Connecting The Dots: Driving Engagement Through Career Development

2011
HCI
Research
Connecting the Dots:

Comprehensive Career Development as a Catalyst for Employee Engagement
In partnership with:
July 2011
ConnectingtheDots:ComprehensiveCareerDevelopmentasaCatalystforEmployeeEngagement
Table of Contents
Executive Summary. ................................................................................................. 1 About this Research................................................................................................. 3
Definition of Key Terms. .................................................................................................................3
Introduction. ............................................................................................................. 4 Current Talent Environment. .................................................................................... 5 Conventional Wisdom: Engagement & Organizational Impact. .................................... 6 Examining Engagement Through a Fresh Lens: TPOs & PPOs. .............................. 7 Drivers of Employee Engagement.......................................................................... 9 Key Survey Findings: Differentiating TPOs from PPOs. ........................................ 12
Assessing Employee Engagement. ..............................................................................................12 Defining Career Development.....................................................................................................13 Determining Roles & Responsibilities Related to Ownership.....................................................15 Structuring Career Development Strategies and Programs.......................................................17 Leveraging Multi-Directional Career Movement.........................................................................20
Key Barriers . ......................................................................................................... 25 Conclusion. ............................................................................................................. 26 Appendix A: About the Research Partners........................................................... 28
About the Authors.......................................................................................................................29
Appendix B: Respondent Demographics.............................................................. 30 Appendix C: Works Cited...................................................................................... 32
Copyright 2011 Human Capital Institute. All rights reserved.
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Connecting the Dots:

Comprehensive Career Development as a Catalyst for Employee Engagement
Executive Summary
The Human Capital Institute (HCI) and Lee Hecht Harrison (LHH) partnered to develop an original research report examining the relationship between career development strategies and employee engagement in the current economic environment and talent landscape. This research builds on the body of work centered on the impact that employee engagement can have on talent retention, organizational productivity and overall performance. Specifically, this report uncovers true levers that affect employee engagement in the modern organization namely career development and planning. Todays organizations look different than they did five years ago traditional hierarchies dont exist as they once did, and firms have gone through a flattening process in an effort to contain costs and streamline processes. This has had a dramatic effect on the way that todays worker relates to his/her organization, understands his/her role in that organization, and plans his/her career within the organization. In addition, with signs of economic recovery on the immediate horizon, organizations are becoming acutely aware that their top talent is beginning to look elsewhere for career opportunities that will satisfy their needs for career growth, development and advancement. Employment opportunities that simply did not exist only a few short years ago are becoming increasingly available. Organizations that are committed to talent retention must consider the risk that this economic shift poses, and adapt specific human capital strategies that will have the greatest impact on engagement and, eventually, retention. This report describes the important impact that these economic changes have had on the talent landscape and provides recommendations for organizations to implement in order to enhance career development and therefore, ultimately increase employee engagement and retention.
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A 36-item survey exploring the post-recession talent landscape, employee engagement drivers, and career development programs was developed and distributed to more than 10,000 HCI members to produce the foundational knowledge for this research. More than 440 responses were received from organizations around the world and the data reveals a unique split between types of organizations that have engaged employees and satisfactory retention rates (Top Performing Organizations TPOs) versus those that do not (Poor Performing Organizations PPOs). Key research findings uncovered the distinct difference between the way that these two types of organizations handle and manage certain elements of their human capital initiatives and programs, namely the way they: Assess employee engagement Define career development D etermine roles and responsibilities related to ownership of career development Structure the career development strategy L everage multi-directional career movement (versus strictly vertical movement) as a core career development strategy The data also revealed real challenges faced by organizations to adopt comprehensive, best-practice career development programs at their organizations. This report presents actionable recommendations for overcoming these obstacles by incorporating some of the strongest differentiators that TPOs embody.
About This Research

The following research report was developed in partnership between the Human Capital Institute (HCI) and Lee Hecht Harrison (LHH) between May and June of 2011. A survey of 36 items was distributed to approximately 10,000 HCI members. Four hundred and forty-six surveys were received. The results of the survey form the basis of this research and are summarized in this paper. In addition, several in-depth interviews were conducted with talent development and employee engagement thought leaders from top organizations. To supplement the primary research methods described above, HCI researchers also reviewed relevant information from a variety of secondary sources, including white papers, articles, books, interviews and case studies. Many of these are cited in the report and all are referenced in HCIs Talent Development & Leadership Practice Areas, to which interested readers are encouraged to visit for additional reading and online events.
Definition of Key Terms

Employee Engagement The extent to which people are satisfied with their work; have a positive attitude towards their employer; are committed to the organizations success; and feel valued for their work. Career Development The organization has a defined process to establish and manage long-term career plans for all employees that align employee strengths and interests with career goals and opportunities within the organization. As part of this process the organization provides skills development, coaching and mentoring to ensure employee career growth and goals are met. Career development is employee-driven, manager enabled and supported by the organization and its guiding talent management strategy. Top Performing Organizations (TPOs) For this research, Top Performing Organizations (TPOs) are defined as those respondent organizations that strongly agree or agree that their employees are engaged and that their business leaders are satisfied or somewhat satisfied with their retention rate. Poor Performing Organizations (PPOs) For this research, Poor Performing Organizations (PPOs) are defined as those respondent organizations that strongly disagree or disagree that their employees are engaged and that their business leaders are not satisfied with their retention rate.
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Introduction
For years, organizations have been concerned with employee engagement and retention, specifically as it relates to their top-tier talent. In response, human capital practitioners and business leaders have designed a whole host of engagement and retention strategies, processes, and programs in an effort to meet the needs of their organizations. Typical initiatives include recognition and reward programs, flexible work arrangements and work-life balance initiatives, enhanced benefits and compensation structures, and most recently, career development programs. The topic of employee engagement has received increased interest in recent years due to the Great Recession that began in late 2007. During that tumultuous time period, dramatic changes were made within organizations in order to reduce the workforce; streamline workflows; identify new efficiencies; contain costs related to compensation, benefits and training programs; and flatten the layers of management. In other words, those employees that did remain at their organizations, and weathered the storm, were expected to do more with less, often resulting in lower employee morale, motivation, and, ultimately, engagement. Today, in this post-recession environment, organizations are still struggling with employee engagement, only now they have the added risk of losing their key talent. While before, the core challenge related to the workforce and engagement centered on morale, motivation, productivity, and performance todays risks associated with engagement are even more acute, and could likely lead to key talent departures. With signs of economic recovery on the immediate horizon, employees are more aggressively looking for new career opportunities outside of their organizations that will satisfy their needs for better work-life balance, larger compensation packages, and more compelling growth, development, and advancement opportunities. Employment opportunities that simply did not exist only a few short years ago are now becoming increasingly abundant. Organizations that are committed to talent retention must consider the risk that this economic shift poses, and adapt specific human capital strategies that will have the greatest impact on engagement and, eventually, retention. Given the fragile state of the current economy, organizations are still focused on impacting employee engagement and retention by employing initiatives, tactics, and strategies that are cost-effective. The Human Capital Institute (HCI) and Lee Hecht Harrison (LHH) partnered to develop the following research to examine the state of employee engagement
and retention at this critical economic inflexion point. Specifically, this report sought to investigate the true drivers of employee engagement, and zeroed in on Career Development as a low-cost, effective driver that has the potential to really move the needle. The research revealed a unique split between two distinct types of respondent organizations those that have engaged employees and satisfactory retention rates (Top Performing Organizations TPOs), and those that do not (Poor Performing Organizations PPOs). Finally, the research provides a set of actionable recommendations for organizations to consider in order to transform their organization into a TPO, one that has engaged employees and satisfactory retention rates.
Current Talent Environment

