performance

Like most small companies, we got career progression wrong. Here's what it cost us. (1/2)

CharlieHR was built to be a business that cared deeply about the career progression and personal development of its team. It failed to live up to that promise. Here’s what went wrong.

“If your people aren’t growing, they’re leaving”.

This is a favourite expression of mine. Everyone at Charlie has probably heard me say that over a hundred times. When we started Charlie, we built the business to put a high priority on the progression of each member of the team.

At least, that’s what I told myself.

Over the last two years, ten people have left Charlie. For two of them, the way we handled career progression was a leading cause of their departure, and I’m pretty confident it was a contributing factor for others.

Meanwhile, I had reason to believe that the way we handled career progression was negatively affecting the morale and motivation of the team. I felt like I was giving inadequate answers to questions about progression, and – at the risk of sounding paranoid – I started to pick up a degree of frustration about progression in people who had been here a while. We’d lost that scrappy, startup-y energy, and people were at risk of feeling like they’d stagnated.

I just ended up with a lack of motivation. That feeling that you are stuck in a bit of a limbo with a career that has the potential to not really be going anywhere in particular.  - Jess Noel, Customer Operations Associate

How CharlieHR used to handle progression

Progression is a blanket term covering three things: promotions, pay rises and personal development.

Here’s how – until very recently – we handled career progression. If you work in a small business, it will probably sound pretty familiar.

  • Every month, each employee had a scheduled, informal meeting with someone more senior to discuss their personal development.
  • Once a year, my co-founder Rob & I would decide who should get a pay rise. We’d then hold meetings with everyone to explain why they would or wouldn’t be getting a pay rise.
  • Promotions happened when there was an urgent need for a role to exist. This happened very rarely.
  • Anybody could book a one-to-one meeting with me at any point to discuss their personal development.

Looking back, our system focused mainly on personal development. We had no defined process for pay rises, when promotions would happen, or what roles people could be promoted into.

This isn’t actually a huge problem for small, fast-growing startups. This is because progression can occur naturally from the business growing. With no one else available to take on new challenges, employees have the opportunity to grab roles and responsibilities as they appear.

But as we grew to 20 people, cracks began to show. We felt more like a “real business” now, but we were still using the same informal, startup-y progression system.

The more I talked about how important progression was to me and to Charlie, the more hollow and hypocritical it felt. There simply wasn’t any clarity. We weren’t providing our team with consistent or clear answers to important questions:

  • What do I have to do to progress? What standard do I need to meet to get promoted?
  • When will I progress? How long do people expect me to stay in this role? When will I be considered for promotion?
  • When do I talk about progression? What conversations and meetings are “appropriate” places to discuss my development and progression?
  • Where can progression lead me? What roles and responsibilities can I grow into?
The landscape was very unclear; each time you felt you were progressing in your role, the conversation to uncover how you've improved had no underpinning – it was all very subjective. - Matt Grannell, Product Designer

So what was going wrong?

Cause 1: Managers were responsible for progression… but they didn’t have the answers

Our system instructed people to talk to their managers when they had questions about progression. But we hadn’t given the managers any answers to those questions.

Meanwhile, people in senior roles –who didn’t have managers – were even more in the dark.

Was "Head of Engineering" the end of progression for me? If not, what was the next step and how could I make it? - Alex Balhatchet, Head of Engineering

The lack of guidelines opened the door to inconsistency, with different teams handling progression in different ways. That’s a problem: it’s discouraging to feel like you’re having a harder time progressing than your colleagues.

I wasn't sure what my options were in terms of career progression at Charlie. As the only Customer Success role in the company, I didn't have a clear path of what was expected from me to progress or how my role might develop. - Lydia Day, Customer Success Associate

Cause 2: progression was often framed as being about “becoming a manager”

Many small businesses fall into this trap. We talk about progression using the language of management, as if the only path towards seniority is managing an increasing number of employees. This pushes people into managerial roles that they’re neither interested in nor suited to, or stops people who aren’t strong managers from progressing.

People management is an important path towards seniority, but it shouldn’t be the only path. Some people want to become a senior “individual contributor” – someone highly skilled in a single field, but who doesn’t do any people management.

Senior individual contributors are extremely valuable, and businesses need to provide paths for people to grow into these roles.

