Toolkit: Building Dynamic Employee Career Paths and Ladders

Advance your workforce planning and improve retention with structured career development. Explore the benefits of clearly defined career paths, HR best practices, and different career advancement models in this toolkit.

Opportunities for career growth are the foremost driver of employees' well-being in the workplace. Employees are generally more engaged when they believe that their employer supports their professional growth and provides avenues to reach individual career goals that align with the company's mission. They are also more likely to quit without career development opportunities. Nearly a quarter of employed adults in workplaces with highly rated work culture cited a lack of career opportunities as the top reason they were seeking to leave in the SHRM State of Global Workplace Culture in 2024 report.

A career development path provides employees with a clearly defined, ongoing strategy to build their skills and knowledge, master their current jobs, and become eligible for promotions or transfers to new or different positions. Training programs to support career progression were cited as HR professionals' top way to strengthen organizational competitiveness in the 2025 SHRM State of the Workplace report.

In today's workplace, individuals are more in charge of their career trajectory. Traditional company-defined vertical career ladders — the progression of jobs in an organization's specific occupational fields ranked from highest to lowest based on level of responsibility and pay — still exist, but they will continue to wane in an environment where:

The labor force sees continuous, dramatic changes, particularly as the rise of AI disrupts traditional workplace career paths.
The way work is organized and performed continuously evolves and changes.
Jobs are broken down into elements, which are then outsourced.
Employees work alongside contractors who do not have career paths or logical career progressions and may be harder to motivate.
Work is redesigned to accommodate increased demands for flexibility, where employees want the choice to work from wherever and whenever they want.

Career progression includes traditional and nontraditional paths and ladders. Explore the benefits of clearly defined career paths, the role of HR, and different career advancement models in this toolkit.

Table of Contents

Business Case
HR's Role
Legal Issues
Traditional Career Paths and Ladders
Nontraditional Methods of Career Progression
Metrics
Expert Advice

The Price of Success: Balancing Career Advancement and Well-Being

SHRM researcher Sally Windisch offers innovative solutions for healthier, more balanced workplace cultures to support employee career growth in this All Things Work podcast episode.

Business Case

Most organizations can benefit by increasing efforts to establish clear strategies for growing talent from within. Implementing career paths can positively impact the entire organization and help meet departmental and organizational objectives by improving employee morale, career satisfaction, and motivation. Career paths and ladders can be effective tools for achieving positive organizational outcomes and continued growth.

More than a quarter of HR professionals identified a lack of clear career advancement pathways as their top challenge in acquiring talent in the 2023-24 SHRM State of the Workplace report.

Reasons why employers may need clearer career paths and ladders include:

An inability to find, recruit, and place the right people in the right jobs.
Employee disengagement.
Employee demands for greater workplace flexibility.
A desire to demonstrate your organization's commitment to fairness and equal opportunity.
Limited opportunity for advancement in flatter or smaller organizations.
Organizational culture change.

The ongoing U.S. labor shortage is another selling point for creating formal career paths and ladders. Providing workers with clear paths to advancement may help improve retention, reduce skills gaps, increase productivity, and contain costs. The September 2025 labor market review from SHRM indicated that the labor market remains soft.

According to SHRM research on the state of mental health in 2023, opportunities for growth within the workplace represent the single biggest factor in employees' overall mental well-being — even more than job security. Globally, this is also a key factor in an employee's decision to remain with their current employer. Experts say that employees who believe their employers make effective use of their talents and abilities are overwhelmingly more committed to staying on the job.

Organizational Benefits

Managing employee perceptions of career development opportunities is a key to enhancing engagement and loyalty among employees. Aligning the employee's career goals with the strategic goals of the organization helps the employer:

Differentiate itself from labor market competitors. Even a relatively small employer investment has a positive impact on loyalty, as this successful restaurant chain demonstrates.

Retain key workers. Critical workers include those who drive a disproportionate share of key business outcomes, significantly influence an organization's value chain, or are in short supply in the labor market.

