Operationalizing a Clear Career Path at Your Business

This blog was written by Riddhima Sharma of the Good Jobs Institute for the Small Giants Community blog. To learn more about the Good Jobs Institute, click here. 

Frontline jobs in retail and restaurants are often viewed as a “good first job,” not a career. Yet top retailers like Costco and QuikTrip build strong career paths because they believe it helps their teams and their performance. Targeting 100% promotion from within for store and field management positions ensures their managers know the company, know the work, and know the customers, so they can quickly contribute to managing and growing the business. It also improves morale and reduces turnover by ensuring employees that if they do a good job, there are opportunities to gain more experience, responsibility, and pay. 

Yet many companies struggle to build robust career paths in the face of high turnover and with a lack of strong leadership talent. Developed by Professor Zeynep Ton at the MIT Sloan School of Management, the Good Jobs Strategy can address these common challenges and help businesses of all sizes improve their ability to win with customers through a stable and knowledgeable workforce. This management framework combines operational choices and a strong investment in frontline talent to enable a productive and high-performing workforce.

What Drives Low Internal Promotion

While Costco and QuikTrip’s decision to invest in internal career paths by promoting entirely from within may seem obvious on paper, many companies struggle with effectively designing and implementing an internal career path that delivers high quality managers and low employee turnover. It can be challenging to have multiple leadership roles as stepping stones to store management (for example, QuikTrip has four assistant manager roles supporting the store manager), invest in meaningful pay differentials to ensure that more responsibility is compensated with more pay, and provide the training and performance management infrastructure that enables their managers to effectively create a strong promotion pipeline. 

At the Good Jobs Institute, we work with companies in operationally and labor-intensive industries like food service, retail, call centers, and pest control, and help them to make changes to their system to drive lower employee turnover and stronger financial performance. When discussing internal career paths, business leaders often point to a lack of qualified employees to promote or even a lack of interest from employees to be promoted. 

Common barriers to an effective internal career path include: 

• High turnover: When employees are leaving often, and tenure is low, then companies are less likely to have qualified candidates for manager roles. In this environment, we often see what one company called “desperation hires,” where they would promote anyone who was available to become a manager, even if that person was still learning the entry-level role and frequently failed to meet performance expectations. High manager turnover is another challenge here: if employees see the manager role as a revolving door, they might be less likely to want to move up.
  
  
• Chasm between roles: The difference between an hourly frontline role and a management role can be difficult to manage. One convenience store we worked with tried hiring their Night Managers from within, but many would ask to be demoted. It became clear why this was the case: the Night Manager was often alone, with no coaching or supervision, so they felt overwhelmed with the new responsibilities and had to handle their most difficult shift with the most inexperienced staff.  
  
  
• Insufficient pay differentials: When employees are only offered a few more dollars per hour for significantly more stress, it might not be worthwhile. At one retailer, we met a salaried manager who was often working 70 hours per week, sometimes netting lower pay than her minimum wage employees. Later she asked to be demoted.
  
  
• Lack of time and tools for managers to develop people: At a ghost kitchen we worked with, leadership was adamant that the most important priority for managers was to coach and develop their people, so that they could perform well and identify future managers. However, when they began investigating how their managers were spending their time, they realized that almost 70 percent of their shift was devoted to administrative paperwork and fielding requests from the home office.
  
  

How the Good Jobs Strategy Can Help

The Good Jobs Strategy system enables companies to address these challenges and ensure that those investments in talent support business goals. The four operational choices – focus & simplify, standardize & empower, cross-train, and operate with slack – are principles which enable companies like Costco and QuikTrip to create a highly productive and motivated workforce that can deliver value for customers. These operational choices also support their ability to promote from within. 

• Focus & simplify: When companies reduce complexity and remove non-essential work like admin work, managers have time to develop their people and build a leadership bench. Several convenience stores we have worked with have been focused on streamlining administrative work like invoicing, scheduling, and communications so that managers can spend more time developing team members. To begin focusing and simplifying, we encourage many of the companies we work with to answer the following questions: What is the value-add work that I want my teams to be focused on doing and what is getting in the way?
  
  
• Standardize & empower: Creating clear performance standards and management practices enables employees to know what good looks like so they can be trained well and held accountable. As part of instituting a strong career path in its call centers, Quest Diagnostics also implemented a new performance management system that outlined clear standards for success at the company. Aligning performance standards with the work you want your teams focused on and the outcomes that you want to deliver, while empowering your teams to meet those standards, can establish and support a high-expectations team environment.
  
  
• Cross-train: By training employees to be familiar with more parts of the business, they are better prepared to take on new leadership roles. One bakery we worked with created a cross-training skills checklist and linked certification of cross-training skills to higher pay, directly supporting a career path at the company. To know where to cross-train, we encourage companies to examine different roles of the business. What parts of the business should someone understand to be a good manager? What roles require deep specialization and may not lend themselves to cross-training?
  
  
• Operate with slack: By staffing higher than expected labor hours, managers are spending less time firefighting and can better hire and develop their teams. Ensuring that you have allocated sufficient hours for training and development to schedules ensures that managers can adequately onboard and support their team members. 
  
  

The Good Jobs Strategy System 

Each of these operational choices is complemented with a strong investment in frontline talent to recruit and retain the right people. Without investment in employees that meet basic needs – through pay, benefits, training and development – businesses are often faced with high levels of turnover that undermine their ability to hire, retain, and develop talent effectively. Additionally, high turnover makes each of the operational choices outlined above even more challenging. Businesses should think strategically about how they can leverage hiring practices, wages and benefits, scheduling, and career paths to ensure that their teams can perform with expertise and efficiency. To help you make the right operational decisions, check out these Good Jobs tools. 

From our experience at the Good Jobs Institute, strong internal career paths are not only a tool for traditionally higher-wage industries, but they can also support high-performing frontline teams in industries like retail, hospitality, and customer service, if you have an operating system designed to set teams up for success.