The economic recession is coming to a close, and for many, that means the career moves that were on the backburner just a few short years ago have again taken center stage. Recent research has shown that key employees are currently eyeing new positions, primarily at competitive corporations, and our own research has bolstered this finding. More than half of this studys respondents (52%) stated that their organization reduced the size of their workforce within the past two years due to the recession, and those downsizing efforts did not come without cost. Among many organizations, existing employees have been shouldered with extra duties, and for many, there have not been any adjustments in pay or benefits. As the tide begins to turn toward a recovering labor market, more employees are quitting their current positions in lieu of bigger and brighter positions now available to them. A key indicator used to gauge opportunities within the labor market are the number of people discharged (layoffs and terminations) versus those who quit their job for other opportunities. Prior to the recession, the number of employees leaving their positions voluntarily consistently exceeded the number of employees discharged. During the recession however, this relationship was reversed as layoffs and discharges outnumbered quits. This recessionary period was characterized by many people who chose to remain in their current positions, hesitant to explore other opportunities because of the weak economy and poor job market growth. But, the job market appears to be changing in 2011. At the end of 2010, the number of employee quits exceeded the number of employees discharged and the gap continues to grow. This empirical evidence indicates that the labor market is entering a period of increased workforce transitions, and such transitions are saddled with more employees choosing to explore other career opportunities if they are not satisfied with their current job or its opportunities. 1
Bureau of Labor Statistics, Job Openings and Labor Turnover Survey Highlights April 2011 June 7, 2011
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Today, employees who remained with their organizations during the recession are now preparing to make the career moves. Indeed, nearly 3 in 4 (73%) of our survey respondents agreed that there are more opportunities now for their employees to find work outside their organization, compared to one year ago. Jack Katzanek, a thought leader in this space, observed in 2010, As the economy starts to pick up some energy, workers who have not had any new job opportunities for two years or longer might now be seeing light at the end of a long tunnel. But what seems encouraging to employees could cause a different kind of headache to their bosses. If a fresh crop of job prospects does come along, it could signal a round of departures by critical workers. Employees who were not laid off because of the recession were asked to do much more work with little or no financial reward. 2 Figure 1: To what extent do you agree or disagree: There are more opportunities for employees to find work outside your organization compared to one year ago?
NET AGREE Strongly agree Agree Disagree Strongly disagree Not sure 0% 6% 3% 20% 40% 60% 80% 18% 25% 48% 73%
As organizations are faced with this new talent environment, they must ask themselves what steps can be taken to minimize the local effect of this trend. And, as the relationship between employee engagement scores and organizational performance continues to grow, what can companies do to ensure that their employees are engaged in their work and the organization?
Conventional Wisdom: Employee Engagement & Organizational Impact

Employee engagement is a topic that has received a significant amount of attention in the last few years and most people in a business or human capital context have heard the term and understand it on a fundamental level. In general, engagement is about workers consistently distributing discretionary effort to help their organization achieve its production and performance goals.
Katzanek, Jack Companies may lose top talent as economy recovers December 25, 2010, Enterprise Media
For the purposes of this research, we have defined employee engagement as: the extent to which people enjoy and believe in what they do; are satisfied with their work and take pride in their employer; and they believe their employer values their contributions to the organization. This engagement definition is grounded in the fact that an employees work life and career achievements represent a significant portion of their personal identity and such achievements satisfy them on a profound level. If an employee views their position as something more than just work, and finds his or her role in the company professionally and personally fulfilling, research has shown that he or she is less likely to seek a new position elsewhere. Employee engagement can provide significant benefits to organizations, the foremost of which is an increase in employee retention rates and lower turnover. Previous research has demonstrated a clear relationship between higher employee retention rates and increased organizational performance and higher profitability. Studies have also illustrated that high-engagement firms had total shareholder return that was 19% higher than average in 2009. By contrast, in low-engagement organizations total shareholder return was 44% below average. In addition, Wharton Business Schools recent analysis of the Best Companies to Work for in America List concluded that high levels of employee satisfaction generate superior long-horizon returns. 3, 4 Despite the overwhelming evidence of the strength and impact employee engagement has on performance, a significant challenge for many organizations has historically been around how to find ways to derive effective strategies to retain employees who may not feel connected or engaged with the organization, especially in a time when costs are still being controlled tightly and budgets are quite limited. This employee population is at the greatest risk of finding outside opportunities more compelling than their current positions. High employee engagement scores provide the catalyst for a chain reaction that results in stronger employee retention, lower turnover rates, and increased organizational performance and profitability.
Employee Engagement: The extent to which people enjoy and believe in what they do; are satisfied with their work and take pride in their employer; and they believe their employer values their contributions to the organization.
Examining Engagement through a Fresh Lens

