To keep employees, companies should focus on career advancement

Executives overlook internal promotions at their peril. In a Pew Research survey, 63% of respondents who left jobs in 2021 cited a lack of advancement opportunities as a reason. And a 2022 McKinsey study noted that a lack of career development and advancement was the most common reason given for quitting a job.

Employers need to nurture employees’ growth and help advance their careers, according to new research by MIT Sloan senior lecturer George Westerman and MIT Sloan Management Review Editor-in-Chief Abbie Lundberg. Their insights come from a survey of more than 1,000 workers and interviews with talent and learning leaders at more than 25 organizations.

Sixty-seven percent of the individual contributors surveyed said they want to advance their career, but 49% said a lack of good career advice has hurt their job trajectory. Too often, executives ask employees to chart their own paths under the guise of empowerment, leaving them aimless. Other times, ill-prepared or badly motivated managers are responsible for mentorship.

A more systematic approach is essential for real growth, Westerman and Lundberg found, including helping employees find and prepare for new internal opportunities and delivering feedback and coaching. Companies are already doing this in programs for high-potential talent, Westerman said at the recent Work/23 event hosted by MIT Sloan Management Review. “The question is, why aren’t companies doing this for everybody?” he said.

Here are three ways companies can help employees with career development.

Employees need to be alerted to internal growth opportunities. People in human resources, especially, need to consider whether roles could be filled by internal candidates across regions or lines of business instead of immediately looking externally. Ideally, HR professionals, managers, and employees should understand which roles are a potential fit for current employees, given their specific sets of experiences and skills, so that they can successfully find new opportunities — without having to look outside the company.

Meanwhile, more detailed internal job postings could help foster career growth, the researchers found. Sometimes job postings highlight skills that an employee doesn’t have, dissuading them from applying, even if they could be a fit. Such postings should provide clarity on how to bridge any skill gaps. For instance, the researchers noted that GE Digital’s online tool, Career Discovery, allows employees to enter their capabilities and interests into the system. The tool then shows other roles in the company that could be a match for an employee, including opportunities that aren’t on their current career trajectory. It also shows competencies an employee might need to gain and where to look for training opportunities.

At wine and spirits company Pernod Ricard North America, employees can use the talent management tool Workday to identify potential vertical and horizontal moves, view org charts, and connect with local HR business partners who can link them with HR teams at other locations. Employees can see all jobs at different grades that are available across the company.

Companies should also help employees develop broader networks so they can explore job options, meet managers, and form relationships throughout the organization. These networks can help a manager become comfortable with hiring an internal transfer seeking a growth opportunity instead of onboarding an external candidate who appears to already have the necessary skills.

Employees need opportunities to learn different skills that might be required by new roles. Identifying paths and courses that can teach key skills is a start, but employees also need the chance to practice new skills, learn from mistakes, and reflect on the experience. For example, customer support representatives at Fidelity Investments can learn a new skill in the morning, practice it in live customer calls (with a manager observing) in the afternoon, and then reflect on the experience with others who are learning the same skill.

Formal rotation programs are also useful, and some companies include them for new hires or in high-potential leadership programs. In 2018, Schneider Electric launched an open talent market, where managers can list opportunities for short-term projects, full-time positions, or mentorships, and workers can engage with the ones that interest them. The short-term assignments and mentorships enable employees to try out new roles and determine whether they might be a good fit for a future full-time job. This also reduces the risk for managers, who gain access to a diverse pipeline of employees they can get to know on short-term projects before committing to hiring them for the long term.

Providing performance feedback is an essential part of learning. This includes understanding employees’ career aspirations and counseling them in how to develop important skills. HR is essential to the process: The department needs to establish these policies and ensure that managers actually implement them. HR should also ask employees how they feel about the help they’re getting from their managers.

While employees need feedback and coaching for their careers to progress, managers also need feedback and coaching on their own coaching abilities. For example, healthcare provider UPMC implemented check-in tools to help facilitate the feedback process. Using Anytime Check-in, anyone can easily send feedback to anyone else in the organization at any time — for example, after working with someone on a project or seeing a colleague make a noteworthy contribution. They can make the comments visible only to the employee or to the employee’s supervisor, too. In addition, supervisors can maintain private notes and reference them at annual review time. Meanwhile, employees get honest feedback in real time from peers and bosses.

Ultimately, helping employees explore new opportunities is in a company’s own best interest. Taking a chance on developing an internal candidate might seem risky, but passing them over exacerbates talent gaps. Ignoring internal candidates also shrinks the pool of potential applicants for open slots and makes current employees feel that they must look outside for opportunities, which deflates morale.