Leaders, how are you retaining talent?

Leaders, listen up — career development matters to your employees. 

All too often, executive-level leadership delegates career development to departments (i.e., human resources) that do not have direct, day-to-day interactions with employees. When career development is not woven throughout an organization — starting from senior leaders, trickling down to managers — it can adversely impact employee retention.

How Career Development Affects Employee Retention

In a survey of more than 1,000 workers, the MIT Sloan Management Review found several illuminating statistics that point toward the need for more career development in the workplace.

First, of the individual employees who were surveyed, 49% feel that a lack of good career advice has harmed their career, while only 35% of the executives and managers who responded felt this way.

Further, over two-thirds (67%) of respondents say advancing their careers is very important, and 25% feel as though they will find better career development opportunities working for a different employer. 

In addition to these findings, a Pew Research survey reported that, of the people who changed jobs in 2021, 63% indicated a lack of advancement opportunities as a reason, only second to insufficient pay. Meanwhile, a 2022 McKinsey study revealed that a lack of career development and advancement was the most common reason for quitting one’s job.

It’s no secret that employee turnover is costly. According to a 2017 report in Employee Benefit News, employee turnover can cost employers 33% of an employee’s annual salary. These numbers are the result of various expenses, including compensation for recruiters, job advertisements, interview costs, and onboarding resources. 

Besides the tangible cost, a high turnover rate reflects poorly on an organization’s culture and can damage its image to both prospective employees and consumers. 

So how can leaders step up to better look after their employees’ long-term careers?

A Systematic Approach

As with most organizational challenges, a systematic approach is necessary for real change. This would involve:

• Making opportunities visible: Many employers advertise career development as one of their assets but only look after the career development of those they consider “high-potential” employees. This allows bias to play a role in deciding who does and does not get ahead. When considering internal mobility, HR should make new opportunities visible to all employees, not just the few hand-selected by leadership based on subjective criteria.
• Specifying what skills are transferable: All employees should have a clear understanding of what skills are desired for positions they may want to pursue. For example, if HR advertises an opportunity for internal mobility, it should include a description of skills that can either be transferred or learned. 
• Creating clear pathways for skill-building: If all someone sees when presented with a job posting is skills they do not possess, they may feel discouraged, which may even cause them to doubt their ability to build a successful career altogether. But leaders can empower employees by providing resources to help them build the necessary skills, either internally or through external sources like Gallup.

A Personal Approach

In addition to a systematic approach, individual leaders and managers can nurture career development by:

• Establishing a culture of transparency: Many employees fear discussing career opportunities that may exist outside of their current organization. Quell this stigma by fostering trust. You might even initiate this conversation with your reports, expressing interest in their growth by demonstrating a willingness to discuss their career trajectories both inside and outside the organization.
• Discussing goals with employees: Strong leaders check in with employees not just to manage tasks and projects but to establish relationships. Consider using one-on-one meetings to discuss the long-term career goals of each employee and brainstorm a path toward achieving these goals.
• Creating a feedback and coaching culture: Giving and requesting, clear feedback is an essential component of great leadership. On the giving side, it ensures that employees are clear on work expectations and can help develop their skills over the long term. On the receiving side, it can inform leaders of perceptions held by their stakeholders that they may not be aware of–for example, the extent to which the leader focuses on employee career development. 

When employees feel that leaders are invested in their career development, they are more likely to be engaged in their work and feel satisfied with their employer. While you may not have the power to make a systematic change in your organization, you can use these tips to foster a generative, long-lasting relationship with members of your team.