While the relationship among employee engagement, retention, and performance has been established and corroborated by several research studies and surveys, understanding what drives employee engagement in organizations that do engagement well, has been less explored.
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BlessingWhite, 2011 Employee Engagement Report January, 2011, BlessingWhite Corporation Casserly, Meghan Quitting Is On The Rise. And Thats A Good Thing May 16, 2011, Forbes.com
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To better understand our respondents and their organizations, we asked them a number of baseline questions, the first of which was whether they felt employees in their organization were engaged. Nearly 3 in 4 (71%) respondents agreed that their employees were engaged; however, only 1 in 10 strongly agreed with this assessment. Figure 2: Based on the definition of employee engagement: The extent to which people are satisfied with their work; have a positive attitude towards their employer; are committed to the organizations success; and feel valued for their work. How much do you agree or disagree: Employees in my organization are engaged.
NET AGREE Strongly agree Agree Disagree Strongly disagree Not sure 0% 4% 4% 20% 40% 60% 21% 11%
71%
60%
80%
The next baseline question focused on retention rates, asking respondents whether their business leaders were satisfied with the current employee retention rate at their organization. More than a third of respondents (36%) stated that their business leaders were satisfied with the current employee retention rate in their organization, and an additional 35% stated they were somewhat satisfied. As the following chart illustrates, there is a compelling connection between these key metrics. Organizations with engaged employees are more satisfied with their employee retention rate and those who strongly agreed their employees were engaged, had a retention satisfaction rate of 92%. The retention satisfaction rate dropped to 40% among those who disagreed that their employees were engaged. Thus, the relationship between employee engagement and retention rates is a positive correlation as one increases, the other also improves.
Satisfaction with Retention Rate Are Employees Engaged?

Strongly Agree Agree Disagree/Strongly Disagree Satisfied 67% 39% 12% Somewhat Satisfied 25% 41% 28% NET SATISFIED 92% 80% 40%
Figure 3: Data synthesis of organizations with engaged employees and satisfaction level of employee retention rates.
Given this important correlation, we segmented our respondents into two categories in order to further isolate the key findings of this survey and examine engagement through a fresh lens. In the remaining portion of the report, we will refer to Top Performing Organizations (TPOs) those respondents who strongly agreed or agreed that their employees are engaged AND that their business leaders are satisfied or somewhat satisfied with their current organizational retention rate; and Poor Performing Organizations (PPOs) those respondents who disagreed that their employees are engaged and that their business leaders are not satisfied with their current organizational retention rate. In this analysis, 58% of the survey respondents are classified as TPOs and 42% are PPOs.
Top Performing Organizations (TPOs) Respondents who strongly agreed or agreed that their employees are engaged AND that their business leaders are satisfied or somewhat satisfied with their current organizational retention rate.
Drivers of Employee Engagement

Typically, when we think about employee engagement and the drivers associated with it, we consider the traditional elements of compensation, benefits, and perks to be the most meaningful levers of engagement for employees. Not only does our research demonstrate that this is untrue, but it is increasingly difficult for organizations today to maintain these types of perks given the fragile economic environment that we now live in, even in the postrecession economy. Taking these two factors together, we aimed to identify the true levers that impact employee engagement the most, especially through the lens of TPOs and PPOs to gain valuable insights about best practices and differentiators from our respondent organizations. This finding implies that engagement may be best created through the use of holistic strategies that interconnect an organizations talent with accentuating supportive interpersonal relationships, as well as working
Poor Performing Organizations (PPOs) Respondents who disagreed that their employees are engaged and that their business leaders are not satisfied with their current organizational retention rate.
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to foster a connection between employees and the strategic goals of the organization. Further demonstrating that TPOs have a comprehensive understanding of what drives employee engagement in their organization, our research found that they are better prepared to implement several of these strategic offerings rather than relying on just one or two. Figure 4: How effective are the following in regards to impacting employee engagement in your organization? % Who Responded Effective
Coworker relationships/support Relationship with Manager/Supervisor Connecting work to the larger organizational strategy Training provided Career Development Compensation/Pay/Benefits 0%
21%
65% 39% 55%

38%
42% 34% 19% 21% 33%
27% 20%
20%
40%
60%
80%
100%
Top Performing Organizations (TPOs) Poor Performing Organizations (PPOs)
Furthermore, while the importance of fostering positive relationships to impact engagement has been frequently highlighted in past research studies, the fact that this is a significant differentiating feature for TPOs in our current study underscores the efficacy of this practice to impact employee engagement and retention. One research study remarked, As organizations battle to get the most from their existing people in an environment characterized by skill shortages, the role of human resource practices in fostering employee engagement and commitment is paramount. 5 One of the respondents in our survey underscored this finding when stating, The organization has a responsibility to be a shepherd of organizational talent and to create the conditions that help talent thrive. When talented people feel they are valued and that the work they do has meaning, they become passionate and engaged.
Chew, Janet and Girardi, Antonia Is Career Management the Panacea to Retaining Vital Staff? 2008. International Journal of Management and Marketing Research
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As mentioned above and perhaps a bit surprisingly, our survey uncovered that the least effective means for impacting employee engagement was compensation, pay and benefits. While these benefits are certainly important to an employee, it is the interpersonal relationships and ability to connect work to the organizations strategy that are the most effective means for impacting engagement. Chris Grams, Partner and President of New Kind, elaborated on this finding in his statement that providing a belief in the work conducted is the most effective means for impacting engagement. For me, cultural fools gold is when an organization has really good benefits, a cool workplace, lots of perks those things are great, but they only create the illusion of engagement. Someone can always create an environment thats a little bit better and steal people away. But cultural gold is when you create a purpose or a mission that inspires people to do great work because they believe and because they want to be a part of something amazing. My experience is that companies with a mission worth believing in have one of the most powerful engagement tools there is. To develop unique and effective techniques for retaining current talent and perhaps attracting outside talent, many firms are looking toward career development as a method for impacting employee engagement and retention. Throughout the thought leader interviews conducted for this report, a common theme that emerged was the need for employees to understand what is available to them from a career development perspective, because anecdotally, this seemed to be a key driver of engagement. Our survey findings underscored this trend, and 25% of TPOs agreed that providing career advancement opportunities is a significant method to increase employee engagement. In the following sections of this report, we delve deeper into this element of career development as a true driver of higher employee engagement.
Real employee engagement It almost makes things like your job title and rising up the corporate ladder not matter anymore. In my world, we care a little less about rising up the ladder, and more about are you making major contributions to important things and when you lead, are people going to follow you? Its about meaningful leadership and meaningful work. Chris Grams, Partner and President, New Kind
We conducted an Appreciative Inquiry regarding what people would change at Red Hat and the answer was that our employees want more clarity around the career opportunity discussion. As a result, while we are not promising a cookie cutter development path, we are helping employees see the opportunities available as our company grows. DeLisa Alexander, Chief People Officer, Red Hat
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After we conducted an employee engagement survey in 2010, we recognized that people felt a bit frustrated. They wanted to know, where can I take my career now that those traditional ladders and positions have been flattened? through the partnership that we launched with LHH we developed a response. Were trying to put a little more structure to those discussions about individual development and job opportunities. Margo Armstrong, Assistant Vice President of Talent Practices, MassMutual Financial Group
Key Survey Findings: Differentiating TPOs from PPOs

