KEY POINTS:
Managers doing all they can to satisfy the needs of career-hungry youngsters in today's flat management structure have been thrown a lifeline by psychometric testing company SHL.
Its director of professional services, Dr Ray Glennon, says the corporate ladder has become redundant and that vertical promotions are now less frequent and management positions more demanding.
Glennon says that as New Zealand businesses operate with flatter management structures, employers need to build sideways careers to attract Gen-Y professionals.
"Since the 90s, New Zealand businesses have been moving away from hierarchies that contain several layers of management through which a talented professional could be promoted," says Glennon.
"The size of the New Zealand market means many professionals are generalists working across various functions. Therefore, vertical promotion is not necessarily available, let alone sought-after," he says.
Meanwhile, the appetite of staff looking to be advanced or stretched is no less than it was in the past. So what are companies to do now there are fewer management layers?
Glennon believes employers need to offer sideways promotions, such as moving staff into another department or expanding an existing role.
"Sideways promotions help retain and motivate the employee while preparing them to step into a broader senior management role in the future."
Gen-Y watcher and commentator James Adonis says getting staff is only the start of talent retention problems.
"Companies will offer extraordinarily high salaries without realising that money attracts people to organisations, but doesn't actually keep them there - unless you increase it by 20 per cent every three months," says Adonis.
"Employee turnover rates, already on the increase, will accelerate even more. And it's likely to be the most talented people who go.
"With the cost of each resignation double an employee's annual salary, costs will soar."
Adonis cites research by PricewaterhouseCoopers that reveals that not only is it difficult to find talented people, but 48 per cent of employers are struggling to even hang on to their existing talent.
It's the hanging on to talent that Glennon says could be addressed with 360-degree staff feedback combined with psychometric assessments to create a comprehensive picture of an employee's capability, preferred work style and motivation.
He says 360-degree feedback identifies how the employees performance is perceived by their direct reports, colleagues and managers.
"Only by truly understanding the individual and the broader workplace culture, can employers identify how to provide staff with motivating career paths," says Glennon.
Most organisations thoroughly assess external candidates but fail to apply rigour to internal placements.
Sideways career moves, as a part of a tailored career development plan, can also help prevent star performers from being promoted out of their depth.
"Many employers mistakenly assume a high-performing employee will also be a high-performing manager."
Rather than just promote and hope for the best, Glennon says sideways promotions provide opportunities to train and develop future leaders with less risk to the organisation.
He says 360-degree feedback could help employers identify the right carrots to reward the right employees.
Glennon says employers need to adjust their management style to take into account each employee's personality and motivation. "For instance, someone who is motivated by working in harmony with a team may find being asked to compete for rewards against that team uncomfortable.
"Similarly someone with a young family may not want a role that requires a lot of travel. The current skills shortage has placed talent management and retention as two of the biggest challenges facing businesses. Sideways promotions are destined to play a significant role in the future."
* Contact Steve Hart via his website at www.stevehart.co.nz
- Detours, HoS
