H E A LT H W E A LT H C A R E E R

C A R E E R F R A M E W O R K S : T H E S T R AT E G I C C E N T E R P I E C E O F I N T E G R AT E D TA L E N T M A N A G E M E N T

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A career framework is an integrated, coherent set of tools and activities that facilitates a positive and authentic employee experience, creates a healthy internal talent pipeline, and guides the organization in its talent decisions. It enables the organization to build workforce capabilities through proactive and deliberate career management strategies and communicates to employees the organization’s career philosophy and approach. It explains the paths for professional growth and career advancement around which an individual can build his/her skills, capabilities and work experiences. It sits at the core of the business and touches on all workforce initiatives.

The career framework brings to life the career promise that the organization believes will help attract, retain and motivate talented employees. It defines the career pathways and developmental experiences that will make the right talent want to join, stay, and deliver their best performance. It also provides the common structure and language to guide career initiatives and expose career possibilities.

The framework outlines the job architecture (career levels and job families) within the organization and describes the ways in which jobs contribute to the business at different career levels. It illustrates the major stages of career progression for each key business area and helps employees understand the career options available. Its aim is to address questions such as: How am I doing now? Where could my career progress forward? How can I get there? What are the expectations of the role I’m interested

C A R E E R F R A M E W O R K S D E F I N E Din? The level of detail within the career framework differs among organizations; some describe structured career pathways while others provide illustrative examples of the possibilities.

It can be helpful to think of a career framework as a climbing wall — the structure of the wall represents the organization, the routes on the wall are the career pathways, and the handholds are key roles or critical experiences. The career framework provides employees with the information and guidance that enables them to seek out the experiences and learning that will help them progress their careers via routes that meet business needs.

The career framework provides HR with the foundation for talent management activities such as learning and development, selection and promotion, succession management and career mobility, and performance and reward management. It is the platform for workforce planning and analytics.

Organizations facing workforce challenges regarding hiring, promoting and retaining top talent can use career frameworks to mitigate those challenges. Equally, career frameworks can strengthen their ability to promote from within to reduce turnover expenses, leverage development investments, and keep both institutional knowledge and top performers in-house. To be successful, organizations need to make their career frameworks transparent and enable their line managers to have career development discussions with their employees.

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Attracting, retaining, developing, and promoting the right talent continues to be a challenge for HR and talent management professionals in an ever-more competitive job market. To retain high-potential employees, organizations are aggressively developing their succession and workforce plans for the next several years. Recruiting, interviewing and training costs can be high when bringing in new workers, and in many cases the local labor pool for needed skillsets is exhausted, further adding cost on sourcing and hiring nonlocal talent. Recent estimates put the cost of replacing an employee as high as 150% of an annual salary.1 To minimize these costs, many companies prefer to develop and promote from within, keeping institutional knowledge and top performers in-house, along with retaining investments made in L&D.

Ensuring Career Management meets the needs of today’s Experience Generation and employers’ needs for pipeline management has never been more critical. At the heart of the equation is a solid career framework and a partnership approach. In the “2015 Career Frameworks in Talent

• Change: Most organizations are planning a refresh of their current framework in the coming year. Refreshes can include updating job architecture, roles, levels, or job codes.

• Engage: Employers are seeing results from their career frameworks, including higher employee engagement levels, more internal promotions, and mitigated talent loss.

• Develop: Talent development, career pathing and performance management are the primary uses of a career framework.

• Educate: The greatest challenge to implementation is that managers lack the expertise to hold meaningful career development and rewards discussions with their employees.

I N T R O D U C T I O N

K E Y F I N D I N G S

Management Survey,” Mercer, a global consulting leader in advancing health, wealth, and careers, conducted a global study of HR Executives in partnership with Human Capital Media Advisory Group, the research arm of Talent Management and Workforce magazines, to explore organizational use of career frameworks. From the survey results we learned which organizations currently use this fundamental HR process, which don’t, and why. We examined organizations’ plans for their existing frameworks and identified key reasons companies use career frameworks and the outcomes they are realizing from this investment.

For more detailed information, see Appendix.

This survey received global participation from nearly 1,800 HR professionals at organizations in a range of sizes and industries and in over 100 countries.

