The days are gone where people could expect to move continuously up the career ladder. While the increasingly competitive business arena is not helping, the recession has certainly played its part in eliminating the traditional career path. The usual “pyramid” organisational structure that all executives live and work by is now a fluid formation of business units.

Trash the silo mentality

VP of human resources for Unilever South East Asia & Australasia and a product of several successful lateral transfers himself, Steven Gross calls it the end of the “silo mentality”. Lateral transfers give companies the flexibility of reshaping the organisational structure without laying people off in one area and rehiring for another function in the current economic situation. “Particularly at this time, we will see companies take advantage of available skill sets and give employees the opportunity to work in a different environment and gain different exposures.”

Furthermore, it is in the interest of companies to use lateral movements to increase the value of their employees now, says The Ascott Group’s SVP of human resources Yvonne Oo. Why? Companies can spend more time developing employees during the current business slowdown. “This is where you can really get the maximum [learning] mileage with the right [business] intent to let them adapt to the new function better.”

What’s in it for employees then? Having spent the last 13 years across different roles and various businesses in General Electric (GE), Lek Siok King, the conglomerate’s regional HR leader of Southeast Asia, was never bored with work. The zigzag corporate path has worked so well for her that till now, Lek loves moving her people into other business units to experience similar career enrichment. Lateral transferring also gives her a chance to reinvigorate the organisation with new replacement hires.

While Gross hasn’t done any cost benefit analysis to prove the cost effectiveness of lateral moves and the costs it might incur to retrain employees, he believes the rewards are intangible. “It would be much more cost effective to have some training costs upfront because it saves severance [and] recruitment costs.” Not to mention spin-offs such as employee engagement and motivation.

Nominate your candidates wisely

No matter how cost effective this internal recruitment strategy might be, reality is such that companies are still forced into reorganisation structuring, GE included. With prudency the conglomerate’s top priority, Lek says number of lateral moves would go down this year “because there are fewer jobs available”.

However, horizontal advancements will continue for talent with transferable skill sets such as finance, HR, logistics and supply chain. This would not be an unusual occurrence for all three companies as all bosses much prefer internal candidates when recruiting. Lek says managers find it much easier to train someone who already has basic organisation knowledge rather than trying to fit a new person into GE’s culture. With the induction period scrapped off, Gross says there is no downtime to consider. “They would be immediately effective whereas some people who are new to the company would not be.”

The Ascott Group grades their talent’s lateral potential into three categories: “immediately ready”, “ready in one or two years’ time” and “ready in more than three years time”. HR would also have a full understanding of their background which includes current skill sets, previously held positions and a list of future expected competencies required. So if there is “a sudden vacated role”, HR would know which talent to transfer immediately, says Oo.

Yet lateral movement isn’t something which Unilever puts a fence around even though high potentials do receive more job transfers as a form of career fast-track. There would be a core of employees who perform well but might not necessarily be earmarked to move quickly through businesses. That’s why lateral opportunities are important, says Gross, because these employees do not want to stay in the same job for the next 10 years as well. “They are also keen to have different experiences. It’s good for them to stay fresh for their own morale.”

Make the pitch for buy-in

Moving horizontally across the business may not be the equivalent of the promotion employees envision but there are still brownie points to be earned. As their skill sets improve, the job security within the company itself naturally increases. Unilever’s Gross says, “They are increasing the promotion potential for the future because they are adding a skill set, maybe not for this job but, for the next job or the one after that.”

Thankfully for Unilever, nine times out of ten, employees’ responses towards possible lateral moves are enthusiastic. Working under different bosses is also an advantage employees would do well not to forget. Gross adds, “We all learn from the leaders we work for so people have the opportunity to learn something, whether leadership skills or competencies.”

When employees return from their lateral stints to either the same or another function, their newfound broader perspective of the business puts them in a much better position to deliver a better job for the company. Although all three HR leaders are coy about it, they grudgingly agree that showing a broader range of skills does boost the employee’s marketability within the industry. Gross says, “It is not something we are actively promoting but that is [beneficial] for the individual.”

