train the next generation of leaders, Chipotle offered people development bonuses of $10,000 for managers who brought someone up into a managerial position from within the ranks of the staff. When asked by the audience how often the bonuses were paid out, he replied that Chipotle paid out over $1 million in people development bonuses in 2010.
Keeping your best people
If you work in a large organization, it is in your best interest to identify the solid performers and do what you can to keep them on board. If it means coaching, developing, or transferring them to another job that they want to do, then try to make that opportunity available. Moving a talented performer around via a career path development plan might cause some extra administrative work, but if the alternative is them leaving the organization for another employer, then it’s certainly the better option on the table.
- Does your organization do a good job of creating and highlighting employee career path development options?
- How could you follow the example of companies like U.S. Security Associates, Bechtel, Chipotle, and others to improve your employee retention?
- Are you comfortable enough with your current practices to frame these practices as a benefit to employees? Why or why not?