Now that we have identified TPOs, PPOs, and the core drivers of engagement, it is important to understand how TPOs differ from PPOs in key areas of both the engagement process and the career development process in order to draw some conclusions around next practices. In the following section of the report, we will examine what differentiates TPOs from PPOs in our survey data. These areas include the way they: Assess employee engagement Define career development Determine roles and responsibilities related to ownership of career development Structure the career development program/strategy Leverage multi-directional (i.e., lateral) career movement into overall career development/advancement process
Assessing Employee Engagement

William Costellano of the Center for HR Strategy at Rutgers, pointed to the pitfalls associated with improperly defining and assessing engagement: If one does not know what one is measuring, the action implications will be, at best, vague and, at worst, a leap of faith. 6 Unlike PPOs, TPOs tend to use multiple methods to assess employee engagement. These organizations are proactive in gathering information on their employees levels of engagement by relying on several means to gather information, including: turnover rates, in-house employee surveys, annual performance reviews, and organizational meetings and employee focus groups. Furthermore, they are more likely then PPOs to use more methods that involve leaders regularly reaching out to their employees for coaching and performance discussions. It is important to note that the multiple methods of assessment TPOs rely on to get an accurate measurement of employee engagement are not necessarily more costly than the measures taken by PPOs, but they are indeed more comprehensive. By using every resource available to them, TPOs are able to have more information and a more holistic perspective on the state of employee morale, motivation, and engagement. The key to managing employee engagement and subsequently deriving and developing appropriate strategies for impacting engagement begins with effectively gathering this information.
Castellano, William G. A New Framework of Employee Engagement 2009. Rutgers Center for Human Resource Strategy
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Review Turnover/Retention rates Employee survey results Conduct organizational Town Hall meetings and/or employee focus groups Review of annual performance appraisals Have a gut feel regarding how employees feel about our organization
53% 38% 52% 35% 45% 51%
75% 65% 73% 68%
Figure 5: How do you assess whether your employees are engaged or not?
0%
20%
40%
60%
80%
100%
Defining Career Development

Another key differentiator between TPOs and PPOs is the way in which they have defined (if at all) career development at their organizations. The importance of consistently and clearly defining human capital strategies at an organization is an element that is paramount to these strategies success. Without a true understanding of what the organization means by a given term or program, employees are less likely to be able to take full advantage of these programs. Our survey findings demonstrate another key distinction between TPOs and PPOs as it related to the definition and communication around career development programs and strategies at respondent organizations. Less than half of the PPOs have not defined Career Management and/or Development at their organization, which is considerably higher than the 1 in 4 TPOs who have defined this at their organization. Not only do organizations differ dramatically on the topic of whether they have formally defined career development for their employees, but they also vary in terms of how they refer to this concept. This finding is noteworthy because it suggests that the topic of career development is not uniformly understood or referred to across the human capital field, and by extension, at todays organizations.
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Figure 6: Have you defined Career Management and/ or Development at your organization?
Yes
46% 26% 45% 65% 9% 9%
No
Not sure
0%
20%
40%
60%
80% 100%
This speaks to the somewhat nebulous nature of this particular area of talent management. Indicative of this, our survey revealed that the organizations polled are using no fewer than 36 different terms to refer to career path strategies in their organization and a quarter were unsure as to what term their organization was using, if any. Career Development is the term used by slightly more than half of the respondents. Figure 7: Organizations often times have different names for employee career paths. How are these strategies and/or plans commonly identified in your organization?
Career Development Career Management Other: 34 different names mentioned In the process of developing Not sure NA/Not defined/ No career paths/None 0%
5% 1% 24% 7% 11%
52%
10% 20% 30% 40% 50% 60%
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Now that weve established that TPOs assess employee engagement differently and more comprehensively, and that they more clearly and directly define career development for their employees, we can begin to see that these factors have contributed to their TPO status. But what about the career development programs themselves? How do the career development programs at TPOs differ from those at PPOs, and what elements do they incorporate? TPOs assess employee strengths, weaknesses and career aspirations more frequently than PPOs, which is in alignment with their proactive approach to employee engagement and the development of their employees careers. Figure 8: How often are assessments conducted with employees to understand their strengths, weaknesses and career aspirations?
Annually or more often As needed/Depends on manager Not done/Rarely Not sure Other 0%
2% 5% 2% 8% 1% 9% 12% 18%
82% 60%
20%
40%
60%
80%
100%
Determining Roles & Responsibilities Related to Ownership

