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Understanding the Career Ladder (+ Examples)

With so many career paths, it’s important to understand the career ladder so team members can navigate a successful career.

By Kate Dagher  •   October 18, 2022  •   10 min read

Understanding the career ladder is important for anyone who is planning to progress their career and set specific goals. While career paths represent various avenues for career progression within particular fields of work, career ladders represent the specific jobs within a company, which are most typically ranked from the highest to the lowest level of responsibility and compensation. While career paths are highly individualized and personal, there are particular types of career ladders that exist within companies. 

This article will cover examples of five types of career ladders, important career ladder conversations, career ladder communication barriers, and some of the benefits of using career ladders as a structured approach within your team. 

5 types of career ladder examples 

1In-range career ladder

An in-range career ladder is typically used for roles that don’t have predefined steps that can be taken to advance in a position. If an employee is assigned new responsibilities and tasks that begin to change the nature of the role, an assessment is conducted by HR and that particular employee’s manager to determine whether this change in responsibility requires or warrants a change in job title or a raise. Often, this is decided through different conversations, including a one-on-one meeting between the employee and the manager, as well as a meeting between the manager and HR to determine what both parties think is viable and fair.

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2Individualized career ladder

An individualized career ladder is tailored to each individual employee and is composed of particular skills and competencies this person requires to move into a more diversified role or a higher-level job within the same department or job family in which they’re currently working. Typically, this type of career ladder is assigned to higher-ranking roles within the company, such as the director position and any other executive position above this. Often, an individualized career ladder is offered when a predefined career ladder does not exist for that particular role within the organization. An individualized career ladder is created in line with the department’s organizational goals and overall succession plan. 

3Horizontal career ladders

Horizontal career ladders tend to work quite well for larger organizations—especially those with many employees and fewer managerial and leadership roles. Horizontal career ladders, therefore, give employees the opportunity to gain more skills and experiences by moving laterally within the organization, rather than necessarily moving up in the organization, which is due to the limited number of leadership positions. Even though employees may not necessarily be moving “up” in the company, this doesn’t mean that they must keep the same job title or current salary. Horizontal career ladders also tend to be more typically used at higher-level positions, beginning with a manager or director title. This is an especially attractive career ladder for those looking to diversify their role or take a more specific or specialized role within the company. 

4Predefined vertical career ladder

A predefined vertical career ladder is used in organizations where there is a clearly defined hierarchical structure of job positions and classifications. The path for career progression tends to be clearly defined and easily understood by all employees. Also, hierarchical organizations tend to have multiple levels of consistent job titles, like Grade I, Grade II, Grade III, and so on, or team lead, manager, senior manager, director, executive director, and so on. It’s often clear to employees which skills or competencies they need to acquire before moving to the next job ranking, so long as there is a vacancy or opportunity to move up within the company. It is sometimes possible for two different positions to move into the same role as the sensical promotion for both, meaning that sometimes employees from different departments may be competing for the same role. 

5Dual career ladders

Dual career ladders are those which enable employees to move upwards, without necessarily moving into a people management position. This type of career ladder is intended for employees who have very strong technical or a particularly strong educational background but who do not desire to manage other employees and prefer to remain in or are better suited for hands-on positions. Working with this type of career ladder can potentially reduce turnover because it provides career advancement opportunities and pay raises, encouraging and motivating employees to continue learning and growing both personally and professionally. 

Career ladder conversations 

1Telling an employee they are a high-potential employee

It’s important for organizations to identify high-performing employees who are central to the successful completion of projects and play a key role in attaining strategic goals. These employees should be incorporated into your organization’s retention plans so you ensure that you’re meeting the expectations of these key performers and keeping them satisfied at work. It’s important to have a career ladder conversation with these employees and let them know that they are high-performing and high-potential employees. Not only does having this conversation serve as strong recognition and have the potential to motivate employees, but this discussion is also a great opportunity to discuss career ladder opportunities; when you understand which positions the employee may like to move into next, you can determine which coaching, mentoring, training, or development is required to help your employees get to where they would like to be. 

2Telling an employee they are not considered a high-potential employee

Like it’s important to identify high-potential employees, It’s just as important to have a conversation with an employee if they are not currently considered a high-potential employee. While this is certainly a difficult discussion to have, it’s important to understand why a team member may not be performing up to par—whether due to an issue with motivation, disinterest, or misalignment with the way that they are being managed, for example—and it can be helpful to determine if their skills and competencies may be better used in a different position that they may actually enjoy more. This conversation is a good opportunity to listen to the employee, hear them out, and collaborate on creating a career ladder plan that is in alignment with the individual’s career goals and interests and that can support the organization in achieving its strategic objectives. 

