CDI Corporation

The Link Between Career Pathing and Performance Management

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Often employees leave their jobs because there is no clear path for them to advance, or they are not sure how to rise to the position they desire. Career pathing is a great way to increase employee retention and grow talent organically, because it provides both employees and employers with a clear roadmap, outlining what it takes for workers to move from their current position to where they want to be. It also empowers employees to take ownership of their career performance within the company and aligns their career goals with the strategic goals of the organization. This not only helps the organization achieve its goals, but also helps the organization in the following ways:

Differentiate the company from competitors. Organizations that do not invest in learning and development of their human capital lose valuable permanent and contract candidates to their competition. Employers can effectively differentiate themselves from competitors by investing in their employees’ career development. Even a relatively small employer investment, such as implementing a mentoring program or boosting training opportunities, has a positive impact on loyalty. “Today’s workforce has more career choices,” says Bill Hyman, chief human resources officer for CDI Corporation. “An organization that can demonstrate its commitment to helping their employees advance their careers, is making an investment in its ability to attract the best candidates and in its future success.”

Retain key workers. Many employers in the U.S. are confronting shortages in areas where they most need to attract and retain experienced workers to their blended workforce. As a result, they are increasingly concerned about losing high-potential talent, and failing to bring on board needed, supplemental, contract employees. The cost of voluntary turnover can be significant – loss of productivity, lost institutional knowledge and relationships, and added burdens on employees who must pick up the slack.

To prevent this, organizations have to identify workers who are central to the execution of business strategy and then develop or update retention plans to meet the needs and expectations of these employees, particularly those who drive a disproportionate share of key business outcomes or are in short supply in the labor market. Providing identifiable career paths is an important aspect of retention plans, along with coaching and mentoring employees with high potential and moving proven performers into new roles that fit skills developed over time.

Keep Millennials. Employees’ views of work and growth opportunities vary by generation. Millennial workers, for example, value career pathing more than any other generation. CDI subsidiary
MRINetwork revealed in its 2017 Millennial Hiring Trends Study that more than half of Millennials (53 percent) said career pathing has the most impact on their decision to stay with their employer. This process is not driven by the manager, but with the employee taking charge of their performance review and setting their desired career path. Once goals are set with the manager, successful completion now rests in the employee’s hands. The path is now clear for what they need to do, in order to be promoted, receive a pay increase, or extend their assignment.

Revitalize the performance management process. As part of the career pathing strategy, the annual review is being reinvented to serve as an efficient, business-focused process that improves employee engagement and drives results. Goals are still agreed upon by employees and managers, but it is incumbent on employees to propel their careers, and manage their performance, not solely the manager.

“This approach means that performance discussions become an integral part of the performance management process,” says Hyman. “Both the employee and the manager have a role in setting the career path, which contributes to a positive company culture.” Achieving this alignment requires companies to make changes in their performance management process.

Getting starting requires you to:

  • Simplify – get rid of unnecessary, time-consuming, paper-filled steps.
  • Ensure that your company’s strategic goals match up with your performance management philosophy.
  • Build a new performance management culture that encourages ongoing feedback and continuous development from both permanent and contract employees.
  • Empower managers to recognize and reward employee performance throughout the year
  • Disconnect performance conversations from compensation conversations, which often block an employee’s ability to hear and adopt the feedback that can lead to improved performance.

Career pathing that benefits both the company and its blended workforce requires time and commitment on both parts if it is to succeed in the long term. The payoff for a fully realized process, however, is a happier, more manageable, easier-to-retain workforce because employees who believe their employers make effective use of their talents and abilities are overwhelmingly more committed to staying on the job.

Recent CDI Analysis

“Candidates are evaluating potential employers at every step of the interview process, observing not only what is being said, but also what the organization reveals about the company culture.”

Bill Hyman

Chief Human Resources Officer

CDI Corporation

Employment Situation (U.S.)

Just two months into 2017, employment data is ushering in business confidence and surpassing expectations for steady job growth. In February, employment in nonfarm payroll grew by 235,000 – with the largest increases seen in construction, private educational services, mining, healthcare and manufacturing, according to the Employment Situation Summary released by the Bureau of Labor Statistics (BLS).

Gains in the construction sector rose by 58,000, particularly for civil engineering construction and specialty trade contractors. The BLS also noted that, over the past six months, 177,000 construction jobs have been added.

The uptick in professional and business services roles continued, with 37,000 new jobs added.

There was very little change in other major industries including wholesale trade, transportation and warehousing, information, financial activities and government.

Unemployment rate remains relatively unchanged

According to the BLS report, the unemployment rate changed very little for February 2017 resting at 4.7 percent. However, it is slightly less than it was at this time last year, when it was 4.9 percent.

These findings echo the data released in a report earlier this week from payroll processing company ADP. The research showed that an explosive 298,000 private-sector jobs were added last month, much of which were attributed to professional and management services, as well as construction and manufacturing. The reading was especially promising because it suggested a healthy employment increase spanning the economy.

According to LifeZette, January and February represent the two strongest consecutive months for job growth since August and September 2015. In January, the U.S. labor market added 227,000 jobs, surpassing the forecast of 180,000.

With the labor force participation rate being 63 percent and the employment-population ratio 60 percent, February remained pretty steady from the previous month – with notable gains in certain areas.

"February proved to be an incredibly strong month for employment with increases we have not seen in years," Ahu Yildirmaz, ADP vice president, said ahead of the Employment Situation Summary release. "Gains were driven by a surge in the goods sector, while we also saw the information industry experience a notable increase."

In light of the favorable February jobs report, it is very likely that the Federal Reserve will raise interest rates during next week’s meeting. Diane Swonk, founder and chief executive of DS Economics, told the New York Times, “They’re ready to go,”  referring to the central bank’s expected vote next week to raise rates from their historically low levels.

The full Bureau of Labor Statistics report can be downloaded by
clicking here.

Employment Situation (Canada)

Employment in Canada grew by 15,000 in February 2017 and the unemployment rate dropped by 0.2 points to hit 6.6 per cent. That unemployment rate was last seen in January 2015, a low that had not previously been reached since October 2008, according to the Labour Force Survey released by Statistics Canada. Part of this positive reading is due to more people working full time. Last month, there was about an 105,000 person increase in full-time employment, marking the second significant spike in this category since December.

The employment data signals a healthy national labour market that exceeded the expectations of analysts, The Toronto Star reported. Economists forecast a 2,500 job gain and an unemployment rate of 6.8 per cent.

Most of the employment growth was fueled by a number of sectors:

  • The wholesale and retail trade sector added 19,000 jobs in February, continuing its steady monthly increase and year-over-year growth of 1.3 per cent.
  • Public administration grew by 12,000, totaling 65,000 gains over the year – with an increase in employment at the federal, local, municipal and regional levels.
  • For the second month in a row, transportation and warehousing grew, adding 8,800 jobs in February – a 3.8 per cent increase from the year before.

Employment in private and public sectors remained relatively the same, though the number of private-sector employees grew by 2.2 per cent to total 253,000 on a year-over-year basis. Most of the 78,000 gains in the public sector were in public administration.

Although Canadian unemployment dropped to the lowest in two years, the steady and strong job gains may not necessarily mean rates are expected to rise in the immediate future, CTV news pointed out.

"The Canadian economy is seeing a return to sustained healthy growth, which should absorb remaining slack and lead to eventual inflationary pressures," TD Economics Senior Economist Brian DePratto told the source. "This process will take time, however, and the Bank of Canada will want to continue supporting it and will likely be reluctant to raise rates until well into next year."

Canadian ES Report:
Labour Force Survey, February 2017

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