Organizations benefit when they help people identify internal paths for growth and advancement.

Editor’s note: This article is part of a new MIT SMR series about people analytics.

Careers are much more complex than they used to be, even within organizations. Now that companies have replaced rigid hierarchies with flatter, more fluid team-based structures to promote agile ways of working, they have also made it much harder for employees to figure out what their next job should be, let alone the one after that. This challenge is also increasingly a concern for employers, who must — for the sake of engagement and retention — show high performers how they can progress within the organization.

During the past year, researchers on the Wharton People Analytics team talked with managers at 14 industry-leading companies and hosted two daylong meetings to explore how organizations are helping their people build better careers. Through those discussions, we identified a couple of key ways that companies are using analytics to tackle the challenge.

Forging Pathways in Fluid Environments

A common first step for companies that apply analytics to building careers is to use HR data to map out the paths that people have pursued in the past. Because conventional career ladders based on a hierarchical organization chart have essentially disappeared, companies are starting to analyze the myriad ways people have advanced to highlight different pathways employees might pursue. At its simplest, such career mapping uses historical data to show what prior incumbents of a given role have gone on to do, allowing people who are currently in that job to see a range of plausible options for their next career move. In other cases, companies identify the jobs that have fed a given role to show the variety of paths employees can take toward a position they covet. Either way, analytics is being used to uncover options for advancement and growth that are not defined by formal organization charts but instead emerge from the decentralized decisions of employees and hiring managers as they craft careers within the organization.

A more ambitious and forward-looking version of career mapping also incorporates data on the kinds of skills and competencies needed for each job, looking for overlaps in profiles across jobs.