Employers prioritizing career development programs to retain talent
Career development programs are poised for significant growth this year, as employers recognize alternative rewards as part of a benefits strategy to keep and retain employees.
According to new research by Korn Ferry Hay Group, companies are prioritizing career development over other alternative rewards, benefits and bonuses for their employees. More than half of the 242 employer respondents polled by the consulting group said they intend to expand the use of career development programs across all employee levels.
“Retention of key talent is a top-of-mind issue for organizations these days, given the lowest unemployment in several years and continued economic health of most industry sectors,” says Tom McMullen, rewards practice leader, Korn Ferry Hay Group. “Most organizations also continue to struggle to maintain a strong pipeline of leaders in an organization. A focus on career development is the most direct way to both retain and ensure a strong bench of talent in the organization.”
Career development, McMullen says, varies between different types of employees and each employer, but generally the best career development programs “optimize the alignment between employee competencies, desired employees and the work to be done.” Programs might include paying for classes that help employees with certain skills related to their job or helping employees map out their way to a dream job.
“A simple tool like a job family model — which identifies the required knowledge, skills, experience, accountabilities, performance indicators and behavioral competencies for a group of jobs — can go a long way in providing clarity between manager and employee in terms of what an employee needs to be able to advance in the organization,” he says. “Additionally, providing career webs, consisting of next likely roles within and across functions, geographies and business units, can help create a picture of what specific paths might look like.”
A renewed focus on career development among employers may be partly due to the lack of commitment in previous years.
Korn Ferry Hay Group’s global employee research reveals that while a competitive compensation and benefits program is often a key factor influencing why employees join an organization, a lack of career development opportunities is the No. 1 reason why employees leave organizations.
Career development programs are part of a larger trend in the benefits world dubbed alternative rewards. Those perks, which in addition to career development programs include spot cash bonuses, health and welfare benefits, enhanced capital accumulation programs, gift/merchandise programs, community impact programs and additional paid time off— are gaining traction among companies, researchers note.
Nine in 10 organizations surveyed in Hay Group’s recent study say they use four or more alternative methods of rewarding employees. Nearly 90% of employers say alternative rewards are key to being an employer of choice; 87% say such perks help them remain competitive; and 81% say alternative rewards help them engage employees.
Over the next year, 71% of the organizations surveyed plan to increase their use of alternative rewards.
Spot cash bonus programs were the next most popular perk employers plan to increase this year, after career development, the survey found.
These alternative rewards are important, McMullen says, because they contain a mix of financial and nonfinancial rewards. That helps employers be creative about rewarding employees while also managing an often limited budget.
“What’s key is that employers offer a suite of rewards and tailor these to different segments of the employee population,” McMullen says. “People are attracted, motivated and retained by organizations for different reasons – both financial and nonfinancial. Organizations are realizing that they need to broaden their view — through conversations with managers, employees and taking a fresh look at their value proposition — to recognize that rewards go a lot further than compensation and benefits. [They should] encompass everything of value the organization offers to its employees.”