Organizations may be unable to advance all employees up traditional career ladders due to low turnover, limited growth or financial constraints, particularly during unsettled economic times. That’s when other kinds of development opportunities—such as horizontal career paths—offer another way to keep employees engaged.
“More companies are articulating simple yet explicit career paths for employees to demonstrate the different tracks that they can take,” says Tonushree Mondal, a principal with Mercer in Philadelphia. “There are on-ramp and off-ramp jobs built into this career architecture and all of these are anchored with robust descriptions around roles, competencies and progression criteria.”
She says that in most horizontal or lateral career moves, salaries and titles aren’t reduced even though “there is an explicit recognition” that a lateral move may involve a step down as the person goes through the learning curve in the new area. However, it’s not uncommon to withhold—or slow down—salary increases while the transition is being made.
With a limited number of leadership positions available, Blue Cross Blue Shield of North Carolina (BCBSNC) in Chapel Hill, N.C., “encourages employees to think both horizontally and vertically,” says Fara Palumbo, senior vice president of human resources. “We have the advantage of a business with a lot of distinct functions so that employees can find challenging and rewarding work when they move laterally.”
As part of the company’s succession planning process, BCBSNC actively looks for employees who’d be a good fit for these jobs when they come open—and often, this involves moving someone laterally.
“For the employee, this offers the opportunity to broaden their skills and contribute in new ways,” Palumbo says. “For the company, it allows us to fill key positions with demonstrated leaders.”
Palumbo says formal programs can help “avoid the frustration that comes from an employee who would like to move up but doesn’t know how or where.” Structured programs also help employees quickly understand how their job fits into the overall success of the organization and how they can meet their professional goals at their current workplace.
Palumbo and others suggest keeping the structure flexible. “Someone in customer service may be a great fit for our finance or health care areas,” she says. “If you define the employee’s career path too narrowly, you may miss opportunities like that.”
A Little Background
The concept of horizontal career paths, or a career lattice, was introduced in many large companies in the mid-to-late 1990s. Some organizations have very mature processes in place, says Mary Ann Downey, who heads the talent practice for the Institute for Corporate Productivity Inc., a private network of companies focused on improving and enhancing workforce productivity.
But that doesn’t mean all managers embrace the concept.
She says she’s seen cases where an employee was interested in moving to a lower level of responsibility to gain access to a new HR discipline and the hiring manager was suspicious, saying “he won’t stay in the position more than a year or two.”
In another instance, a woman interested in a less responsible position due to a change in family circumstances applied for three jobs that she was more than qualified for, didn’t get a single interview and left the organization to work for a competitor.
That’s why Downey says a career lattice strategy has to be understood by both managers and employees and appropriate incentives need to be in place to reinforce the desired behavior.
Moves Reap Benefits
At BCBSNC, employees can apply for any position for which they are qualified. All employees also prepare a personal development plan in consultation with their manager.
“Some of our most successful employees have tried out jobs in a variety of divisions,” Palumbo says. The company offers career coaching, mentoring programs and on-site degree programs to help workers increase their skills in their current job, make a lateral move to another business area or move up into leadership.
Gretchen Gray, director of BCBSNC’s member services strategy, hadn’t planned a horizontal career path but has certainly taken advantage of different leadership opportunities.
She’s contributed to the company’s business direction in the strategic development department, directed its pharmacy program operations in its health care division and now leads a business area responsible for continually improving the members’ experience.
“It’s pretty typical for long-time leaders at our company to have served in business units across our company,” Gray says.
While there were times she could have been promoted or chosen opportunities to advance outside the company, Gray says lateral roles have given her valuable insight into what it’s like to be a health care consumer, how an individual business unit operates and how a major health insurer sets strategic direction in a rapidly changing industry.
“My experience in the various lateral roles I have held helps me to be a better leader and manager,” Gray says. Another benefit is the strategic and collaborative working relationships which can be built during lateral roles.
Making it Work
Organizations with successful lateral career programs share several common characteristics, according to Downey:
- It’s part of the culture. Employee development goes beyond training courses and includes rotational assignments or temporary assignments into other organizations, roles or countries.
- Compensation isn’t reduced from the current level, but employees in developmental roles may not receive the same bonuses or merit increases while in the lateral assignment. The “pay-off” happens when they receive a more senior position.
- Budgets don’t get in the way. Often, one department will pay the salary of the employee receiving the development assignment.
- Well-developed competency models lay out the skills and experiences needed to be successful in more senior roles.
- Managers are evaluated and rewarded on their ability to develop others for more senior positions.
Impact on Younger Generations
Many believe lateral moves will help attract and retain employees from younger generations.
“While climbing the vertical ladder is important, so is career development and the opportunity to explore our interests within the organization across different departments,” says Kaizer “Razor” Suleman, CEO, of ReThink Rewards, a Toronto, Canada, web-based marketing incentive firm where the average employee is about 30 years old.
The company, which has 36 employees, takes a number of steps to create horizontal career paths. Every employee has the opportunity to lead and participate in a “vision committee” outside their regular job function.
The search engine marketing committee, for example, includes staff from sales, member experience and IT departments. The underlying message? “If you’ve got an interest in a particular subject and see opportunity for the company, go for it,” Suleman says.
Cathy Chin, who has an undergraduate degree in business administration and took only one HR course in college, moved from sales support to sales to marketing recruiting, and is now the employee experience —or HR—manager.
But Chin has also been involved in the interviewing process since her third month with the company. She has also led the recruiting committee, coached the training committee and is now on the LIFE committee, which promotes wellness.
In her sales role, Suleman says Chin wasn’t “in the right seat” so they sat down and talked, then set forth a development and coaching plan.
“We believe that if you can align people’s passion and DNA, you create a lot of value and that’s where you get the most out of a person,” Suleman says.
Pamela Babcock is a freelance writer based in the New York City area.