M E T H O D

T H E 2 0 1 5 C A R E E R F R A M E W O R K S I N T A L E N T M A N A G E M E N T S U R V E Y P R O D U C E D T H E F O L L O W I N G K E Y F I N D I N G S :

1Boushley, H., and Glynn, S.J. (2012). There Are Significant Business Costs to Replacing Employees. Center for American Progress.

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• 50% of organizations currently use career frameworks in whole or part, and an additional 37% plan to implement a career framework.

• Top talent management challenges are decreasing internal recruitment costs, increasing employee engagement and retention (56%), and benchmarking rewards (56%).

• 63% of organizations are planning to change their human capital management (HCM) system and refresh career and job architecture simultaneously.

Globally only 50% of organizations have some form of career framework in place, and three out of four of those are incomplete (Figure 1). This partial framework approach is not surprising. Since frameworks are job-function specific, organizations often elect to focus efforts where they will reap the highest return, perhaps in a few critical functions or job families, adding new functions to their existing framework or refreshing content as the need arises. More than half (63%) of the organizations surveyed are planning to augment their career framework populations in the coming year, mostly by refreshing select functions (Figure 2).

• Top functional areas for a refresh focus include sales (36%), finance (29%), and human resources (28%).

• Top talent programs driven by the career framework are talent development (73%), performance management (62%), and career pathing (61%).

• 76% of organizations believe their career framework investment has paid off in terms of ROI.

Research also revealed that mature markets are less likely (only 40%) to have a career framework in place than those in growth economies. Anecdotal evidence suggests this may in part be due to the pivotal role that pipeline development plays in a growth climate. A 2013 study regarding career management revealed that managers overwhelmingly believed that employees were responsible for their own career management, while employees said just the opposite: it fell to the

K E Y S TAT I S T I C S

C H A N G E

T H E 2 0 1 5 C A R E E R F R A M E W O R K S I N T A L E N T M A N A G E M E N T S U R V E Y P R O D U C E D T H E F O L L O W I N G K E Y S T A T I S T I C S :

O N LY H A L F O F O R G A N I Z A T I O N S W O R L D W I D E H A V E A C A R E E R F R A M E W O R K .

F I G U R E 1C A R E E R F R A M E W O R K I M P L E M E N TAT I O N

12%38%

37%

13%

Full framework in place

Incomplete framework in place

No framework,plans to implement

No framework, no plans to implement

F I G U R E 2FU N CT I O N S N EED I N G A C A R EER FR A M E W O R K R EFR ES H I N T H E N E X T Y E A R

36%

Sales

29%

Finance

28%

Human Resources

28%

Marketing

25%

Supply chain

employers to provide some career guidance for the people they manage.2

This disconnect shows that although employees want the control over their own career progression, they equally want their managers to provide guidance. Career frameworks can provide both with the scaffolding needed to develop and grow within their organizations. Treating career frameworks as a set of evolving structural processes, HR professionals can make frameworks more useful and relevant.

The underlying philosophy of how organizations want employees to experience careers is also fundamental. There are three critical components: Transparency, Velocity and Control. Modern and effective career frameworks solve challenges often stemming from mismatched expectations between the employee and the employer on these dimensions. For example, Transparency for the employer may mean making job descriptions and career path information available, whilst employees may want information around non-traditional career opportunities and even the pay associated with a given role. Another challenge area is Velocity – the ability to progress careers at a pace that meets employees’ ambition and at a rate that is sustainable. Increasingly companies are identifying ‘progress’ roles, alongside ‘promotion roles’ or moving towards a philosophy based on the acquisition of ‘key experiences’ to more effectively pace movement. Control often has two facets: the first is defining who has that control, the individual or the managers? The second refers to movement, are organizations open to lateral and cross-functional career moves?

2Molina-Ray, C. (2013). Are We Playing the Same Game? Employee vs. Manager Perceptions of Education and Career Development. University of Phoenix. 3Smith, J. (2012). “New Research Shows Where Employers Find Their New Hires.” Forbes.