Another key element of career development programs is around determining the roles and responsibilities associated with the ownership of these programs and the work involved. As with all strategic human capital endeavors, there is a key responsibility for a number of stakeholders in the organization: the employee him/herself, the manager, and the organization as a whole. According to our survey findings, this was another key differentiator between TPOs and PPOs. A higher percentage of the TPOs indicated career development was an activity and process among the employee, the manager and the organization. We believe this to be a best practice, one in which an environment of engagement is created rather than a compartmentalized process devoid of
Your career is all about your journey its an exploration of your talents, your opportunities, and your potential you own your interests and your values and you own your career. Your manager is in a place to support and guide you along that journey and be honest and realistic with you, while you are in the drivers seat. Scott Cohen, Vice President of Talent Practices, MassMutual Financial Group
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interaction and consideration of organizational opportunities and needs. Again, TPOs consistently demonstrate fluency around the need for interconnectivity and shared responsibility for career development. This relationship is vital in order to foster a comprehensive strategy that prepares employees for the career development opportunities available to them within the organization. One survey respondent pointed to the positive impact an involved manager can have on satisfaction and retention. The best supervisors who present a way for employees to develop themselves have seen the greatest retention and satisfaction scores among their employees. It definitely makes a difference in the engagement of employees. Much of the research in the past decade has revealed that there is a positive correlation between organizational career development paths and individual career growth, including a 2009 report from the European Journal of Work and Organizational Psychology. First, evidence is provided for the idea that the career self-management initiatives employees undertake to manage their career within the organization cannot be considered as a substitute for Organizational Career Management. Individuals taking responsibility for managing their own careers also expect an active contribution from their employer. Both complement one another and they are positively related.7 Figure 9: In your organization, who has the responsibility or owns the management and development of an employees career?
Shared responsibility between the employee,the manager and the organization Shared responsibility between the employee, the manager The employee The employees manager The organization Not sure Other 0% 8%
3% 10% 3% 3% 1% 3% 1% 2%
47% 35% 22% 20% 23% 27%
20%
40%
60%
80%
100%
De Vos, Ans and Dewettinck, Koen. The professional career on the right track 2009. European Journal of Work and Organizational Psychology
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Structuring the Career Development Strategy

But what about the programs and strategies themselves? How do TPOs structure career development versus the way that PPOs do (if at all)? When asked to describe their organizations approach to Career Management, a significantly higher percentage of TPOs indicated that they had developed general and/or individual plans and policies for employee career development/ advancement. This finding once more illustrates the holistic perspective TPOs take to career development. In the same way that there must be shared ownership of career development among the organization, manager, and employee, the creation of both individual and general development and/or advancement plans must supplement the other development activities organizations provide for their employees.
We have developed general plans and policies for employee career development/ advancement We have developed individual plans for specific employee career development/ advancement Some combination of the above
10% 12% 16% 10% 44% 31% 70% 53% 30% 45% 0%
Figure 10: Which of the following best describes your organizations approach to Career Management?
NET Developed General and/or Individual Plans We do not have specific plans and policies for career development/advancement this is addressed on an as needed basis Not sure 2% 20% 40%
0%
60%
80%
100%
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With 45% of the PPOs treating career management as an ad hoc practice, these organizations will have to confront the outcomes of this deficiency, which will likely lead to lower levels of engagement, compromised retention levels, and, ultimately, poor business performance and profitability. In combining the data of those organizations that have developed Career Management (CM) plans and those who have defined Career Development and/or Management (CDM), the results are quite groundbreaking. Of those organizations that do both define Career Development and/or Management and have developed career management plans 89% stated their current approach to career development and/or management is effective. By contrast, those organizations that have developed plans and have NOT defined CDM have a much lower effectiveness rate. Figure 11: Data synthesis of how effective an organizations approach to career Development and/ or Management (CDM) is, and whether or not an organization has defined CDM and/or developed a plan for it. How Effective Have Have Have NOT Have NOT is Approach Developed Developed Developed Developed to Career Plan(s) AND CM Plan(s)/ CM Plan(s) CM Plan(s)/ Development Have Defined Have NOT AND Have Have NOT and/or CDM Defined CDM Defined CDM Defined CDM Management Effective Somewhat effective NET EFFECTIVE Ineffective Not sure 11% 78% 89% 11% 0% 5% 62% 67% 30% 3% 12% 25% 37% 63% 0% 2% 31% 33% 64% 3%
The data clearly show that the effectiveness of a career development and/or management plan improves with each additional element incorporated (those elements being a plan AND a definition for career development and/or management). Intuitively, this makes sense. The more focused a plan is, and the more its executors understand its goals, the more effective they are at achieving them. Those organizations that have not defined CDM prior to implementing a CDM plan are not able to fully develop an appropriate strategy, nor are they able to truly gauge whether or not its effective in achieving its goals. These organizations flounder when compared to those with both a definition and plans. Furthermore, it is these organizations that have the most to gain from
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fully developing their career development definitions and aligning them with career development plans. Organizations with unsuccessful Career Management strategies may not necessarily be doing the wrong thing, but rather are just not doing enough, and have not strategically aligned their organizational goals with the career development plans that have been successful for other organizations. Inaction seems to be a more common fault than counterproductive measures, even amongst organizations that recognize the value of Career Management. After uncovering many of the elements of career development plans, it is important to distinguish what works holistically from what does not. So, what does an effective Career Management/Development plan look like for organizations? More than half of the TPOs (57%) agreed that the comprehensive definition of Career Management provided in the survey represents their organizations approach to Career Management/Development. However, only 1 in 4 of the PPOs agreed with this definition (see Figure 12). Figure 12: How much do you agree or disagree that this definition represents your organizations approach to Career Management and/or Development: The organization has a defined process to establish and manage long-term career plans for all employees that align employee strengths and interests with career goals and opportunities within the organization. As part of this process the organization provides skills development, coaching and mentoring to ensure employee career growth and goals are met. Career development is employee-driven, manager enabled and supported by the organization and its guiding talent management strategy.
NET AGREE Strongly Agree Agree Disagree Strongly disagree Not sure 0%
6% 9% 2%
57% 25%
48% 22% 34% 44% 27% 3% 5%
20%
40%
60%
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100%
And, while not all organizations have embraced this type of career development planning, a majority felt this plan would have an impact on employee engagement and retention, which, as defined above, has a direct correlation to increased organizational performance.
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Figure 13: What impact would this Career Management and/or Development plan have on employee engagement and employee retention?
Employee Engagement
Significant impact Moderate impact No Impact Not sure 55% 35% 3% 7%
Employee Retention
51% 39% 3% 6%
Recent research from Deloitte makes a similar conclusion. As employees eye the exit signs following a hard hitting recession, employers need to tailor and target their talent strategies to satisfy each employee group from baby boomers to Millennials. Firms can separate themselves from their competitors if they step up their talent programs now and refine their strategies to engage workers and to focus on specific employee needs. 8
Multi-Directional Career Movements Helping employees to navigate through todays environment of flatter organizations, reduced vertical opportunities and shifting organizational priorities requires similar maneuvers to ultimately move an employees career forward.
Leveraging Multi-Directional Career Movements

