The Future Leaders of Your Company are Already Working for You
Maintaining a strong and clearly defined pathway for employee advancement can play a key role in securing the future of your company.
What's at stake?
Preparing internal candidates for leadership positions in your company is a lower-cost, high-efficiency, and high-value move.
By the Numbers
18% premium on salary for external candidates for leadership roles compared to internal promotes
2 years longer for external hires to get up-to-speed on organizational expectations compared to internal candidates
3.8x higher success rate among internal promotes than external hires in senior positions
Despite these numbers, large companies are failing to retain their top talent. Research from Willis Towers Watson shows that almost 50% of high potential employees leave their organizations to further their careers when they fail to see development opportunities internally.
Given the value of homegrown leaders and the flight risk of your top talent instigated by employee perceptions of what it takes to advance, it's important for organization to demonstrate that staying offers employees growth opportunities.
People analytics can help
Credit Suisse used people analytics to inform their "Grow Your Own" talent strategy. The bank identified the key factors that weighed into why a top-performer would leave and performed logistic regression analysis on that data to predict an individual's likelihood of leaving and to provide insight into related risk factors.
The findings from the analysis have contributed to the firm building out a formal program for internal advancement. This includes the creation of new training programs, the addition of a dedicated internal recruiting task force, and the use of metrics to measure outcomes on internal upward mobility.
A platform like Twine can help your organization identify skill and experience gaps between what your current talent pool has to offer and what the organization is looking for. This can serve as a starting point to create internal training programs to help employees get the skills they need to move up.
How can you make your organization more attractive for advancement opportunities?
Analyze the factors contributing to attrition in your organization and take these into account in your employee development and retention strategy. The reasons why employees leave vary from company to company. People analytics software can streamline the process of gathering and synthesizing information on attitudes and attributes that offer insight into the likelihood of a looming departure.
Increase transparency on advancement criteria and opportunities. Employees value fairness and transparency within their organization, especially when it comes to advancement. Having clear criteria in place helps set employee expectations on their next steps and keeps them from looking elsewhere to measure up on salary and job responsibilities. After Credit Suisse launched a clearer pathway to advancement through “Grow Your Own,” internal candidates filled 65% of senior roles compared to 40% three years prior. Consider creating a reference for employees to gauge themselves against the desired competencies needed for a promotion and an idea of what a commensurate pay increase may look like.
Integrate classroom and e-learning training programs with on-the-job learning to allow for active application of new knowledge. Companies with formal training and educational opportunities shouldn't let the learning stop in the classroom. The perception of low-relevance between formal training and job responsibilities can be a barrier to learning. Bridge the gap by making specific work experiences part of the training curriculum.
Provide a means for employees and managers to measure an employee’s acquisition of skills and provide insight into how that relates to advancement potential. Engage managers and key cross-functional collaborators to share in accountability and monitoring of an employee's development by implementing for groups to share feedback, such as your firm's performance management tool. GE has seen improvements in employee performance with its PD@GE (Performance Development at GE) app that allows team members to give feedback in real-time.