F I G U R E 3M Y O R G A N I Z A T I O N U S E S T H E F O L L O W I N G C A R E E R M A N A G E M E N T E L E M E N T S E F F E C T I V E LY

62%

50%

34%

30%

24%

24%

24%

20%

20%

19%

18%

Job posting of career opportunities

Toolkits/training for managers around career discussions

Job descriptions/role profiles for all roles

A career framework or structure that clarifies potential career moves

HR portals or other IT tools

Person/job fit assessment tools

Active talent mobility program

Descriptions of learning pathways

Career Coaches

Information on job families

Tools for employees to find out more about careers

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Organizations that are mature in their framework journey identified the internal posting of career opportunities as one of the most effective career management elements, closely followed by providing job descriptions for all roles (Figure 3). As internal sources, such as posting jobs to the company intranet, doubles the number of hires compared to external sources, incorporating them into a career framework positively contributes to retention and hiring goals.3

Tools for employees to find out more about careers and descriptions of learning pathways, on the other hand, were felt to be used less effectively. This suggests that organizations are better at describing roles, but less adept at describing movement, such as what are the feeder roles, necessary experiences or next roles for each position, which is what employees are looking for. In other words, whilst static descriptions work well, organizations need to incorporate movement into their career frameworks to be more effective.

Transparency, Velocity and Control are fundamental to a career philosophy

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The 2015 survey revealed that organizations are facing a number of talent management challenges in the coming years, from increasing employee engagement to decreasing recruitment costs and retaining talent (Figure 4).

To combat recruiting costs, employers are already committed to sourcing talent from within; 73% of companies plan to continue with their current emphasis of hiring internally over the coming year. Career frameworks facilitate this emphasis by not only allowing employees to see the path to promotion, but also by enabling managers to identify the current career levels of their employees and their potential career progression interests.

Depending on how their career framework is structured, organizations can link their career levels to different pay scales and rewards, providing transparency to employees between performance expectations, compensation and benefits. This transparency is another key to engaging and retaining talent, and already more than a third (38%) of organizations have salary grades aligned to levels and job families, and more than a quarter (28%) of organizations embed multiple salary grades at each career level.

The survey results highlight how implementing a career framework offers a single solution to talent issues organizations are facing. Higher employee engagement was cited as a major talent challenge addressed by a career framework, closely followed by the ability to identify internal talent, and mitigating risks in losing talent (Figure 5). These results emphasise the key role a career framework can play in an organization’s talent management.

Seventy-six percent of companies report that their career framework investment has paid off. Organizations yet to see ROI from their career framework may find that it is the communication channel, not the framework content, that is holding back returns. Results can be accelerated when managers and employees are engaged in career pathways through the use of interactive media, apps, and portals. Metrics that measure career engagement can also be an accelerator.

E N G A G E

E M P L O Y E R S A R E S E E I N G R E S U LT S F R O M T H E I R C A R E E R F R A M E W O R K S I N C L U D I N G H I G H E R E M P L O Y E E E N G A G E M E N T L E V E L S , A B I L I T Y T O I D E N T I F Y I N T E R N A L T A L E N T , A N D M I T I G A T E D T A L E N T L O S S .

The majority of organizations say their Career Framework delivers positive ROI

F I G U R E 4M Y O R G A N I Z AT I O N FA C E S / E X P E C T S T O FA C E T H E S E B U S I N E S S C H A L L E N G E S

56%

56%

52%

46%

Increasing employee mobility, engagement and retention and decreasing internal

recruitment costs

Benchmarking rewards and compensation

Accelerating talent strategies to execute on business objectives

Mitigating risk in talent scarcity by more effectively tapping internal labor

markets to build versus buy talent

F I G U R E 5W H AT C A R E E R F R A M E W O R K S D E L I V E R I N T E R M S O F B U S I N E S S R E S U LT S

43%

41%

31%

28%

30%

Higher Employee Engagement

Ability to identify talent from internal labor market

Mitigating risks in losing talent

Ability to provide workforce planning

More strongly articulated employee value proposition

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While career frameworks encompass a wide range of talent management programs, organizations overwhelmingly use their framework to drive talent development, career pathing/management, and performance management (Figure 6). Since career frameworks assist companies by making employees aware of promotion or a long-term career opportunities within the organization, it’s no surprise that career pathing is one of the main reasons organizations embark on developing a career framework.

D E V E L O P

T A L E N T D E V E L O P M E N T , C A R E E R P A T H I N G , A N D P E R F O R M A N C E M A N A G E M E N T A R E T H E P R I M A R Y U S E S O F A C A R E E R F R A M E W O R K .