The final compelling distinctive element of TPOs versus PPOs relates specifically to career pathing or advancement. This is a particularly complicated process to define for todays modern organization mostly because organizations are flatter than they once were, and the traditional concept of moving up the career ladder is no longer something that is necessarily possible or even straightforward. There is an emerging belief that effective career advancement is not limited to a linear progression up the corporate ladder, and is rather defined by a series of lateral, as well as upward, moves to impact an employees career development. The increasing interconnectivity among organizational functions calls for a more interconnected method of movement within an organization and within individual career advancement, and muti-directional career movement offers this flexibility. The survey results indicate a prevalence of these multi-directional moves is taking place more regularly among TPOs. A combination of lateral moves and upward moves were mentioned more frequently by TPOs as a means for career advancement within their organization, as opposed to the standard corporate ladder.
Hollon, John Deloitte Survey: Two Out of Three Workers Actively Looking for New Job May 3, 2011. TLNT.com
This trend was first observed in 2001, and was described in the following excerpt, Organizational career development programs started being developed in response to the changing nature of employees career
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expectations and desires. The traditional psychological contract between employers and employees in which lifelong employment was guaranteed has ended. Employers focus more on helping employees build employability so that they are able to make any number of career changes vertically or laterally. The hierarchies that once made straight career paths simple are disappearing, and organizations have become flatter. 9 It is paramount for organizations to embrace and capitalize on this shift if they aim to ensure that career development opportunities remain a key lever for increasing employee engagement and satisfaction. By contrast, nearly 1 in 3 PPOs continue to utilize the corporate ladder to describe career advancement in their organization. This failure to change the development strategies to align with current workforce trends will arguably impede these organizations in the future and likely result in lower employee engagement and increased rates of turnover. As top talent continues to look elsewhere for opportunities and organizations that allow them to move more freely and advance their knowledge and skills more readily, organizations would be wise to adapt.
With the trend moving towards flatter organizations, it is critical to provide managers with a way to explore the different career options, such as lateral moves or enrichment activities, within the company. An employee whos aware that the organization wants them to grow there tends to have increased levels of engagement. Kristen Leverone, Global Talent Development Practice Leader, LHH
Career advancement in our organization features lateral moves as well as upward moves to develop an employees career Career advancement in our organization is typified by moving up the corporate ladder within specific department or functional silos Not sure
3% 8% 4% 10% 17% 35%
77% 48%
Figure 14: Which of the following best describes career advancement within your organization?
Other
0%
20%
40%
60%
80%
100%
9
Greene, Barbara Competitive employers make career development programs a priority June, 2001. San Antonio Business Journal.
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As employees grow and develop, their interest might evolve in directions other than vertical lanes. We encourage employees to pursue their passion, so that might take them in a nonlinear direction. Survey Respondent
One survey respondent pointed to the need for this flexible career movement to attract and retain talent. Employees can come into the organization with one set of ideas about career movement, and then based on experience and additional maturity, find another area of focus. In the coming talent crunch, those organizations that provide multiple ways to advance and learn and contribute will be the most successful organizations in attracting needed talent. Organizations that are willing to move employees laterally and provide roles or assignments in departments other than the ones they are currently in are finding the strategy to be a unique and effective method of engaging their workforce, developing their competencies and careers, and ultimately, retaining them longer than those who maintain the traditional, unidirectional corporate ladder approach. Additionally, it can be advantageous for the managers and leaders to take an active role in guiding employees through potentially complex career trajectories as the employee may not be aware of opportunities that exist and how their talents and passions will best meet the needs of the organization. Furthermore, lateral movements can serve as an alternative to upwards promotions, which have become difficult to support due to current economic conditions. Hewitt Associates reiterated this point in their recent study when they stated, As companies report limited career opportunities for upward
Figure 15: Based on this definition: The traditional corporate ladder symbolizes upward promotion as the primary means for career advancement within an organization. The corporate lattice symbolizes a different method of career advancement. The lattice represents the idea that employees can move in several directions within the organization rather than just upward. This movement provides employees with the opportunity to gain experience in new areas of the organization and diversify their skill set and as a means for developing their career. How likely would your organization be to use the career lattice approach to career advancement within your organization?
NET LIKELY Very Likely Likely Unlikely Already use career lattice Not sure 0%
8% 13% 8% 8% 9% 28% 16% 32%
48%
71%
44%
35%
20%
40%
60%
80%
100%
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Why Likely?
Why Unlikely?
Limitations on upward movement due to greater span of control and flatter organizational structure have restricted ladder movements; therefore, lattice movements are more prevalent these days.
Having breadth of experience and knowledge is important to understand the interconnectivity of all areas of our organization.
Organizational structure is very hierarchical with strict and traditional expectations around reporting. The lattice model would require a significant shift in management culture.
Organizations first need to focus on the how of career conversations they need to help their managers initiate these conversations with their employees. Once the conversations are happening, they can then focus on the what how to help their managers improve the content, quality, and effectiveness of these conversations. Kristen Leverone, Global Talent Development Practice Leader, LHH
growth, other types of growth are increasingly considered as a basis for career development for example, growth within an existing role and within the function are indicated at 75% and 76% of respondents, respectively. When presented with the concept of multi-directional career advancement nearly 3 in 4 TPOs (71%) are likely to use this approach to career advancement. Among those likely to use this approach, many mentioned that there are limited vertical growth opportunities available in their organization. This approach would be a method to provide movement within their organization, when it may otherwise not be possible. Many also cited the benefits of employees gaining experience and broadening their skills, and being able to provide their employees with the opportunity to pursue their passions. Among those unlikely to use multi-directional career advancement (mostly PPOs), many noted the approach would be counter to their organizations culture, upper management would not support this endeavor, and it would be contrary to the organizational philosophy in place.
My own career path at Red Hat is an example of the opportunities that are offered here I started off in the office of General Counsel and moved over to lead the People Team five years ago, and my role has definitely evolved. By far, the opportunity for continuous learning is one of the most engaging things about working at Red Hat. Responsibilities may grow, shrink, then grow, then move laterally my career experience at Red Hat has undulated naturally in this way. DeLisa Alexander, Chief People Officer, Red Hat
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HCI Research
In addition to the recognition regarding the importance this comprehensive planning would have on employee engagement and retention, there is significant intent regarding developing this type of planning by TPOs and PPOs in the next 1-2 years. Therefore aspirationally, this is something organizations plan to incorporate in the future. Figure 16: How likely is it that your organization will develop a Career Management and/or Development plan as we have defined it within the next 1-2 years?
We already have this type of plan NET LIKELY Very Likely Likely Unlikely Not sure 0%
33% 12% 45% 49% 16% 13% 29% 36% 18% 31% 5% 8%
20%
40%
60%
80%
100%
Employee Engagement can be very challenging, especially with a very young workforce. People often enter into this industry and are looking for a promotion every two years. So it is critical that we first set expectations because when people are not moving up or developing as they see fit, it will negatively influence their engagement. Russell Lobsenz, Director of Talent Development, Orbitz
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Key Barriers
Among those unlikely to adopt this plan, a lack of budget and training were the primary barriers to adopting this plan among TPOs. Among PPOs, primary barriers included a lack of talent management infrastructure and management buy-in, in addition to a lack of budgets and training. While lack of budget and resources was mentioned most frequently as a barrier to developing these kinds of programs, there may be also a lack of awareness regarding the value of implementing a program such as this and what the key benefits that can be derived from it are. Figure 17: What would prevent your company from adopting a Career Management and/or Development plan as we have defined it?
Lack of budget/resources Lack of manager coaching/mentoring/career management and/or development skills Not prepared to adopt a Career Management and/or Development plan because we do not have the fundamentals in place (i.e., an integrated talent management system, new competency model, etc.) Lack of Senior Manager buy-in We don't have enterprise-wide planning for talent Would not fit our organizations culture Other
10% 18% 7% 7%
69% 67% 59% 52%
37% 46% 29% 49% 30% 24%
0%
20%
40%
60%
80%
100%
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HCI Research
Conclusion
The modern organization, whether a TPO or a PPO, exists in a world that looks very different than even a few short years ago. Employee engagement has been a hot-button issue for most organizations for a variety of reasons. One such reason is the proven relationship between employee engagement, retention, and organizational performance. The focus of this study was to profile the types of organizations that do employee engagement well, i.e., TPOs, and glean some lessons and best practices to apply to organizations that may not yet feel its employee engagement and retention practices are satisfactory or fully effective. While typical drivers of employee engagement might have traditionally been thought of as enhanced compensation packages, better benefits, unique perks, etc., our research has shown that these are not the most effective ways to enhance employee engagement. Through surveys and SME interviews we have identified that the relationship of the individual to the organization, the support of management and leadership, and transparent, comprehensive career development opportunities and plans are actually the more effective means to affecting employee engagement. In examining employee engagement from a fresh perspective TPOs vs. PPOs we were able to identify a number of key differentiators that can arguably make the difference in terms of true employee engagement and real satisfaction related to retention rates. TPOs, those organizations with high employee engagement and high satisfaction with retention rates, demonstrated consistently different talent management practices with respect to the following aspects of employee engagement strategies, as well as career development processes. The most dramatic differences were noteworthy, and centered on the way that these organizations: Assessed employee engagement Defined career development D etermined roles and responsibilities related to ownership of career development Structured the career development strategy L everaged multi-directional career movement as a core career development strategy
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These differentiating practices represent next practices related to both career development and employee engagement. Human capital practitioners should assess these elements at their organizations to determine where their organization falls with respect to TPO vs. PPO. By focusing on these elements, organizations can become TPOs and enjoy the benefits of increased engagement, retention, and organizational performance.
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HCI Research
Appendix A: About the Research Partners The Human Capital Institute

