A picture of bar chart, with the bars in black. They're growing up and to the right. There is a silhouette of a man, carrying a briefcase, climbing up the bars as if they were steps. There is a blueish, cartoon-style city skyline in the background. This image is here to represent a career path.

How to act like a VC-backed startup (#8: Build career paths for your team)

Dave Labowitz Scale

A picture of bar chart, with the bars in black. They're growing up and to the right. There is a silhouette of a man, carrying a briefcase, climbing up the bars as if they were steps. There is a blueish, cartoon-style city skyline in the background. This image is here to represent a career path.

“Build career paths for your team” is the eighth part of a twelve-part series. It’s a deep look behind the scenes of the “business playbook” that makes VC-backed companies successful and how to apply these lessons to your business.

  • If you’re looking for the introduction to the series and first article, please click here.
  • If you’re looking for other articles in the series, links are at the bottom of this article. Enjoy!

8. Build career paths for your team

There have been countless studies examining the benefits which make employees the happiest at work. Almost all have “a career path with growth opportunities” or something similar listed in the top five answers. And for good reason! People want to feel their work is meaningful in two contexts: it must create a positive impact on the growth of their company and also in helping their personal careers.

VC-backed companies plan to scale rapidly, so most of them build their hiring strategy around offering robust career advancement opportunities. Even if you’re planning on scaling a bit less aggressively, this is still a good plan.

Why are career paths important for your team?

One could easily argue that employee engagement is one of the best predictors of company success. When your team is engaged they’re going to show up with their best efforts. They’ll be more enthusiastic, both more creative and more detail-oriented (rare at the same time!) and will take ownership of their processes and results. Quite simply, creating exciting career paths for your team will keep them far more engaged over a longer period of time. If you don’t take this seriously, your best team members will quit. But what makes a career path a great opportunity that will excite and engage a top performer?

A great career path should be clearly defined

I’ve seen a lot of managers pay lip service to a great-sounding future career path way off in the distance with little thought or detail behind it. This hurts more often than it helps. First, if your team member realizes you haven’t really thought much about it yet, it will be an instant discouragement and could even start eroding their trust in you. 

Instead, outline a career path they can understand and move more easily towards. Tell them which goals they’ll be tasked with hitting and what the key milestones are they’ll need to pass. Discuss these so they’re clear, and then explain the average or expected timeline to get to the higher-level roles. Your goal will be two-fold: excite them with their future opportunities and leave them with a realistic expectation of what it will take to get there.

A leveling system puts structure around opportunities

One thing I learned in building several large technical telesupport centers is that if you’re between 20 team members and about 100 team members (this range will account for some of your most critical growth years) the roles and responsibilities tend to creep organically across the team. Some people are good at only certain things so they become default specialists. Others have more broad experience and end up playing mentor more than others. Some newer folk can get overwhelmed by the breadth of new things to learn and stay “entry-level” far longer than they would’ve with more focused skills training. 

The good news is this gives you the perfect opportunity to write up an updated org chart by creating multiple levels in some of these roles. For example, maybe one of your roles is “IT Technician”. You have seven IT Techs on your team. Three are relatively new and are still building core skills. The next three have been with your company for a few years and have a relatively broad understanding of most of the skills in their role. The final tech is a bit of a rock star; she has more technical acumen than the other techs and is frequently the one everyone goes to first for help when she’s around. 

With an easy adjustment to the org chart, you could slot the first three into “Tech I”, three into “Tech II”, and the final one into “Tech III” or “Tech Supervisor” if adding in some management responsibilities made sense. Just like that, you’ll have both a clearly explainable career path from an entry-level position all the way up to a senior tech or even manager position! This framework should give your upwardly mobile team members something to dive into and overachieve for. It will also give you more flexibility with salary ranges, ensuring you’re compensating on merit rather than longevity or something else.

Make the definition of success in each role obvious

Teach your team to understand how their performance will be evaluated so they know what success in their role looks like! Just like when playing darts, it’s impossible to hit the bullseye if you can’t see it. KPIs are quite useful in illustrating the bullseye for most roles.

They’ll also help you identify and address challenges promptly. If you’re giving regular coaching throughout the year on issues that pop up you’ll have a team member who is constantly improving. The alternative is to give them more rope, let them muddle through, and then be forced to deliver an unpleasant shock in the form of a negative annual review. That situation is good for no one!