Keep younger workers. For example, both Millennials (born 1981-1996) and members of Generation Z (born 1997-2012) prioritize career development as part of their job benefits package.

Support deskless workers. AI-driven automation is disrupting the traditional career pathways of deskless employees in blue-collar industries, who have a higher turnover rate than office employees. New pathways built around AI technology are emerging.

Decrease turnover. The cost of turnover can be significant, including lost productivity, institutional knowledge, and relationships, as well as added burdens on remaining employees. Sixty-five percent of employers rate professional and career development employee benefits as "very" or "extremely" important in the SHRM 2025 Employee Benefits Survey.

SHRM Resources

Pro Tip

Organizations should identify workers who are central to the execution of business strategy. 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.

HR's Role

Empowering employees. HR should encourage employees to take control of their own career ladders while continuing to provide resources and tools to assist them in developing their skills and abilities. HR can also play a role in creating sustainable growth pathways that balance employee career aspirations with wellness.

Training and development should be focused on preparing the employee for a lifetime of employability versus a lifetime of company employment. The U.S. Department of Labor's Employment and Training Administration has some helpful employer resources for training and retaining employees, while its O*NET Online resource offers detailed descriptions, requirements, and opportunities for over 900 occupations.

Supporting managers. HR professionals can take the lead in helping managers develop career paths for their employees and contribute to promotions specifically by:

Establishing fair, practical and consistently administered promotion policies and procedures. This includes policies for posting — or not posting — available positions and the content and timing of promotion announcements.
Facilitating promotions by providing employees with career coaching and helping managers develop clear selection criteria.
Helping newly promoted employees make a smooth transition.
Cushioning the blow for those not selected for a promotion by helping them continue to strengthen their skills for future opportunities.
Receiving guidance themselves in navigating and advancing their own careers.

Communicating effectively. Employers must handle conversations about potentially tricky topics carefully and honestly and without creating expectations or making commitments that they may not be able to fulfill. These topics include:

Gauging an employee's interest in a promotion without promising a specific job.
Telling an employee they are a high-potential employee.
Letting an employee know they are not considered a high-potential employee.

Regular, honest job competency and/or performance feedback is important. Employees can be coached on strengths and weaknesses in a way that helps them understand what to work on if they would like to be considered for advancement opportunities. Discussions can be separate conversations about career coaching or part of a larger performance review discussion.

Learning & Development Across the Employee Life Cycle

Discover best practices for recruiting, developing, and retaining employees through thoughtfully curated learning and development programs with Jay Jones, lead of talent and employee experience at SHRM, in this Honest HR podcast episode.

SHRM Resources

Pro Tip

HR professionals should guide managers to see employees as valuable assets for the entire organization, not just for their own teams. This perspective encourages managers to support employee development across different departments, ultimately benefiting the whole organization.

SHRM Senior Certified Professional (SHRM-SCP)

Advance your career as an HR leader by earning the SHRM Senior Certified Professional (SHRM-SCP) certification and begin transforming your workplace. The SHRM-SCP certification is for individuals whose work includes duties such as developing HR policies or procedures, overseeing the execution of integrated HR operations, directing an entire HR enterprise or leading the alignment of HR strategies to organizational goals.

Apply today.

SHRM senior certified professional credential seal

Legal Issues

Discrimination is the most common legal issue that can arise in the context of career paths and career ladders. While executive orders and local legislation introduce new complexities, federal laws that prohibit job discrimination such as the Equal Pay Act of 1963 and Title VII of the Civil Rights Act of 1964 change less frequently and still require fair pay practices. Employers should continue to conduct pay audits to ensure compliance, mitigate risk, and maintain workforce trust.

In addition to the risk of lawsuits or unwanted media attention, gender discrimination may cause valuable talent to leave the organization in pursuit of other options.