The Human Capital Institute (HCI) is a catalyst for innovative new thinking in talent acquisition, development, deployment and new economy leadership. Through research and collaboration, our global network of more than 138,000 members develops and promotes creativity, best and next practices, and actionable solutions in strategic talent management. Executives, practitioners, and thought leaders representing organizations of all sizes, across public, charitable and government sectors, utilize HCI communities, education, events and research to foster talent advantages to ensure organizational change for competitive results. In tandem with these initiatives, HCIs Human Capital Strategist professional certifications and designations set the bar for expertise in talent strategy, acquisition, development and measurement. www.hci.org
Lee Hecht Harrison

With over 270 offices worldwide, Lee Hecht Harrison is the global talent development leader in connecting people to jobs and helping individuals improve performance. LHH assists organizations in supporting restructuring efforts, developing leaders at all levels, engaging and retaining critical talent, and maintaining productivity through change. Lee Hecht Harrison is a part of Adecco Group, the world leader in workforce solutions with over 6,000 offices in over 70 countries and territories around the world. For more information, visit www.lhh.com.
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About the Authors

Katie Sokol Ratkiewicz, MPA is a Practice Leader at the Human Capital Institute who is responsible for managing the Organizational Development and Leadership Product Team. Katie brings over 5 years of Human Capital Consulting experience for leading companies, most recently at Deloitte Consulting. Her consulting experience has focused on enhancing organizational and people performance through competency development, career management programs, learning and development programs, training design and delivery, succession and workforce planning, assessment processes for sourcing and selection, and overall program administration. Recent research highlights have focused on innovative talent practices related to generational differences in the workplace, diversity and inclusion best practices, virtual teaming capabilities, and developing practical approaches for work/life balance in the new economy. Katie earned her bachelor and Master of Public Administration degree from Clark University. She is currently based in Newport, RI. Aubrey Krekeler Wiete, MA is a Research Analyst at the Human Capital Institute. She most recently worked at the University of Kentucky, where her research included the use of social media as a recruiting tool and the business imperative of Global English. Aubreys areas of interest include leveraging employee satisfaction and performance through organizational leadership and development planning, and fostering creative business cultures. She earned her bachelors degree from Saint Louis University and a Masters degree in Organizational Communication and Health Communication from the University of Kentucky. Aubrey is currently based in Cincinnati, OH.
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HCI Research
Appendix B: Respondent Demographics Function

