Career Development Research Summary. Exploring the career development landscape in 2014, after one of the deepest recessions in recent history

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1 Career Development Research Summary Exploring the career development landscape in 2014, after one of the deepest recessions in recent history

2 Introduction Every company wants engaged, motivated, proactive employees. It s no mystery, higher engagement leads to increased productivity, resulting in better performance for your company. It s a simple equation and getting it right will have a significant impact on your organisation and the bottom line. There are thousands of books, white papers, blogs and social media commentators presenting different approaches and evidence that supports various theories on how to increase employee engagement in organisations. The challenge is identifying where investment should be placed in order to best engage employees. It is unlikely that any one approach will be an engagement panacea for your business, as a hundred organisations will require a hundred different combinations of activities and actions to increase engagement levels, depending on their specific situation. Instead organisations should seek to understand what their people need now, and in the future, in their unique business context and take action in those areas. There is, however, a significant quantity of research which shows Career Development has a key role to play in employee engagement, helping to not only retain but also attract employees by showing them how they can develop their careers within organisations as opposed to having to look externally. Knowing the positive impact a robust and innovative approach to career development can have on engagement, we undertook our own research to better understand how organisations are approaching career development. The findings are outlined in this report and paint a picture that suggests a lack of structure around careers, succession planning and personal development is set to cause organisations the biggest talent headache this year. The findings outlined in this report paint a picture that suggests a lack of structure around careers, succession planning and personal development is set to cause organisations the biggest talent headache this year. 42% of organisations predicted an increase in learning budgets over the next 12 months No formal approach to career development Our research revealed that as the economy recovers, 42% of organisations predicted an increase in learning budgets over the next 12 months, yet almost two thirds of those surveyed indicated that their organisation did not have a formal approach to succession planning. Perhaps unsurprisingly, organisations with over 10,000 employees appear to have a more formalised approach to succession planning, yet over half still believed approaches to career development were less structured. Given that talented employees are attracted and retained through personal development opportunities, it is positive to see that organisations are making investments in this area. However, the current lack of a formalised approach may result in wasted spend and limited impact, making it potentially more difficult to secure future investment. Succession Planning Almost two thirds of those surveyed indicated that their organisation did not have a formal approach to succession planning 2

3 Lack of development opportunities top reason for leaving According to our findings, one third (33%) of those surveyed experienced an increase in resignations last year, with perceived lack of opportunity being cited as one of the main reasons (55%) for individuals leaving. With the UK and global economy showing continued signs of improvement, 2014 has been positioned as the year of the exodus. Employees who have sat tight over recent years, reluctant to explore new opportunities during the recession are now more confident about the skills they have to offer and are beginning to explore new opportunities. Conversations with the HR community reveals an element of surprise when lack of opportunity is cited as a reason for leaving at exit interviews, with many saying that opportunities do exist within their organisations, but that employees are unaware of them. This clearly supports the need for a more structured approach to career development, one that equips employees with the tools they need to plan their careers, and encourages them to explore internal options, while also ensuring that managers are not just aware of opportunities, but also know how to and do hold conversations with their employees around future opportunities. One third of those surveyed experienced an increase in resignations last year Organisations are not doing enough to support employees Two thirds of those who responded to our survey were not confident that employees knew how to plan or develop their careers within the organisation. More alarming perhaps is that less than 10% felt that their employees were actively doing this, and that only 15% of organisations believed that employees career objectives were aligned to organisational objectives. With this level of perceived or actual passivity amongst employees, organisations need to consider the impact this is having on results, for example, how engaged are employees with the organisation? or is there an element of presenteeism? We know that traditional linear or vertical career paths are being replaced by a more complex matrix structure where next moves are less obvious. We also know that the last 5 years have been tough on the UK workforce, with many experiencing involuntary changes to their roles and organisations on a regular basis. Only 7% of respondents felt that their employees were actively managing their careers As such, from an organisation s perspective, employees need more support to understand what the changes may mean for them in terms of development, as well as support to navigate and plot their career within their current company. From an employee s perspective, a flatter matrix structure means that actively managing your career becomes even more important; with potentially fewer opportunities for upward career progression, understanding how to navigate in other directions within the organisation and still experience the growth you want is vital. 3

4 Defining clear goals and responsibilities will help to avoid ambiguity, ensure clear performance objectives are set, and result in higher engagement levels as individuals are able to achieve their goals. What s more, it will also help employees to understand their skills better and how these fit in with the current and future needs of the business. By consequence, they will have more clarity on where their next move may come from, or what they may need to develop to enable it to happen. This emphasises an important point, that ownership of careers and career development has to sit with the employee and be supported by the manager and organisation. However, based on the findings of our research, it would appear that organisations are perhaps paying lip service to this. Although it is positive to see that many organisations have implemented e-learning tools that allow individuals to self-serve with their development and intend to continue investing in learning in the future, there is a stark contrast when it comes to career conversations between managers and employees. Defining clear goals and responsibilities helps to avoid ambiguity, ensure clear performance objectives are set, resulting in higher engagement levels. The enablers of career activism According to the research career conversations are happening, albeit not as frequently as they should, with only 17.5% of managers holding them on a regular basis and a quarter (25%) of companies admitting that managers are not trained in holding effective career conversations. When you consider the earlier statistic that a perceived lack of career development is the main reason people leave, it reinforces the notion that people want development, yet almost two thirds of organisations admit that employees are not proactively managing their own career development (they need help with it). This makes the statistic around career conversations highlighted above a very stark one. If more managers were having career development conversations with their teams, what impact might it have on retention figures particularly those leaving because of a lack of development? If more frequent career conversations helped an additional 1% of colleagues to redeploy would it be worth the investment? Only 17.5% of managers are helping employees with development conversations If more frequent career conversations helped an additional 1% of colleagues to redeploy would it be worth the investment? 4

5 What can companies do? Career development is a key component of attraction and retention strategies, yet our research reveals that the failure to give career development the focus and structure it deserves may actually be hampering companies ability to not only attract new talent, but more importantly to retain the talent they have fought so hard to hold on to. This is further evidenced by the gap that seems to exist between an employee s perception of development opportunities that exist within their companies and reality. Line managers are the lynchpins of engagement, yet many do not appear to be holding regular conversations with their employees around their careers. Employees have to own their careers, with the organisation and managers providing the support and tools to enable them to do so. Yet our research suggests that more could be done with the line manager population to enable this to happen. Line managers are the lynchpins of engagement, yet many do not appear to be holding regular conversations with their employees around their careers. Whether this is due to lack of clarity from the organisation on how frequently these should be taking place, or due to a lack of know-how, structured conversations are one of the most effective ways to engage and unlock talent. The research Keen to explore the career development landscape in 2014, post one of the deepest recessions in recent history, Penna conducted research to understand what organisations were doing around Career Development. The findings are based on the results of a survey responded to by 100 HR Managers and Directors in February/March HR Managers and Directors About Penna Penna is a global HR Services Group. Through effective services and unrivalled expertise, we help organisations improve their performance through their people. Our expertise spans the entire employment lifecycle from attraction and communications, managed recruitment and assessment, executive search, executive interim and assessment to coaching, learning and development, career development, redeployment and outplacement. Penna Plc 3rd Floor, 5 Fleet Place, London EC4M 7RD T: E: W: 5

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