Responsibility for career management is gradually shifting from the organization to the individual. Nevertheless, it is interesting to look at the benefits of managing careers from the organization’s perspective. To which extent can firm performance be explained or improved by organizational career management? Which dimensions of career management are crucial in this process? Based on a survey of Antwerp Management School and SD Worx, we will highlight how career management can improve firm performance.
Organizational career management benefits for firm performance
Many organizations tend to doubt the necessity of elaborated organizational career management, because it implies a major investment of time and money. Moreover, with career choices becoming a growing individual responsibility, the outcomes of the investments are increasingly uncertain. Many theories, however, argue that investing in the firm’s human capital and the individual career development of employees has long-term benefits for the organization as well as for the individual. When put together, these theories all stress four crucial dimensions in organizational career management: career practices, development I-deals, individual responsibilty, and consensus among management and Human Resources.
Because of their seemingly significant importance, these aspects and their impact were also the central question of the career management survey that was launched by Antwerp Management School and SD Worx as part of the Chair “Next Generation Work: Creating Sustainable Careers”. The survey took place in spring 2012, with more than 780 organisations taking part in it. The four dimensions of career management were all surveyed individually, questioning the sufficient and necessary nature of the four conditions. Because of its large scale, the survey led to some interesting and relevant conclusions in terms of organizational career management and its effect on firm performance.
1. Career practices
Supportive and developmental career practices are a first important factor in career management. Due to the changing nature of contemporary careers, organizations are required to move away from the traditional top down view on career planning, with practices such as career ladders and promotion paths, towards more supportive and developmental practices. These practices include inducements to developmental initiatives and possibilities for internal promotion. Career studies have shown that employees who perceive that their employer invests in their career development, report higher levels of organizational commitment, an individual attitude that is considered important for explaining organization-level outcomes.
2. Development I-Deals
The growing need for flexibility in careers also requires more flexibility in organizational career policies. Employees are becoming more proactive in redesigning their jobs to align them more with their own competencies, motives and passions. This can be achieved by so-called I-deals, personalized agreements between individual employees and employers. Development I-deals, with regard to career development, can be important tools for creating more flexibility in the organization, for example by offering extra learning opportunities and deviating career steps. This way the individual career needs can be aligned with the organizational needs in a flexible and individual way, instead of sticking to an organizational system based on long-term predictability and a “one size fits all” approach. Studies have pointed out positive outcomes of investing in I-deals on both the individual and the organizational level, such as expected retirement age and affective commitment to the organization.
3. Individual responsibility
With individuals playing an increasingly active part in their career, the individual responsibility has become an important factor in career management. It is interesting to not only view this from the individual’s perspective, but from the organization’s point of view as well. To which extent should self-directedness be expected from the organization’s employees? And which benefits does this offer? Many organizations seem to base their career management approach on the assumption that “the employee is in the driver’s seat”, and therefore don’t pay enough attention to the active role the individual can play in the process of career management. Moreover, individual responsibility seems to be associated with lack of loyalty and results in a fear of losing valuable employees who could pursue their career outside of the organization. Thus the changing career landscape brings uncertainty for employers. A high number of studies, however, pointed out that self-directedness can give positive outcomes like career success, marketability and organizational commitment.
4. Consensus among management and HR
The increasing individual participation in the process of career management requires employees to frequently interact with their supervisors, to receive career support, negotiate I-deals, or share their expectations regarding their career development. In these daily interactions we can see the process of translating human resources policies into practice. Line managers play a crucial role in this process, by communicating with their employees about their career prospects, and reporting this information to the human resources management. This mediatory role of the line manager is impeded by the shift from long-term-based employer-employee relationships with predictable career paths to much more individual and uncertain relationships. For this reason, an efficient organization needs a strong overall human resources system, and most of all, a consensus about organizational career management between line managers and human resources management. The outcomes of investing time in such a consensus are positive for both employees and employers, positively influencing for example work satisfaction, intention to stay, and overall efficiency.
Findings
The sustainable career survey of these dimensions led to six conclusions.
First, we can conclude that a new approach within the research of career management can lead to new ideas and conclusions. In our survey, we introduced a new theoretical framework, consisting of the four dimensions, and replaced the traditional top-down approach with a focus on the individual as the central actor. Moreover, we moved away from the narrow view on career management practices, drawing attention to policies and flexibility as well.
Secondly, we did not solely describe the four key dimensions and their linear associations, but also took into account their causal complexity. We discovered three possible pathways, all leading to the outcome of financial performance. The three pathways, consisting of different combinations of the four dimensions, are all different but sufficient to achieve better performance.
Third we can see that both the more linear approach of the survey and the configurational one, taking into account the different dimensions and their complex causal assocations, suggest that investing in career management does not only contain benefits for the individuals themselves, but on the organizational level as well.
Fourth, we see that the dimensions of individual responsibility and I-deals are present in all three solution pathways. This shows that they are basic ingredients for today’s careers, and points out the relevance for studying the dimensions on both the individual and the organizational level.
Fifth, it turned out that consensus between management and HR within a company is not a necessary nor sufficient condition for improved firm performance. However, with the growing emphasis on line managers as career coach and the absence of centralized HR guidelines to career practices, a consensus with the managers and a clear HR strategy are required.
Sixth, in our survey we also mentioned the organizations’ Human Capital Compositions, consisting of high-value and high-unique employees. Although further research to these aspects is required, we can clearly see the importance of their role in the impact on financial firm performance as well.
Improving an organization’s career management in a flexible, individual and contemporary way thus requires an investment of both time and money, but as our survey has shown, the outcomes are not only beneficial for the individual, but for the organization as well, increasing both the employees’ work satisfaction and the organization’s overall firm performance. Antwerp Management School and SD Worx have launched a second edition of this survey, we would like to invite you to take part in it as well.