Gender Disparity, Workforce Integration, and DEI Executive Orders

In this All Things Work podcast episode, Tamla Oates-Forney, CEO of SHRM Linkage, shares how businesses can design viable, holistic, talent optimization programs that address gender disparities in the workplace and use tools for inclusivity and compliance.

Discriminatory Promotions

To reduce the risk of discriminatory promotions, employers need to:

Clearly communicate expectations and parameters for advancement.
Ensure decisions to promote or not to promote are based solely on merit, namely, the skills, knowledge, and experience of an individual, rather than any protected characteristics.
Consider how promotion opportunities are posted — specifically, whether to do it internally and externally at the same time.
Ensure promotion policies and practices are clear and consistent, taking into account any pay transparency laws at the state or local level.

Pay Discrimination

When positions have established pay bands, employees who are not promoted may eventually reach the maximum pay for their role. To identify pay inequities, HR professionals should look beyond pay differences within the same job and examine the distribution of potential plaintiffs in higher-level, better-compensated roles.

Other signs of potential pay discrimination may include:

Significant turnover in a department.
Analysis showing that retention is significantly lower for people with a characteristic protected by federal or state law (e.g., race, color, sex, religion, national origin, age, and disability) by one, two, or three years.
Equal Employment Opportunity Commission (EEOC) charges affecting a certain department.
Significant differences from overall pay benchmarks at other employers.

More than 60% of HR professionals said their organization conducted pay equity reviews or audits to identify possible pay differences between employees performing similar work that could not be explained by job factors, according to SHRM research, with more than half conducting them once a year.

HR professionals can help prevent pay discrimination by systematically reviewing promotion practices in three steps:

Start by analyzing promotion rates to identify disparities, and if so, probe whether those disparities show lower promotions for people with the same protected characteristics.
Assess how promotion opportunities are communicated across the organization to ensure transparency and equal access.
Employers that are legally required to file EEO-1 reports can use them to pinpoint any underrepresentation of employees based on protected characteristic, enabling data-driven interventions that support fair advancement and compliance with equal employment regulations.

The Truth About Pay Transparency: Challenges, Risks, and Rewards

In this All Things Work podcast episode, C3 Nonprofit Consulting Group's Nanci Hibschman and Amanda Wethington share how to effectively implement pay transparency practices while fostering open dialogue and empowering managers.

SHRM Resources

Have a question about promotion policy best practices?

Ask an HR Knowledge Advisor

Pro Tip

Multiple states have passed pay transparency laws that require employers to post salary ranges for open positions. Use SHRM's Multistate Laws Comparison Tool to determine if there are applicable laws in your state or local jurisdiction.

Traditional Career Paths and Ladders

In a traditional career ladder system, employees advance to higher levels by building their knowledge, skills, and abilities (KSAs) as they gain experience, education, and access to opportunities. Each promotion brings increased responsibility and higher compensation. This progression continues until the employee reaches the top of the ladder, declines further advancement, leaves the organization, retires, or is terminated. Traditional career ladders assume that an individual wishes to continue to climb the ladder as long as they are able to and that the employer will continue to provide opportunities.

Examples of corporate-wide initiatives around career planning include:

Role-playing with managers on how to discuss career interests.
Career mapping with individual employees.
Developing formal career paths for all positions within the organization.

Career maps help employees think strategically about their career paths and how to meet their career goals within the organization rather than leaving to move ahead. Some salary/compensation survey providers may include common career paths as part of their salary report for certain occupations such as IT professionals and engineers. SHRM Members are also entitled to one free report from the SHRM Compensation Data Center.

For managers and employees to successfully practice career mapping, HR must develop the necessary resources to facilitate the process. Career mapping involves three steps:

Self-assessment. A manager engages with the employee to explore their KSAs, as well as past experiences, accomplishments, and interests.
Individualized career map. Identify other positions that meet the employee's interests, either through a lateral move into a different job family or a promotion. The position should capitalize on the employee's past experiences, interests, and motivation while requiring the employee to develop a certain degree of new KSAs to give them something to work toward and stay engaged.
New opportunities. Explore other positions within the organization as they become available.

