Two of the most common reasons that employees leave organizations are a perceived lack of promotion opportunities and a lack of career path information. Employees look to their manager and HR representative to provide them with ample opportunities to learn new skills as well as help them identify new career opportunities and position themselves for their next step. When employees feel like they aren’t getting the desired support in their current organization, they may look to an external opportunity - even if it is a horizontal move - in order to find the employee experience they desire.
Despite the growing investment from companies in employee training, employees are consistently indicating that it’s not enough, and in fact, they’re willing to quit over it. So how are organizations missing the mark? And is it worth it for organizations to invest more money to address the challenge?
From a business perspective, enabling personal development for employees isn’t just the right thing to do, it’s the financially responsible thing to do. Various analyses have estimated the cost of attrition to be anywhere from 30% (entry level roles) to 400% (senior level roles) of the departing employee’s salary. I particularly like the analysis recommended by the Society for Human Resource Management (SHRM) to calculate the cost of attrition role by role. For example, their sample analysis put the cost of attrition for nurses at $41,000 relative to an average salary of $75,000, or 55% of salary.
When you layer in attrition rates, the costs add up quickly. Here is an example using cost estimates at the conservative end of the spectrum:
And for the purposes of this example, we’ll use the low end of the range to estimate the cost of attrition at 30% of the departing employee’s salary.
Using these figures, we can estimate that the current cost of attrition for a 5,000 person organization is $8.47M annually. Using the nursing data from above (plus the Healthcare voluntary attrition rate of 15.3%), the annual cost of attrition of nurses in a 1,000 person organization would be $6.3M annually. Whatever your industry, I think it’s safe to say that attrition is expensive for organizations.
Now that we’ve established that it makes good business sense to address the perceived lack of opportunities for employees, let’s examine some ways to tackle the issue. In exploring this topic with our customers, some consistent themes became apparent.
- Lack of skills data: organizations don’t have an up-to-date and comprehensive record of an employee’s training and experience to identify possible opportunities and measure their ongoing commitment to personal development. Without this information, it is difficult to guide the ongoing conversation between manager and employees regarding development plans and career options.
- Lack of visibility into career path options: employees and their managers don’t always know what career options are available to them given their experience and interests.
- Lack of a development plan: if an employee is able to identify an interesting future role, they don’t know which steps to take to prepare for the role.
It’s important to note that all of these issues limit the manager’s and HR partner’s ability to provide personalized and effective guidance to the employee as well. Simply put, these issues create challenges for everyone, not just the employee.
One way to address the first issue, lack of skills data, is to develop a comprehensive experience profile for each employee. The experience profile could capture and present information such as the amount of the time the employee invests in personal development, what types of learning activity they have engaged in, the skills they are currently proficient in, and the skills they are working to develop. At Yet, we also like to incorporate the concept of skills atrophy in the experience profile, which indicates if mastery in a skill has decayed if it goes unused for some time.
The experience profile for each employee is continually updated as the employee engages in training and learning activities to develop new skills or sharpen existing skills. Access to a comprehensive and up-to-date experience profile empowers the employee to better understand their own skills profile and development opportunities while also providing managers with the data needed to track an employee’s progress and training.
Now for the second challenge, lack of visibility into career path options. One simple way to address this challenge is to develop career paths (representing vertical and horizontal opportunities) and career ladders (representing vertical opportunities) models for your organization. Career ladder information can often be found, with varying degrees of granularity, in the organizational hierarchy established for your company. Career ladders provide the logical “next vertical step” for each role in the organization, with each next step signifying an increase in responsibility and span of control.
Career paths provide common “next steps” for a role, which may include an increase in responsibility and scope, or may represent a horizontal move that enables the employee to learn new skill sets and take on different responsibilities. Career path information can often be uncovered through employee and manager surveys to understand what paths your current employees have successfully navigated.
And importantly, the final step is to make your career ladder and career path models available to employees as an empowerment tool and to managers as a coaching guide.
This brings us to our final challenge, lack of development planning. In other words, once the employee has identified potential next steps in their career, how do they prepare for the new role in a demonstrable way? The last bit of information needed to address this challenge is to understand the set of skills and/or competencies that are critical to success in each role within the organization. Once you have this skills matrix in place, all the pieces fall together to create a powerful and empowered experience for your employees.
In the segment below I’ve included some examples of how organizations can surface employee experience profiles and create personalized development plans in order to address career pathing challenges that lead to costly attrition rates.
Our first example is of a Role Readiness dashboard, which provides the employee with a personalized development plan to help them achieve success in their current role. Using this dashboard, our new hire in the organization, Katja, is able to both complete the curriculum assigned to all new hires as well as develop the custom set of skills directly associated with her current role as a Customer Service Representative.
The data card on the top right surfaces Katja’s recent training performance, including arrows that indicate how she is performing relative to her peers (green means above average, orange means below average). The data card on the bottom left shows Katja’s progress toward the general training required by her company. In this case, we’re showing the onboarding curriculum for a new hire, but this could easily surface a list of annual required training for existing employees. Green checks mean the training is complete, orange boxes mean training is in-progress, and grey boxes mean the training has not been started.
Lastly, the data card on the right, “Role Readiness”, shows Katja’s development in her current role. For example, there are five courses offered to help Katja develop the Problem Solving skill. Katja can easily see the learning opportunities made available to her and can track her own progress. This kind of data is also useful to Katja’s manager as well.
Helping employees to achieve success in their current role is a critical first step in demonstrating the organization’s overall commitment to employee development and ultimately, to their progression within the organization.
Now let’s take a look at how we can empower employees to develop skills for a new role, which helps the organization demonstrate their commitment to ongoing career development. In the Career Pathing dashboard below, we can see the work that Carl, currently a Customer Service Representative, is doing to prepare himself for a Sales Associate role. The data card on the top right surfaces Carl’s current experience profile, including the skills he has developed in his current role (“On the Job”) as well as the skills he has developed on his own (“Developed”). We’ve also included skills atrophy indicators in this view, where green means the skill is up to date and currently being used, orange indicates that Carl has not trained on the skill in 6-12 months, and grey means that the skill is out of date and needs refreshing.
The bottom left data card surfaces the skills gaps between Carl’s current role and his desired next role, Sales Associate. The skills with green check marks (“Current Skills Match”) are skills associated with the Sales Associate role that Carl has already achieved proficiency in. The skills listed under “Skills Gaps” are skills that Carl will need to develop in order to prepare for the Sales Associate role.
The Skills Gaps lead us to the bottom right data card, “New Role Readiness.” This data card surfaces the skills that Carl needs to develop along with the learning content that will help him develop those skills. For example, there are three courses listed under the skill, Business Acumen. Carl can easily see which courses to take and can monitor is progress and performance all within this view. Likewise, Carl’s manager can also monitor his progress and assist in his efforts to prepare for the next role.
It’s important to note that an employee’s experience profile can be augmented over time with additional data sets such as 360 assessment ratings, performance data and other sources that round out how an organization and employee can measure skills mastery.
The dashboards shown above are just a couple examples of how Yet Analytics can help organizations create an empowered and data-driven experience for all employees through visibility into role readiness and career pathing. By addressing the perceived lack of promotion opportunities and career path information, organizations can increase retention rates, reduce the cost of attrition, and successfully develop talent within their own workforce.
The team at Yet would love to help achieve similar results. We can advise you on how to collect data from across your learning ecosystem to develop an employee experience profile and can help connect that data to your organizational hierarchy and skills matrix to build out a role readiness and career pathing experience best suited to your (and your employees!) needs.
Interested in starting a conversation on using learning data to empower your employees and improve retention?