Individual KPIs should blend into department and company KPIs

Furthermore, when you allow your team members to see the bigger picture of how their work interacts with others in their business units and even the company in its whole, they’ll draw together more as a group because they’ll share more goals. 

Consider building a compensation plan that offers some portion of bonus at the department and/or company level. A shared bonus pool teaches your team to care what everyone is doing, not just what they are doing. Your best contributors will be recognized, praised, and sought out for help. Your lower level contributors will be sought out to be given support by others who see the problems. And the end-of-quarter parties can be a lot of fun when the whole team has pulled together to hit a target!

Why is it so important for your company to lay out career advancement opportunities?

They make recruiting and training easier

Offering well-defined career paths will create a boost in hiring and training. Since each box on your new org chart has clearly defined skills and responsibilities, it’s more likely you’ll have identified some roles that qualify as “entry-level”. Positions designed this way are gold for a rapidly growing service organization. 

They allow you to select more on culture fit, mindset, and motivation when bringing new people into the team, as opposed to just a candidate’s day-one skill set. Skills can be taught, and with a leveling system in place, you should be in pretty good shape to bring new folks along quickly.

They make building your team more cost-effective

From a dollars and cents perspective this works, too, as the entry-level roles will pay less while those new team members are coming up to speed, reducing your carrying costs! Additionally, on the occasions when you miss and the new hire just isn’t a good fit, you’ll be able to figure it out pretty quickly; if they struggle with entry-level stuff in a limited scope they may not be right for the position.

They’re good for morale and retention

If your team feels upwardly mobile they’ll be far more likely to stick around in your organization longer. Longer retention keeps your valuable institutional knowledge in your company rather than trickling out the door to your competitors. This is great for knowledge management, but also business continuity: recruiting is time-consuming and expensive, even when it goes well. When it doesn’t and you mis-hire someone who’s a bad fit, it’s astronomically expensive and can cause you to have a key spot in your organization producing at reduced capacity for 3-6 months.

But a lack of career advancement opportunities can turn into an even more serious problem. Think about this for a moment: if your best people aren’t upwardly mobile in your organization, what will happen? They’ll leave for other opportunities, right? And who does that leave in your organization? Your least motivated, least talented team members… Only a few key losses can seriously dilute the capabilities and performance of a team!

What challenges can arise?

I’ve run into a few recurring challenges building career paths for team members over the years. They’re not deal-breakers by any means, but it’s better to think about them in advance.

You’ll need to offer flexibility

No matter how much you try to lay out a coherent, accessible career path with plenty of advancement opportunities, there will be team members who decide they want to do something completely different. This is most common when you’re dealing with a large number of entry-level staff. Many of them won’t have much experience in their role and their interests will change and develop as they learn. Know going in that not everyone will want to follow the path you created.

I know it can be frustrating when you hire someone for a technical role and six months in, after they’re fully trained, they start asking about moving to the marketing department. The key to avoiding frustrations is to avoid departmental thinking; think about the good of the employee and company as a whole. While this can be unfortunate for the tech team, remember it can be a boon for the marketing department. If the employee is a top performer, don’t you want them to stay with your company and be happy in their role? It’s better to give them flexibility when you can.

Sometimes, there is no path

Sometimes, you’ll have a team member who wants to pursue a career path that simply won’t work in your company. Maybe the role they want is one that’s already occupied. Or maybe you don’t plan to scale the team in the area where your employee wants to evolve. Sometimes, you need them so badly in the role they’re in that you can’t accede to their wishes and let them shift their career path. These things happen. 

In this case, it’s important to take a value-based approach to solve the problem. Personally, I’d rather be honest with someone, even if it means losing them as a team member. It’s better to have a frank conversation with someone about what you do and don’t see as possible and discuss options. It’s okay to accept they’ll move on at some point with a great recommendation from you.  

Conclusion

One of the reasons so many people like working at VC-backed startups is because they allow for so many amazing career paths. They’re designed to scale and people know that change and growth will always be there, opening doors for them. Even if you’re not planning on scaling at the rate of a funded startup, you can still make your company an exciting and engaging place to work by taking your team’s growth opportunities seriously. 

Creating accessible career paths don’t just benefit your team. It can help you attract and retain top talent, streamline your training, and keep your compensation merit-based and flexible.

This series will continue soon with Part 9.

Other articles in the VC-backed startup series are: