The last few years have been tough for employees. Pay rises have been firmly off the agenda, but the cost of living – including getting into work – has continued to increase. For a long time during the downturn most staff were happy just to have a job and keep their heads down but now, against the backdrop of an improving economy and recovering jobs market, many are starting to reassess just where they are, and how they want their career to develop in the future.

Already there is evidence that employers are struggling to both attract and retain key talent. According to the 2012-2013 Talent Management and Rewards Survey, produced by Towers Watson, 72% are finding it hard to hire critical-skill employees and 6 in 10 have a similar experience with both top-performing and high-potential individuals. Some 60% are also having difficulty retaining critical-skill staff, with a similar figure for top-performing and high-potential individuals.

The notion of career management – enabling employees to feel there is a clearly defined career available to them in the organisation, along a number of possible routes – will play a crucial role in helping to retain people in the coming years. The Towers Watson Global Workforce Study 2012 saw career advancement opportunities rank second as a key driver for retaining staff – behind only base pay and salary – and third in the list of what attracts individuals in the first place. Increasingly, employees want – and expect – to know not only what the immediate future holds but what they can look forward to further down the line.

For many organisations, this requires a change in thinking. After decades of a paternalistic approach, where employees had a clearly mapped out career path based largely on moving into more senior roles with greater managerial responsibility, most businesses had moved towards a much more laissez-faire style, with the emphasis firmly on the individual to carve out his or her own destiny. This thinking was best summarised in Sir Dominic Cadbury’s famous quote: “There is no such thing as a career path; it’s crazy paving and you have to lay it yourself.”

What is required now is a middle ground between these two extremes, where individuals still take responsibility for determining where they want to go but HR – and line managers – play a much more active role in explaining both what those options are, and how they can get there.

The map, and the journey

The starting point for any career management initiative should be for organisations to understand their future requirements in terms of skills, and identify any gaps in its capabilities. From that base, a clear hierarchy of roles can be created across disciplines and levels, allowing employers to determine the relative value of jobs in their organisation and structure them effectively from a reward and bonus perspective, including clustering grades into broader bands.

From an employee viewpoint, it provides clarity over all the possible roles they could move into and how they can get there, identifying any necessary skills or training gaps that may need to be filled: something that is often missing in many organisations currently.

This pathway, however, also needs to take into account the changing nature of both the workforce and the skills required by employers. Many businesses are now looking to develop more experts who specialise in a certain area, as well as the traditional emphasis on finding future managers, leaders and CEOs. Providing clear routes for those who wish to become deep sector-specialists – and demonstrating where these sit in the wider organisational framework in terms of hierarchy and pay – will be important here.

Identifying just which skills the business is likely  to require going forward can provide clarity as to where any gaps – both in job role and particular attributes such as agile thinking or communication skills – are likely to be. This is particularly relevant for organisations going through a period of change; according to the Towers Watson Global Talent 2021 Survey, 41% of businesses have recently completed a significant transformation initiative or are currently undergoing one, with a further 47% preparing to do so.

In some industries, such as financial services and heavy manufacturing, more than 90% are planning to undertake such initiatives.

Falling into line

To be able to implement such a strategy in practice, the support and involvement of line managers is essential. For many organisations this requires a shift in thinking from HR, moving away from blaming managers for failing to effectively develop staff and towards a fundamental reappraisal of their role, where employee development is a core criterion in line managers’ own reward and measurement process, rather than focusing only on the delivery of results.

HR also needs to look at the administrative burden it places on line managers, ensuring they have the time and resources to devote to this vital part of their job, and are able to become honest brokers in discussions around career development and any training that may be required to help individuals fulfil their ambitions. The role of the line manager needs to be fundamentally redefined so they can support employees at every step of their career, and it’s up to HR to make this happen.

The Talent Management and Rewards Survey demonstrates just how significant line managers are in this: organisations that excel at attracting and retaining staff and boast high levels of employee engagement are three times more likely to have managers that give staff regular coaching and feedback on their performance, as well as conducting career development discussions as part of the performance process and using performance results to determine development plans.

Employee value proposition

Implementing an effective career management strategy also requires organisations to ensure they have an effective employee value proposition, so the overall employee deal stands up to scrutiny among an increasingly confident and choosy workforce.

The two are inextricably linked; according to the Talent Management and Rewards Survey, those companies with highly effective employee value propositions are more than twice as likely to have an articulated career management philosophy in place, and to have developed specific tools and resources to help individuals manage their career. Such organisations are also significantly more likely to feel employees understand how they can influence their careers and progress by moving across organisational boundaries, geographies, functions and business units. Overall, companies with highly effective employee value propositions report having more than three times as many highly engaged employees as at those with low levels.

Facing the future

Moving to manage the career paths of employees brings notable benefits for employees, HR, line managers and, ultimately, the wider organisation. Employees should realise they are able to achieve their goals within existing organisations, even if these do not conform to what have been traditional norms around career progression, helping them  set their sights on specific targets and giving them a clear route to being able to achieve these, and with that their own financial prospects.

HR, meanwhile, will gain through being able to cement its role as a strategic player in the business and able to demonstrate the value it can deliver. According to the Global Talent 2021 study, some 55% of firms already measure the return on investment for talent management initiatives, and this is set to increase to 63% in three years’ time. Managers, too, should benefit by improving their own skills around developing the careers of reports, and have more time to do so.

From an organisational perspective, those able to align competencies with job levels are 66% more likely to report a high-performance culture and 43% more likely to highlight communicating expectations for organisational performance as a strength, according to the Talent Management and Rewards Survey. Even more significantly, by outlining just what potential exists in the organisation such businesses will be better able to identify any skills gaps and attract, retain, engage and motivate top talent, just at the time when they need them the most. It is not an easy journey, but one that can stand both employers and employees in good stead for the future.