Ideal Candidates for career advancement include those who:

Seek high-profile assignments.
Connect with influential leaders.
Communicate openly and directly about career aspirations.
Seek visibility for their accomplishments.
Let their supervisors know of their skills and willingness to contribute.
Continually seek opportunities.
Learn the political landscape or unwritten rules of the organization.
Are not afraid to ask for help.

Issues likely to arise with a traditional career ladder include:

To manage or not to manage. High-performing individual contributors may not want or be suited for management roles, yet may still seek growth and higher compensation. Offering dual career tracks allows employees to progress and be rewarded based on their strengths, helping retain top talent while supporting diverse employee career goals.

No desire to climb. For some individuals, the rung at which they enter an organization is the rung at which they desire to stay. Someone who is happy at their current level, does not aspire to advance, and is a solid performer should not be pressured to climb the ladder.

Career plateaus and stagnation. A plateau happens when employees reach a point with limited opportunities for further growth, often prompting them to leave. Stagnation occurs when employees lose engagement and effectiveness, which can result from remaining on a plateau for too long.

For managers and employees to successfully practice career mapping, HR must develop the necessary resources to facilitate the process. Career mapping involves three steps:

Self-assessment. A manager engages with the employee to explore their KSAs, as well as past experiences, accomplishments, and interests.
Individualized career map. Identify other positions that meet the employee's interests, either through a lateral move into a different job family or a promotion. The position should capitalize on the employee's past experiences, interests, and motivation while requiring the employee to develop a certain degree of new KSAs to give them something to work toward and stay engaged.
New opportunities. Explore other positions within the organization as they become available.

Ideal candidates for career advancement include employees who:

Seek high-profile assignments.
Connect with influential leaders.
Communicate openly and directly about career aspirations.
Seek visibility for their accomplishments.
Let their supervisors know of their skills and willingness to contribute.
Continually seek opportunities.
Learn the political landscape or unwritten rules of the organization.
Are not afraid to ask for help.

Issues likely to arise with a traditional career ladder include:

To manage or not to manage. High-performing individual contributors may not want or be suited for management roles, yet may still seek growth and higher compensation. Offering dual career tracks allows employees to progress and be rewarded based on their strengths, helping retain top talent while supporting diverse employee career goals.

No desire to climb. For some individuals, the rung at which they enter an organization is the rung at which they desire to stay. Someone who is happy at their current level, does not aspire to advance, and is a solid performer should not be pressured to climb the ladder.

Career plateaus and stagnation. A plateau happens when employees reach a point with limited opportunities for further growth, often prompting them to leave. Stagnation occurs when employees lose engagement and effectiveness, which can result from remaining on a plateau for too long.

SHRM Resources

Pro Tip

Encouraging supervisors to have periodic career discussions with employees is important in evaluating the current and future aspirations of all employees. This will help identify those who would like to remain in their positions and those who are looking for the next step on their career ladders.

Nontraditional Methods of Career Progression

Organizations with low turnover, limited growth, or financial constraints can offer other ways to retain and engage employees besides traditional career ladder advancement.

This option can provide increased challenges and opportunities for employees to get more out of their jobs while staying on the same rung of their ladders. Commonly used job redesign strategies are job enlargement and job enrichment.

Job enlargement broadens the scope of a job by varying the number of different tasks to be performed.
Job enrichment increases the depth of the role by adding employee responsibility for planning, organizing, and controlling tasks of the job.

Jobs that are enlarged but not enriched are less likely to motivate employees, who may perceive the changes as more work without any career benefits.

This is an effective method to provide job enrichment from an employee's perspective. It involves the systematic movement of employees from job to job within an organization. Job rotation can also be used for critical staffing situations, making it an employer as well as employee benefit.