3Measuring an employee’s interest in a promotion while avoiding promising the job

Another important career ladder conversation to have is one which entails measuring your employee’s interest in available positions or promotions. The key to these conversations is to ensure that you’re not promising the job, but simply gauging interest. It’s essential that you keep an open mind to the various employees who may have an active interest in moving into the open role you have available, even if an employee meets only some of the prerequisites for the job. First, identify which employees have a strong likelihood of being effective in the vacant role, then identify which of the employees would be interested in developing the skills required to be effective in that role. Help employees identify what needs to be done to become more prepared for the promotion and take note of who is taking the most initiative and which employees seem the most motivated for the promotion. 

Career ladder communication barriers

It’s essential that leaders and HR are aware of legal issues that may potentially arise as they select employees to move into particular positions along the career ladder. Some of these issues and career ladder communication barriers are elucidated below. 

1Pay discrimination

It’s important for you and your organization to conduct analyses of the salaries that you offer and ensure that pay is fair. Pay disparities exist for individuals of protected classes, such as those with disabilities; races of the global majority, such as Black, Asian, Brown, dual heritage, and those indigenous to the Global South; and those who have been racialized as ‘ethnic minorities’ should be addressed immediately. Pay disparities that exist within the same position should be questioned and handled as well. Pay discrimination can cause an organization terrible consequences and may surface as significant employee turnover, low retention of minority groups, charges from the Equal Employment Opportunity Commission (EEOC), or major differences in the overall pay benchmarks, compared with other employers. Take a critical look at previous promotions and promotions that are currently available to ensure that minority groups are fairly included and represented. 

2Discriminatory promotions

If when analyzing your previous promotions, you and your team realize that not many minority group individuals or women are in positions at a high level within your company, your HR department and legal counsel should look at your career ladder to identify when and where exactly a lower representation of these individuals occurs. It is essential that you are supporting minority groups and women in acquiring the necessary skills and competencies that are required to attain promotions. If you are choosing to promote from within, you need to understand if those of the underrepresented gender, race, or ethnicity understand the opportunities available to them and if they have fair access to the company’s available career paths. You need to have a solid rationale behind every promotion and make an informed decision about whether to promote from within or hire externally. 

3Gender stereotyping

Women have faced gender stereotyping at work forever. Sadly, this gender stereotyping still exists today, as women face more obstacles and hurdles to be considered for higher-ranked positions within their organization. If in analyzing your leadership, it’s obvious that men tend to hold leadership positions much more than women, it’s essential that you work with the high-performing women in the organization to support them in developing the needed skills and competencies to move into positions of power. Not only do women provide a unique professional perspective, but they also are often some of the best leaders, mentors, and innovators. If you aren’t providing women with the same opportunities to move into leadership roles, know that they will be very difficult to retain and will surely find a successful, long-term career somewhere else. 

Benefits of career ladders 

1Retain experienced employees

Career ladders can be beneficial because they help organizations retain experienced employees who have been with the organization for years and know the company inside out. Creating retention plans for your top talent and ensuring that you are providing your employees with all that they need to be successful in their given roles will ensure that they want to stay with the company because they feel valued, seen, and heard in their career development. 

2Foster a motivated culture

When career ladders are clearly defined and understood by all employees, they really foster a motivated culture. Organizations that effectively manage employee perceptions of career development opportunities can ensure employee engagement and loyalty to the company by ensuring that they are receiving the support and getting access to the resources required to take their career to the next step. Investing in your employees means that you’re developing a motivated culture. 

3Attract talented employees who want to develop their skills 

When employees are aware of the opportunities that exist for them and exactly what they need to work on to get there, it means that typically the most talented and the most motivated employees will do the work to be promoted. This means that your high-potential employees identify themselves and will naturally take the initiative to develop the skills that are necessary to land the promotion. 

Parting advice

While career ladders are typically effective, they can also present some challenges. Sometimes employees lack the desire to climb the career ladder; they face significant obstacles in acquiring the necessary skills to move to the next step; they may not be interested in people management or management role at all; and sometimes, there is an absence of clear communication that is necessary for a career ladder to be effective. Be sure to familiarize yourself with the different career ladder examples and identify which one may be the most effective in your organization. Prioritize having important career ladder conversations and addressing career ladder communication barriers to ensure you are being fair and giving equitable support to all employees. We hope that these career ladder examples have been helpful in outlining how and in which organizations each one is the most effective.

  • shopfiy
  • uber
  • stanford university
  • survey monkey
  • arkose labs
  • getaround
  • motorola
  • university of michigan
  • webflow
  • gong
  • time doctor
  • top hat
  • global fashion group
  • 2U
  • lemonade
  • solace
  • motive
  • fanatics
  • gamesight
  • Vidyard Logo