2% 2% 1% 4% Human Resources Operations Strategy Sales Finance Research and Development Marketing Customer Service Other
87%
Number of Employees
27% 42% 8% 7% 16% Less than 1,000 1,000-3,000 3,001-5,000 5,001-10,000 10,000+
Region
2% 1% 7% North America Central/South America Africa Asia/Pacific Europe 3%
87%
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Industry
20% 1% 2% 5% 4% 4% 3% 6% 10% 9% 8% 6%
Healthcare Technology Government Professional Services Financial Services Non-profit/Charity Aerospace & Defense Banking Insurance Retail Automobiles & Parts Food & Beverage
Oil and Gas Pharma/Life Sciences Industrial Goods & Services Utilities Construction & Materials Leisure Media Personal & Household Goods Real Estate Chemicals Forestry and Paper Industrial Metals and Mining Other
Revenue
1% 3% 6% 21% 17% 13% 11% 8% 5% 5% 11%
Less than $10 million $10-50 million $50-100 million $100-500 million $500-750 million $750 mill-1 billion $1-10 billion $10-50 billion $50-100 billion >$100 billion N/A -Government or Nonprofit Director Manager Team Member Middle Manager Vice President Senior Director C-Level (CEO, CHRO, CIO, etc.) Executive Senior Vice President President Other
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Level
1% 2% 3% 6% 9% 12% 15% 20% 5%
4%
24%
HCI Research
Appendix C: Works Cited

BlessingWhite (January, 2011). 2011 Employee Engagement Report, BlessingWhite Corporation. Boyd, Sandra and Spurgeon, Kim (2010). Engaged Employees and the Bottom Line, Knightsbridge HCM Bureau of Labor. (June 7, 2011). Job Openings and Labor Turnover Survey Highlights April 2011, Bureau of Labor Statistics. Casserly, Meghan (May 16, 2011). Quitting Is On The Rise. And Thats A Good Thing, Forbes.com. Castellano, William G. (2009). A New Framework of Employee Engagement, Rutgers Center for Human Resource Strategy. Chew, Janet and Girardi, Antonia (2008). Is Career Management the Panacea to Retaining Vital Staff?, International Journal of Management and Marketing Research. De Vos, Ans and Dewettinck, Koen (2009). The professional career on the right track, European Journal of Work and Organizational Psychology. Greene, Barbara (June, 2001). Competitive employers make career development programs a priority, San Antonio Business Journal. Hewitt Associates LLC (June, 2010). The Current State of Performance Management and Career Development, Hewitt Associates LLC. Hollon, John (May 3, 2011). Deloitte Survey: Two Out of Three Workers Actively Looking for New Job, TLNT.com. Katzanek, Jack (December 25, 2010). Companies may lose top talent as economy recovers, Enterprise Media. Lederman, Gregg (May 28, 2009). Employee Engagement: Enough! The recession is no time to worry about employee engagement. Pro or con?, Businessweek.com. Oglethorpe, Antoinette (2010). Career Management: Best Practices in Organizations and the Implications for HR, thecompletetrainer.com. Towers Perrin (2008). An Interview with Julie Gebauer on Towers Perrins Just Released Global Workforce Study, Part 2, Towers Perrin.
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Connecting The Dots: Driving Engagement Through Career Development

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Connecting the Dots:

Appendix B: Respondent Demographics.............................................................. 30 Appendix C: Works Cited...................................................................................... 32

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Connecting the Dots:

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About This Research

Definition of Key Terms

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Current Talent Environment

Conventional Wisdom: Employee Engagement & Organizational Impact

Examining Engagement through a Fresh Lens

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Copyright 2011 Human Capital Institute. All rights reserved.

Satisfaction with Retention Rate Are Employees Engaged?

Drivers of Employee Engagement

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65% 39% 55%

42% 34% 19% 21% 33%

Top Performing Organizations (TPOs) Poor Performing Organizations (PPOs)

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Copyright 2011 Human Capital Institute. All rights reserved.

Key Survey Findings: Differentiating TPOs from PPOs

Assessing Employee Engagement

Copyright 2011 Human Capital Institute. All rights reserved.

75% 65% 73% 68%

Top Performing Organizations (TPOs) Poor Performing Organizations (PPOs)

Defining Career Development

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46% 26% 45% 65% 9% 9%

Top Performing Organizations (TPOs) Poor Performing Organizations (PPOs)

10% 20% 30% 40% 50% 60%

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Top Performing Organizations (TPOs) Poor Performing Organizations (PPOs)

Determining Roles & Responsibilities Related to Ownership

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47% 35% 22% 20% 23% 27%

Top Performing Organizations (TPOs) Poor Performing Organizations (PPOs)

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Structuring the Career Development Strategy

Top Performing Organizations (TPOs) Poor Performing Organizations (PPOs)

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48% 22% 34% 44% 27% 3% 5%

Top Performing Organizations (TPOs) Poor Performing Organizations (PPOs)

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Leveraging Multi-Directional Career Movements

Top Performing Organizations (TPOs) Poor Performing Organizations (PPOs)

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Top Performing Organizations (TPOs) Poor Performing Organizations (PPOs)

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Copyright 2011 Human Capital Institute. All rights reserved.

Top Performing Organizations (TPOs) Poor Performing Organizations (PPOs)

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69% 67% 59% 52%

37% 46% 29% 49% 30% 24%

Top Performing Organizations (TPOs) Poor Performing Organizations (PPOs)

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Copyright 2011 Human Capital Institute. All rights reserved.

Copyright 2011 Human Capital Institute. All rights reserved.

Appendix A: About the Research Partners The Human Capital Institute

Lee Hecht Harrison

Copyright 2011 Human Capital Institute. All rights reserved.

About the Authors