This model allows employees upward mobility without requiring that they be placed into supervisory or managerial positions. These are ideal for people with particular technical skills or education who are not interested in or suited for management.

In organizations with a limited number of management and leadership positions, employees are encouraged to think of a career path both vertically and horizontally, also called a career lattice.

The benefits of career lattices include:

The ability to fill key positions with demonstrated performers.
Opportunities for employees to experiment in related fields.
Greater appeal to attract and retain younger employees.

A vast majority of companies plan to increase their use of contingent labor, which includes temporary, contract, and project workers, by more than 90%. These workers have more control over when, where, and how they will work and are essentially self-employed. Their roles can lead to permanent full-time employment and offer variety and challenge among worksites and projects, but they require skills portability and an individual desire for lifelong learning to stay current. Freelance work is popular with Gen Zers, who value flexibility.

These re-entry pathways are designed for individuals who have taken a career break and want to relaunch their careers. Mentorship and training opportunities help participants refresh expertise, gain relevant experience, and successfully transition back to work, while employers can diversify talent pipelines and address immediate skills gaps.

These paths offer employees a voice in tailoring their career paths to their life stages and can help employers retain top performers. In either case, the workload dimension should be indexed to the level of compensation.

Organizations can retain expertise and reduce their benefits overhead by offering a consulting role, a career option that many people find both personally and financially satisfying.

SHRM Resources

Pro Tip

A well-managed and well-executed dual career ladder program can be a positive asset to an organization struggling with the loss of experienced technical employees and searching for ways to attract, retain and develop these key career ladder employees.

Metrics

HR professionals should analyze key metrics related to career progression programs to determine the return on investment (ROI) to the organization. To help determine which metrics to use, HR should consider the following:

Review the business strategy and both long- and short-term goals with C-suite executives to ensure alignment.
Identify how HR will contribute to achieving those goals and pinpoint which measurements will provide targeted, relevant information that affects business objectives and strategies.

One way to calculate the ROI for career advancement programs is to determine how these initiatives affect organizational turnover or retention rates and then quantify their impact in financial terms. Turnover rates would include hard and soft costs related to the following:

Separation costs (e.g., exit interviews and payouts)
Vacancy costs (e.g, temporary hires, lost productivity)
Replacement costs (e.g., recruitment, orientation, training)

Example

An organization that has higher-than-average turnover rates for employees with three to five years of tenure with the firm may decide to develop individualized career maps as a way to boost retention. If the program reduces turnover rates, then the savings can be calculated. To quantify the cost of developing and implementing career progression initiatives, include staff time or consultant fees, and apply the difference to the savings resulting from reduced turnover. So if the savings in turnover costs is $75,000 and the cost of the career progression initiative is $45,000, the final ROI is $30,000.

SHRM Resources

Expert Advice

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Toolkit: Building Dynamic Employee Career Paths and Ladders

Business Case

Organizational Benefits

SHRM Resources

Pro Tip

HR's Role

SHRM Resources

Pro Tip

SHRM Senior Certified Professional (SHRM-SCP)

Legal Issues

Discriminatory Promotions

Pay Discrimination

SHRM Resources

Have a question about promotion policy best practices?

Pro Tip

Traditional Career Paths and Ladders

Career Mapping

Identifying Candidates

Common Challenges

Career Mapping

Identifying Candidates

Common Challenges

SHRM Resources

Pro Tip

Nontraditional Methods of Career Progression

Job Redesign

Job rotation

Dual Career Ladders

Horizontal Career Paths or Lattices

Contingent Workers

Returnships

Accelerated and "Dialed Down" Career Paths

Consulting

SHRM Resources

Pro Tip

Metrics

Example

SHRM Resources

Expert Advice

Upskilling and Reskilling: How to Prepare for the Future of Work

Scale Fast, Hire Smart: Leveraging Contractors in 2025

Elevating HR's Role in the Contingent Labor Revolution

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