13 Benefits of the Career Ladder (And Tips for Creating One)

By Indeed Editorial Team

Published 14 April 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

A career ladder is a system that involves systematically providing employees in an organisation with access to positions that have more responsibility and higher pay. The career ladder is a popular method that leaders use to structure their businesses in a way that empowers team members and gives employees opportunities to grow within the company. If you're interested in developing a system for rewarding the commitment and dedication of your team through long-term career growth, understanding the advantages of the career ladder can help you determine if you want to incorporate this strategy in your workplace.

In this article, we discuss the top benefits of the career ladder and share tips for implementing it on your team.

13 benefits of a career ladder

There are many benefits of a career ladder within an organisation, for both employees and company leaders. The term career ladder is a metaphor, with each step on the ladder representing a higher job within the company's internal hierarchy. To learn more about this system, explore these key advantages:

1. Attracting quality talent

When you have a career ladder at your organisation, you have the potential to attract top talent. Qualified individuals with in-demand skills often want to work at companies that have a path to leadership positions and provide opportunities for growth, so they may actively seek organisations that use the career ladder model. By providing employees with a clear way to progress their careers within the company, you can attract qualified individuals who are interested in contributing to your team.

Related: What Is Talent Acquisition? (With Steps to Hire Talent)

2. Inspiring new team members

By having a series of steps from an entry-level position to a leadership role, you can inspire and motivate new members of your team. The opportunity to have continuous training and regular promotions can be exciting for entry-level employees who may not have the same options at similar jobs with their existing qualifications. Even if someone joined the company without long-term career plans, they may start imagining their future at the company and developing a passion for their job because of the available advancement opportunities. This can inspire a culture of positivity and motivation throughout the team.

3. Increasing retention

Structuring growth into the company is an effective strategy for improving retention within your team. Employees who value their own skills and qualifications often seek regular promotions and ways to gain more responsibility in the workplace. If they don't see a way to advance at their existing employer, they may search for opportunities elsewhere. By having a system for training, developing and promoting team members, you give qualified employees assurance that they can grow within the company long term. This can encourage them to dedicate themselves to internal professional development.

Related: What Is Employee Retention and How to Improve It (With Steps)

4. Setting clear goals

By establishing a system of how employees progress within the company, you can help people on your team set goals for their own careers. Some individuals may be passionate about their jobs but have questions about how to achieve the next step in their careers. They can use the career ladder system to understand what kind of training or performance goals to achieve if they want to earn their next promotion. This can help employees gain guidance and discipline in their careers as they advance to each new position.

Related: How to Get Promoted at Work With These 15 Strategies

5. Developing training systems

Because career ladders have official paths within the organisation of one role moving into another, they often involve in-depth training. This results in all employees within a company having access to consistent, high-quality training materials. You can gain input from everyone who goes through these training systems to refine and enhance the processes for each role. This also allows you to customise training sessions to the exact specifications of the organisation instead of relying on third-party educators to prepare candidates for the position.

6. Creating knowledgeable employees

Developing designated career progression pathways creates highly knowledgeable employees who understand many different elements of their department and the organisation as a whole. This is because senior leaders at a company often started as entry-level employees who worked in several different roles before becoming leaders. Because of their experience in so many positions, they typically understand how the entire department works and can develop a leadership strategy that supports the function of the entire team. They can also answer questions about every role on their team and mentor people at all levels within the organisation.

7. Motivating team members

You can use career growth as a tool for motivating your team to achieve performance targets. If your team members know they can become eligible for a promotion after maintaining a certain level of excellence in their role, this may motivate them to put extra effort into meeting their performance goals. Depending on each person's professional aspirations, you can discuss their long-term path within the company to inspire them to be more dedicated when working on specific types of assignments or growing certain skills.

8. Mentoring leaders

The continuous advancement and training of the career ladder can allow you to cultivate effective leaders through mentorship. Because multiple people may be advancing through the company at the same time, this can encourage long-term mentor relationships. Leaders can oversee employees as they advance from entry-level positions to managerial roles, providing nuanced advice for each role. These unique mentorships can promote teamwork and improve the leadership skills of experienced employees while modelling to new employees how to be effective teachers.

Related: How to Write a Thank-You Letter for a Mentor (With Tips)

9. Boosting morale

Having multiple opportunities for promotions and salary increases can have a positive influence on morale and company culture. When people feel confident in their growth at a company, they may feel less stressed about their job and have a better attitude about coming to work. Employees can feel that their leaders appreciate them because they have opportunities to develop professionally and achieve their goals on a regular basis. They may also feel that they have less competition against their colleagues because they know everyone at the company has an opportunity for advancement eventually.

10. Designing efficient processes

You can use career path programmes as a way to distribute assignments efficiently and create refined processes for completing work. As people progress through the organisation, leaders develop an awareness of everyone's key strengths. This makes it easier to distribute assignments to people based on their interests and capabilities. Tiers in a career ladder are also a good guide for assigning tasks of varying difficulty to employees within the same department. You can start by sending easy assignments to entry-level individuals, then give them higher-level assignments to determine if they're ready to advance.

11. Promoting job security

Using the career ladder system may create a sense of job security among your team. Employees can feel safe in their position knowing that their role is part of a larger system that progresses all the way to leadership. This means that even entry-level positions are often an important part of the team, helping team members feel like they're an essential part of the team.

12. Enhancing loyalty

One of the major benefits of building a plan for career growth into the structure of an organisation is a mutual sense of loyalty. Employees feel loyal to the company because they receive consistent raises and promotions throughout their careers. The company leaders also often have a sense of loyalty to employees because they dedicate years of their careers to supporting their team and department. There's also the added loyalty within the team, as many team members get to know one another and gain promotions at similar times.

13. Decreasing external competition

When a company has a career ladder, it often recruits internally and selects people from within the organisation for promotion. This can decrease the amount of competition for jobs with external candidates, which increases opportunities for existing employees. Decreased external competition can also promote an immediate sense of respect and appreciation for internal hires because these people are well-known employees and colleagues.

Tips for implementing a career ladder

Here are a few tips for creating a career ladder system within your organisation:

  • Share clear pathways to success: Educate your team about the progression of roles available, from entry-level positions to leadership roles. If there are multiple pathways, clarify that they can pursue either option.

  • Make training accessible: If you have in-house training, make these sessions available to every employee to provide fair opportunities for advancement to everyone on your team.

  • Communicate with your team: Talk to your team members during performance reviews about their interest in advancing to new positions and be clear about the steps they can take to achieve that goal.

Related: How To Find a Rewarding Career Path in 9 Steps

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