F I G U R E 6T O P T A L E N T P R O G R A M S D R I V E N B Y C A R E E R F R A M E W O R K S

73%62%

61%

61%

59%

Talent development

Performance management

Career pathing/management

Succession planning

Compensation & Rewards management

At a regional level, Europe, North America and Asia Pacific organizations tend to primarily use their frameworks for Career Pathing and Talent Development purposes, whilst those in Africa, Middle East and Latin America tend to place more of an emphasis on Talent Development and Succession Planning. Mature markets, like North America, have tended to place greater emphasis on the linkages of their Career Framework to Rewards, but the study revealed that career pathing is now becoming a focus. This addresses questions such as which feeder roles are there for destination positions, what might be the lateral moves or progress roles needed for the employee to expand their skills?

Or what might a high potential career track look like? Another trend is a shift by some organizations away from the HR-centric language of core and technical competencies towards the more natural language of ‘behaviors’, ‘skills’ and ‘experiences’ with a focus on ‘generic technical skills’ and ‘portable skills’ that can be transferred across functions. This shift in language is part of the journey organizations are taking to more effectively engage, retain and develop their talent.

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Implementing a career framework is only the first step toward aligning the organization’s talent requirements with the employee career value proposition.

Once the framework is in place, both employees and employers must be trained in its use. Since more than half (63%) of organizations say they have recently made changes to their HCM system or plan to in the near future, organizations need to make their framework transparent and empower their line managers to have framework discussions with their employees. Such transparency and open communication are critical to ensuring organizations are able to meet their stated goals of developing and promoting top talent from within.

Training should begin with managers, who are often cited as barriers to promotion. An unaware manager is the top-cited challenge to implementing a career framework, outpacing all other challenges (Figure 7).

There are many possible reasons why managers might be a challenge to successful career

framework implementation. Managers may not have a complete pipeline to accommodate movement, or they may simply be unaware of the possible paths to promotion4. It’s not that managers don’t want to support their employees; lack of leadership support was a reported challenge at only 19% of organizations. Communication is the true issue here, both on the employer and employee side. When asked about their career framework philosophy, 83% of organizations agreed with the following statement:

“Our career framework provides the transparency with regard to what it takes to progress.”

But there is a disconnect between the philosophy and employee perception; although organizations may feel their career framework provides transparency, anecdotal feedback from employees revealed that they may not feel the same way. Simply having a framework in place isn’t enough; career frameworks must be relevant and useful to employees, and at the center of the organization’s talent, career, performance, and development activities and decisions.

Training is a good beginning step when implementing a successful career framework to educate employees and managers on the benefits it can deliver. For companies that don’t have a career framework in place, their employees may be unsure of how to get experiences and expand their capability. Or employees may be unaware of the right moves to make to advance their career. Many organizations that don’t currently use a career

E D U C AT E

T H E B I G G E S T C H A L L E N G E T O I M P L E M E N T I N G A C A R E E R F R A M E W O R K I S T H A T M A N A G E R S L A C K T H E E X P E R T I S E T O H O L D M E A N I N G F U L C A R E E R D E V E L O P M E N T A N D R E W A R D S D I S C U S S I O N S W I T H T H E I R E M P L O Y E E S .

4Vorhauser-Smith, S. (2012). “No Career Path, No Retention.” Forbes.

Our biggest challenge: “Lack of understanding from managers and communication to employees” —Survey respondent of 2015 Career Frameworks in Talent Management study, open comments.

F I G U R E 7B I G G E S T I M P L E M E N TAT I O N C H A L L E N G E S

61%

37%

29%

Managers lack expertise in holding meaningful career development and rewards discussions with employees

Employees lay greater emphasis on salary grades than career levels

Employees don’t have transparency with current and future career opportunities

framework cited the small size of their organization or the flat nature of their company as barriers to implementation. However, one of the advantages of a transparent framework is that it allows employees to see clearly which development actions need to be taken in order to progress their careers.

Forward thinking companies are equipping their employees with digital tools which enable the organization to break down the communication barriers between employer and employees. They are providing employees with a line of sight into career opportunities and effectively empowering them with the knowledge of how to develop and advance.

The research reveals that communication is one area where organizations struggle to meet expectations. There are a range of interactive tools available on the market to address this: from simple ‘click and explore’ decks, customized and branded to reflect a company’s career philosophy; to mobile apps like Mercer’s Career View, which takes influence from social media and allows the user to “zoom in” on a particular role, evaluate their skills set against its requirements, compare it to others and then map out desired career journey. Micro sites and HR portals like Mercer Belong can take this one step further by addressing the full value proposition of health, wealth and careers – with content driven by preferences/interests to deliver on an individualized value proposition (IVP). However, whichever tool is used, technology is only an enabler, it is how this is weaved into the cadence of talent processes and the skill of manager’s in utilizing this in career discussions that matters. Technology and Big Data are also beginning to be used to trigger when career conversations might be most impactful in an employee’s journey.

