The career ladder is dead. Or, at least, the rungs are looking a little wobbly these days.
That’s according to research published by MIT Sloan Management Review, which found the biggest predictor of employee retention in a company was offering lateral career opportunities — the ability for employees to move into new roles with similar levels of pay and responsibility.
Researchers analyzed 34 million online profiles of U.S. workers who left their employers between April and September 2021. The research found that providing employees with lateral career opportunities was “2.5 times more powerful as a predictor of a company’s relative retention rate compared with compensation.”
In other words, the next time you’re tempted to give a promotion to one of your top performers as a means of retention, consider lateral career options instead — which showed to be 12 times more predictive of employee retention than promotions, anyway.
Turns out, not everyone is hungry for vertical growth, which comes with more work and responsibility. Some just want a new challenge or have a desire to grow their skills in different areas within the company.
“Many workers simply want a change of pace or the opportunity to try something new. When employees talk positively about lateral opportunities — new jobs offering fresh challenges without a promotion — they are less likely to quit,” the report reads.
The career ladder has been replaced with the career “web,” which is more complicated, but also less rigid in its definitions of success. Perhaps this happened some time ago, but the COVID-19 pandemic and its impact on workplace satisfaction has certainly accelerated the dismantling of the employment hierarchy.
Even though the worst of the Great Resignation seems to be behind us, employee turnover rates are still trending high, and business leaders need to respond effectively.
The moral of the story? Be open to a more winding path to success and career development, and offer employees opportunities to get there — however that looks for them.