“People management isn't (and shouldn't be) for everyone, but if it's the only way to progress, many companies fall into the trap of promoting people into roles they're ill-suited to and totally ill-equipped for.”  - Tom Clarke, Head of Product

Frustratingly, there were positions at Charlie for senior individual contributors. We just weren’t communicating what they were, or how you could get there.

Cause 3: seniority wasn’t tied to value creation and output

Promotions and pay rises should be based on the value they create. It’s never possible to do this perfectly, but you must at least try to be objective about it – by defining how promotions work, and what conditions someone must fulfil to be promoted.

Without that objectivity, other factors ended up influencing decisions about progression at Charlie. How long someone had been here, or instinctive feelings about whether someone was “ready” crept into decisions about whether someone got a promotion or a pay rise.

Between "junior" and "senior" developer titles there was this huge gap just called "developer" which seemed to take forever to cross. My team wouldn't know whether they were close to junior, close to senior, or somewhere in between. And it wasn't clear how to make progress - what made somebody senior or not? - Alex

What was this costing us?

So far, I’ve talked about a lot of emotive and social issues: people feeling like they were stagnating, a lack of clarity, and a general failure to answer some questions related to progression. So was this actually a pressing problem for Charlie? And was it creating a measurable cost for the business?

The, answer, without a doubt, was yes. The way we treated progression was causing a buildup of some serious, costly problems in hiring, retention and motivation:

Hiring

Hiring is never easy and rarely cheap, but we were making it harder and more expensive. Without a strong, structured understanding of career paths, we had a problem with internal alignment. People at Charlie sometimes found themselves with different ideas about what a potential hire would be paid, what experience they needed to have, and how they’d fit into the team.

Retention

I’ve already spoken about this: two people left because of our failure to show them meaningful progression. That’s not a huge number – but ideally, that number should be zero. If someone is willing to join our team, spend a large portion of their life in our office, and stick with us through the highs and lows of building a small business, then we really should be able to offer them a compelling career progression path.

In particular, I worried about senior roles. The departure of someone in a senior role is a massive challenge, both professionally and personally. They’re probably someone you’ve developed a close relationship with, and they’re going to be integral to how your company functions. They’re exceptionally hard to hire for, and replacing their niche expertise and in-depth understanding of your business is near-impossible.

Motivation

People may not have been leaving the business in droves – but some of them weren’t exactly happy about sticking around either. A feeling of stagnation frustrates people and generally slows them down. It’s hard to throw yourself into your job when you don’t have a clear set of long-term goals.

I just didn't really know what I needed to do to get to my next salary bump or title change. It really sapped all the motivation out of me – what was I even supposed to be working towards? - Jess

Motivation is directly linked to performance – and performance is crucial. I’d say that the biggest factor of whether a business succeeds or fails is the performance of the team.

So – what was the solution?

If we wanted to fix this, we needed a career progression framework – a system which:

  • Defined every possible role at Charlie
  • Showed everyone at Charlie what roles they could progress to
  • Stated what they needed to do to get there

Monzo and Buffer’s work on career progression frameworks do a great job of explaining this concept, and were a big part of my realisation that this was something we needed at Charlie.

A career progression framework would:

  • Give managers guidelines so they could answer key questions about progression
  • Define a progression path for people who weren’t interested in being managers
  • Provide objective standards to measure whether someone was ready for promotion
  • Bring clarity and consistency to the team

In short, it would solve every problem I’ve outlined over the course of this article.

Building it wasn’t going to be easy, quick or cheap. We’d have to assess (and potentially modify) the entire team’s roles, titles, responsibilities, salaries and career paths. But with our ability to hire, our retention, and the motivation of our team on the line, I was willing to make that investment.

Moreover, we had to do it ASAP.

We knew we were about to make a lot of new hires. We wanted to welcome them into an organisation offering strong, structured progression. We also realised that building the progression framework would be considerably harder after adding dozens of new people to the team.

The final push we needed came from conversations with businesses that were a few years further down the line, who had successfully traversed the awkward post-startup stage of growth. We asked them what they wished they’d done earlier. The near-unanimous answer: “built a clearer structure for progression”.

In this article, we'll tell you how we did it.

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