C O N C L U S I O NWhen properly implemented, career frameworks build the future talent pipeline and provide a compelling employee experience that retains top talent. To best succeed, frameworks must not be static; they should be evaluated and refreshed as needed to keep pace with changing workforce conditions. By educating managers about career paths and educating employees about development and progression opportunities, organizations will have a more engaged workforce and a healthy ROI on the framework in the form of reduced hiring and recruiting costs.

Simply having a framework in place isn’t enough; career frameworks must be relevant and useful to employees, and at the center of the organization’s talent, career, performance, and development activities and decisions.

Digital tools enable organizations to break down communication barriers

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A B O U TM E R C E R Mercer is a global force of over 21,000 unique individuals, operating in over 130 countries, with a passion for enhancing the health, wealth and careers of 110 million people worldwide. We’re united by a single idea – to make lives better tomorrow through actions we can take today. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy, and human capital.

For inquiries contact Ilene Siscovick, Partner and Global Careers Solution Leader ilene.siscovick@mercer.com

T A L E N T M A N A G E M E N T Talent Management provides in-depth information to talent management and HR professionals who are charged with the design, development, and execution of integrated talent management programs that encompass recruitment and retention, employee assessment and evaluation, compensation and benefits, performance management, employee learning, workforce development, and succession planning.

W O R K F O R C E Workforce is a multimedia publication that covers the intersection of people management and business strategy. Our community of senior-level human resources executives and C-level officers are the key decision-makers on talent management matters in the 2,500 largest corporations in America. They read us for our editorial focus and relevance to help them improve their business — and their bottom line — through effective management of the workforce. While employees and executives often bemoan the bureaucratic nature of HR processes, companies increasingly realize they need to be smarter about the ways they attract, retain and train their workforce. Our content helps HR professionals approach their jobs from a more strategic, big-picture, business-results perspective.

H U M A N C A P I TA L M E D I A The Human Capital Media (HCM) Research and Advisory Group is the research division of Human Capital Media, publisher of Chief Learning Officer, Talent Management and Workforce magazines. The Research and Advisory Group specializes in partnered research solutions — customizable and proprietary deliverables that integrate seamlessly with existing sales and marketing programs. Leveraging our access to senior-level decision-makers and proven HR industry expertise, we undertake market and thought leadership research in the human resources industry. Creating custom content and presenting thought leadership research are all part of the Research and Advisory Group’s focus.

If you have any questions, contact Sarah Kimmel, Vice President of Research and Advisory Services: skimmel@humancapitalmedia.com.

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C O N T R I B U T O R S

K A T E B R A V E R Y

M A R Y A N N S A R D O N E

S U E F I L M E R

P A T R I C K S H A N N O N

T A M A R H U D S O N

J A C K S O N K A M

I L E N E S I S C O V I C K

G E R A L D P U R G A Y

S U R V E Y D A T E SMarch-May 2015

D E M O G R A P H I C I N F O R M A T I O N1,785 respondents from more than 100 countries, representing more than 19 different industries.Organizational level of respondents: 53% at director level and above

O R G A N I Z A T I O N A L S I Z ESmall (less than 1,000 employees): 43%Midsize (1,000–10,000 employees): 33%Large (more than 10,000 employees): 24%

G E O G R A P H I C D I S T R I B U T I O NGlobal organizations: 40%Multinational/regional organizations: 31%Local/domestic organizations: 29%

T O P G E O G R A P H I C R E G I O N S R E P R E S E N T E DAfrica: 10% Asia: 19% Australia/New Zealand: 2%Europe: 17% Middle East: 4% North America: 36% South America: 13%

T O P I N D U S T R I E S R E P R E S E N T E DServices: 17% Manufacturing: 11%Financial Services: 10%High tech, telecommunications: 9%Consumer goods: 8%Energy, mining, utilities: 7%

*Note: Figures may not total 100% due to rounding

A P P E N D I X

For further information, please contact the Human Capital Media office or visit our website at:www.humancapitalmedia.com

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