The career ladder has been cast aside and promotions no longer automatically mean pay rises: a US survey recently found that 39 percent of employers commonly award promotions without salary increases, up from 22 percent in 2011.
We asked employees for their opinion: if you had to choose, which would you prefer - pay rise or promotion? The question divided respondents: 45 percent preferred a promotion with no raise, while 55 percent went for the raise with no promotion.
This result is perhaps not surprising. We know that both reward and recognition (including the most public form of recognition - promotion) are critical aspects of an organisation’s employee value proposition. But as the relationship between these two career pillars changes, how can business leaders keep employees engaged when the old rules have been thrown out the window?
Choose your own career path
As the way we work has changed, the way careers progress has changed as well. Careers now tend to be shaped around gathering experiences, perhaps through project roles and lateral moves, rather than a relentless push onwards and upwards.
The thing about the old career ladder? It was easy to understand. It made everything seem very neat and tidy, if a bit inflexible. In its absence, leaders must help employees navigate and own their individual career path. For employees, it offers the opportunity to craft a career path based on individual strengths and passions, rather than slotting into a predetermined track.
It sounds universally positive, but it also introduces more uncertainty. Making it work requires reward and recognition processes that are flexible enough to serve the needs of both the business and individual, as well as leaders who can bring them to life effectively.
Unfortunately, according to our survey, many organisations aren’t getting it right. Nearly two-thirds (61 percent) of respondents who didn’t get a promotion within the last 12 months cited “bottleneck or nowhere to go” as the main reason. Leaders will need to do a better job of creating clear advancement options or risk employees becoming disengaged. This is particularly the case for high potential employees who will quickly become frustrated by any perceived or actual lack of advancement opportunities.
To help employees identify new development opportunities, organisations need to make more and better use of all the data they now have at their fingertips. We see holistic talent management - supported by data from hire to retire - as a key emerging trend for 2019.
Organisations are now looking to take a more foundational, data-centric approach to development that creates actionable insights from an organisational, team and individual perspective. This foundation is informed by data from all touch points in the talent lifecycle, from acquisition, assessment, development, organisational structure and compensation functions. Taking a holistic view allows for a calibrated approach to talent that’s tightly linked to business outcomes.
Many organisations are still battling with the amount of data they now have - hence this trend is still emerging. Organisations that face into the challenge and make it work for the business and their individual employees will be best positioned to gain the competitive advantage that’s currently on the table.
Making data work
- Identify future talent and future leaders early - data collected in the talent acquisition process should immediately be put to work not just to identify candidates but to understand what their first weeks, months and year should look like.
- Create a truly holistic view of talent - data’s real value is only realised when used throughout the talent lifecycle. Forward-thinking businesses are already feeding acquisition and performance data into workforce planning as the talent crunch looms.