Most workers, particularly those who are skilled and talented, have professional growth aspirations. Over time they want to gather knowledge and skills, they want to be given more responsibility, and they want to work their way up the organisational ladder.
By offering opportunities for professional development, you also offer your best and brightest talent a compelling reason to stay.
In this guide we'll take a closer look at why employee career pathing is critical to retaining the best employees, and how a New Zealand business might go about implementing these growth pathways.
Why career development impacts employee retention
46% of workers who are considering quitting their jobs say that it is due to a lack of career opportunities.
People are any business's most important asset. A cliche for sure, but cliches are cliches for a reason.
The most successful organisations keep their best people around for the long term, by offering them clear visions of potential futures within the organisation. These career growth and advancement pathways give employees a future to work towards. They represent aspiration and hope for a career that is more rewarding - both emotionally and financially - than the one they have today.
In this way, offering clear career paths can drive employee engagement and motivation too. It helps employees get a deeper sense of satisfaction from their work, because they know that they're working towards something real and worthwhile.
Common barriers to career progression in NZ workplaces
Offering enticing career trajectories, particularly those that align with the needs, wants and wishes of your workforce, perhaps isn't as simple as it sounds.
There are a few challenges that a New Zealand business might face in creating career progression opportunities, including:
Limited pathways: Small-to-medium sized businesses may only have a handful of leadership and executive positions that employees can work towards. If there's no indication of a position opening up, top talent could look for opportunities elsewhere.
Lack of resources: While on-the-job training is obviously valuable, some upskilling demands third-party expertise. This investment, often through a dedicated training budget, could stretch smaller organisations.
Unclear career pathways: When potential career pathways are vague or poorly communicated, employees might struggle to understand their progression opportunities, which can lead to disengagement and the loss of top talent.
By recognising these barriers, you can create workarounds. Develop and clearly outline career development pathways. Recognise the value of employee training, and invest in it via a dedicated fund.
And if leadership positions are few, consider new and flexible directions that your business could take - expanding into new markets, offering new products or services - then select a high performing employee to drive those efforts.
Strategies to build a career development culture
The most successful NZ businesses create a culture of career advancement which helps them not only retain their best workers, but attract top talent from other organisations.
Mentoring and coaching
Investing in training from third-party providers is a critical piece of the learning and development puzzle. But you should work to personalise and focus this education by supplementing it with in-house mentoring and coaching.
By pairing younger workers and talented staff members with organisational leaders, you a) show those workers you feel as though they are worth an investment of time and effort, and b) give them useful, company-specific knowledge that will prove invaluable as they grow within the business.
Internal mobility programmes
Top talent doesn't want vague promises of where they could be in two, five or ten years' time. They want a clear vision of the future: where they're going, and how they'll get there. Clear career pathing therefore leads to a more motivated, engaged and loyal workforce.
Develop internal mobility programmes, including clear pathways to promotion, that workers can follow if they want to move up within the organisation. Consider sideways mobility too, by offering workers the opportunity to get a taste of life in different departments across the organisation.
Regular development planning and check-ins
When employees identify interesting career advancement opportunities, sit down with them and develop a plan to reach those goals, including any organisational support that you can provide.
Plan crafted, you should then revisit it regularly with the employee, to ensure their growth is on track, that the steps still align with the end goal, and that you're doing all that you can to assist them in their effort.
Case studies from New Zealand companies
What do employee growth and development opportunities look like in the wild? Let's look at a couple of New Zealand case studies to understand how local employers are approaching this challenge.
Fonterra’s Whakatere Programme
New Zealand's largest company has long recognised the value of home grown talent. In 2023 they launched the Whakatere Programme, which sought to identify and nurture talent for critical Maintenance Manager roles.
The intensive programme was held over the course of a few days, and featured 45 presenters covering 42 topics across nine modules. Programme numbers were also strictly limited, as this ensured every attendee could enjoy 1:1 mentoring from current maintenance managers.
The result: improved retention, and the development of an enviable talent pipeline within the company.
Countdown's Graduate Programme
Supermarkets are primarily viewed as part-time and casual employers, rather than a place where you'd build a career. It's a perception that Countdown knew all too well, thanks to a turnover rate of over 30% in the company's younger team members.
In response the chain launched two initiatives:
The Countdown Graduate Programme: A 12-month course that targeted university graduates, building the capabilities of candidates in their chosen area of the supermarket business, by giving them real projects with real responsibilities.
SEEDS (Students Entering Employment and Developing Skills): A high school programme that gives students the opportunity to work in a store for 10 days across a 10 week period, getting experience in all the supermarket departments, earning NCEA credits, learning important retail skills, and encountering a wide array of career possibilities.
Several of the graduates of both programmes have gone into leadership roles or specialist areas within Countdown.
Measuring the ROI of career development
How do you know whether your career development efforts are working? Simple: you measure them.
Retention metrics
By monitoring the following metrics over time, you can get a sense of whether your retention is trending in the right direction, and the impact of your efforts on the stability of your workforce.
Turnover rate: The percentage of employees leaving your organisation within a specific period.
Average tenure: The average length of time employees remain with your organisation.
Internal promotion rate: The proportion of leadership or specialist roles filled by existing employees vs external hires.
Voluntary vs involuntary turnover: The number of employees who leave by choice vs those who are terminated.
Engagement survey improvements
Employee engagement surveys are valuable tools for gauging the impact of career development initiatives by assessing workplace morale, job satisfaction and the perception of growth opportunities. By conducting regular engagement surveys, organisations can:
Identify successful and less successful career development programmes.
Track changes in employee sentiment over time.
Correlate engagement levels with retention rates.
Gain a deeper understanding of the needs, wants and wishes of top talent.
Implementing feedback from these surveys can lead to more targeted and effective career development strategies, which will ultimately improve employee retention.
Cost of hiring vs. retaining
As of 2022, the average cost of hiring a new employee in New Zealand - including recruitment, onboarding, training and lost productivity - was estimated at $23,860. Add in less tangible costs, like the hit to morale and the loss of organisational knowledge, and turnover costs are estimated to be 100%-300% of the replaced employee’s base salary.
In short, employee turnover is incredibly expensive.
While helping your employees develop the necessary skills for success does demand an upfront investment of time, money and other resources, the ROI on this spend is incredible.
You avoid sky-high turnover and hiring costs, while creating workers that are more productive, more creative, and more invested in the future of your organisation.
How to get started: an action plan for HR managers
How do you develop a career path and retention plan for your organisation? These basic steps are a great place to start:
Audit current development practices: Review the efficacy of any retention and development programmes that are already in place.
Analyse workforce data: Use retention KPIs and engagement surveys to get the lay of the land.
Engage with employees: Speak to workers about engagement survey responses to gain a deeper understanding of their needs, wants and perspectives.
Define clear career pathways: Work with team leaders to create career progression opportunities that employees understand and get excited by.
Involve team leaders: Train managers on how to speak to their teams about the newly developed opportunities.
Launch the initiatives: Introduce the new programmes and encourage top talent to get involved. Make it easy for staff to find and access these pathways.
Track outcomes and adjust: Regularly review data and improve your programmes based on the insights you generate.
Career growth: the key to employee retention
Top talent will want to be the best professionals that they can be. If they can't see such a future within your organisation, they'll search for opportunities elsewhere.
By creating clear paths to a successful, long-term career within your organisation, you can ensure your best workers hang around.
1Team can help too. We give you the power to deliver a range of perks, such as savings from New Zealand's leading retailers, to your high performing team members, through an app that has been tailored and branded specifically for your business.
Ready to become a better leader, and reward and retain your best workers? Get started today.
