Career Growth: What It Means and Why Companies Should Invest in It

Career growth is top of mind for many of your team members this year. In fact, 83% of employees report that improving their skills is one of their top priorities and 88% are already putting a significant amount of time and effort toward this endeavor.

But most employees don’t believe they have the right conditions for career growth within their current organization. Only 26% say their organization challenged them to learn a new skill and 15% say their organization encouraged them to move to a new role. This presents a missed opportunity for employers who may never realize their team’s full potential.

Investing in career growth can bridge this gap between employees and employers, benefitting both groups enormously.

What is career growth?

Career growth encompasses all the steps an employee takes on their journey to achieve their professional goals. Some of these steps are relatively small, like mastering a new skill or working on a stretch assignment. Some are bigger, like earning an advanced degree or promotion. But all of these steps contribute to overall improvement and help the employee progress in their professional life.

Why employee career growth matters

Rapid changes in recent years have prompted many people to reevaluate their work and personal lives. Most employees (89%) say they’re motivated to improve their skills this year, with 76% noting that the pandemic increased their motivation. Workers hope that advancing their career will lead to higher pay (59%), better work-life balance (48%), and a sense of purpose (41%). Among those with leadership ambitions, 47% would like to create a better work experience for the next generation and inspire others to follow their dreams. 

Career growth also has many worthwhile benefits to your business, including: 

• Attracting more job candidates. Nearly nine out of 10 job seekers want to see career advancement opportunities, a skills development program, and ways to progress toward a different job or career track. Offering career growth opportunities can help you attract talent in a tight labor market. 
• Reducing talent acquisition costs. Almost four in five L&D (79%) pros agree it’s less expensive to reskill a current employee than it is to hire a new one. That’s because internal hires typically have a lower sourcing cost, onboard faster, and stay longer.
• Closing skill gaps. Skill sets for jobs have changed by around 25% since 2015 and this number is expected to double by 2027. Nine in 10 executives and managers say their organizations already face skill gaps or expect them to develop within the next five years. Most leaders believe skill-building is a better way to close those gaps than hiring, contracting, or redeploying employees.
• Increasing employee engagement. Employees who move into new jobs internally are 3.5x more likely to be engaged than those who stay in their current jobs. In turn, higher employee engagement can lead to lower absenteeism, higher productivity, and higher customer loyalty.
• Retaining employees. Employee retention has been top of mind for many companies through the Great Resignation and beyond and will always be crucial when it comes to top performers. Companies that excel at internal mobility are able to retain employees for an average of 5.4 years — nearly 2x longer than companies that struggle with it.
• Improving business performance. Given the many benefits of offering career growth, it’s no surprise companies often see this type of program improve their bottom line. Companies that facilitate career development are 2.6x more likely to exceed financial targets.

The takeaway is clear: Investing in employee career growth is good for your team members and it’s good for your business.

How to facilitate professional growth

Globally, only three in 10 employees strongly agree that someone at work encourages their development. 

The good news is that companies do understand the importance of building out programs to support employee development and most are already working on it. Nearly four in 10 companies (39%) are in the early stages of ideation, getting buy-in, and assembling a core working team. Another 37% are in program development, while 15% already have active employee learning programs and 5% are assessing the results of their program. Only 4% of companies surveyed have not begun development. 

Here are some best practices for getting started with employee career growth.

1. Find the intersection between employee career goals and business needs

Employee career growth works best when you can align an employee’s professional goals with your company’s current or future needs. This ensures you’ll have the opportunities available to encourage professional growth.

Begin by identifying your organization’s current and anticipated skill gaps and business goals. Which roles are the most challenging to fill? Do you have people ready to step into leadership or other mission-critical roles in the event of a resignation or retirement? How will your business strategy change and what skills will you need to handle those changes? Do this exercise regularly to stay on top of changes so you can address them in a timely manner.

Then talk to your employees — during performance reviews or more informal conversations — about their career goals and development opportunities. What would they like to learn? What skills do they currently possess that they’d like to use more at work? Where do they see themselves in 5, 10, and 20 years? Share some details around the skills your company will need and gauge interest around the projects and roles that could be a good fit.

Once you’ve identified the right growth opportunities for each person, build a career path and employee development plan to help them get there. Even if you can’t realistically offer what your employee would want to remain at your company long term, do what you can to develop them anyway. It will improve employee performance now — and they can always come back later as a boomerang hire.

2. Suggest career development opportunities

Employees who have opportunities to learn are 3.5x more likely to report they believe their company can help them meet their career goals. 

McKinsey found that digital learning is the most suitable format for skill building, but that a multichannel approach increases a development program’s success. Companies that use fewer than four learning formats cite a 50% success rate, while companies that use eight or more report a 70% success rate. 

Learning formats that McKinsey considered include:

• Digital learning
• In-person and/or virtual workshops
• Individual or team assignments
• Peer learning teams
• Expert coaching
• Sponsor or manager coaching
• Experience-led change supports
• Organization-led change supports
• Performance support
• Experiential and/or “go-and-see” learning
• Fieldwork
• Organizational and/or individual diagnostics

Other commonly used learning formats include mentoring, stretch assignments, and job shadowing.

The number of formats and learning options may feel overwhelming to your team members, who may not know where to begin. That’s probably why 78% of learners expressed the need for course recommendations based on their individual career goals and skill gaps. 

Provide specific professional development recommendations to each of your team members to help them reach their career goals.

3. Offer career progression

More than half (54%) of learning and development (L&D) pros agree that internal mobility has become a higher priority at their organization since COVID-19. This is a great way to reward your team members and retain the talent you’ve invested in.

Internal mobility increases the chances an employee will stay at your company so you can both continue to benefit from their development. In fact, 75% of employees who receive promotions will stay with the company for at least three years, as will 62% of workers who make lateral moves. Even switching or altering employee roles or responsibilities without a raise or change in title increases the likelihood of retaining high potential workers and top performers by over 20%.

Promotions are a great way to offer career growth, but they’re not the only way. Employees can gain a wealth of experience moving across your organization to pursue new opportunities. For example, someone who eventually wants to move into a chief marketing officer role may make several lateral moves to gain experience in demand generation, corporate branding, and content marketing. Similarly, an accounting director may technically take a demotion to move into an FP&A manager role and broaden their experience in a new area of finance. Or a recruiter might choose to use their transferable skills to move into a sales role.

Each step in an employee’s career journey counts as a step forward so long as it gets them closer to their goals.

Final thoughts: Employee growth is your key to organizational success

Nearly seven in 10 organizations (69%) are doing more skill-building now than they did before the pandemic, and most say they’ll continue to increase their spending on L&D in the years ahead. It’s no secret that employee development helps organizations build stronger teams, retain employees, and produce better business results. 

Get onboard or potentially get left behind in the new world of work.