Reveal the bigger picture

Everyone likes a promotion because it means a definite pay raise and a swanky job title. Change it to horizontal advancement and the initial response may be less than enthusiastic. While titles may change in a lateral move depending on the new business function, usually generic titles such as manager, director and VP would be retained.

Then again, it is money and not titles which matter most to employees. And all three HR practitioners aren’t going to lie to say that pay increments will be automatically given with a lateral move. Instead, pay adjustments really depend on the circumstances. “If it’s initiated by the employee, then typically there is nothing much to sell because he or she wants it,” says Oo.

Unless the move is part of a high potential development programme or to fill the company’s needs, pay adjustments would only be given “if it is warranted”. So for employees who are already well compensated in their current roles, these HR leaders say it is highly unlikely for talent to see a pay rise when the transfer is made to stretch their potential.

However, with the harsh economy forcing most companies on a cost containment mode, there should be a discussion to reassure employees especially if the lateral move is a result of business reshaping plans, says Gross. Otherwise, employees might feel the move is made to plug the company’s needs and not theirs.

Nonetheless, GE’s Lek thinks it is bad form for the employee to ask for more money in a lateral move which is designed to boost his or her career prospects. Citing herself, Lek says she has never asked for any pay increments in her life. “You just do the job and accumulate huge credibility. Subsequently, when there is a promotion, they will think of you.”

Set the wheels in motion

During Jack Welch’s reign as CEO of GE in the 1990’s, talent was constantly pushed to move to different areas of the business within 18 to 24 months on the job. This kept the talent pipeline on a constant flow which suited its business strategy at the time. However, the current dynamic global environment is such that job stabilisation, especially for senior roles, holds a bigger advantage now.

Moving in and out of new jobs too quickly, says Gross, is detrimental to both employer and employee. At times, it is important to give talent the opportunity to not only develop a plan when they arrive at the job, but also to improve on and see the results of what they have delivered. Hence, all three companies prefer talent to stay put in their jobs for three years before making a lateral move.

While that is the general job timeline for non-executive to middle management talent, Ascott Group’s Oo says generation Y employees have a much shorter attention span as they are eager to learn, have maximum energy levels and want to contribute. “Two years is probably the minimum for Gen Y or new joins to even think of the next move.”

As for senior leaders, Lek says the ideal timeline GE gives is four to five years as the company wants its leaders to “implement things and see through what they had implemented”. This is also the norm for Ascott Group’s senior management, explains Oo as these leaders know there aren’t as many opportunities as one goes higher. “At that senior level, the job scope itself would be exciting enough. We usually give them more responsibilities than to promote them.”

Oo adds, “We have people who can deputise for CEOs of the hospitality business and at the same time, they are head of strategy planning.” In short, continue to give employees challenges and new responsibilities to stretch their potential.

Use only the best tools

If HR can show someone how a lateral move fits into their long term career goal, then naturally they would be more receptive to it. Therefore, career development planning is one of the important tools in managing lateral moves within the company.

Sit with the employee and have a conversation about where you see their career heading, what their aspiration is, what they want in terms of their long term future within the company. Gross says mapping out such achievable steps in a performance management discussion every six months sets employees on the right path to realise their goal. This allows managers to talk about “how a lateral move might fit in towards that plan”.

Another brilliant lateral move technique GE uses is broad-banding. Employees are graded according to their corporate levels and similar grades are classified under one band. Because employees in the same band ranking never know whether a lateral move is in fact a step down for them, Lek says employees are taught to focus on building skills and not in attaining higher levels.

For the last four years running, Unilever has shown its commitment to the talent’s career development by using Functional Resource Communities on a quarterly basis where a group of eight to 10 senior line managers for every function and its HR business partner would discuss their employees’ performance, development needs and future career plans. This is an important tool to use during a lateral move, says Gross, as these key stakeholders would then commit themselves to the individual’s progress.

This HR innovation also spurs employees to succeed when they know their career is properly managed with many line managers’ eyes watching their progress, he adds.

Calculate exact lateral moves

Ultimately, climbing the next rung of the vertical ladder still depends on the availability of positions in the company. Even so, there is a certain expectation where people feel entitled to move up after a period of time.

While the general consensus is that lateral jobs completion would determine the next promotion, it is again subjected to the right opportunity. Not exactly the easiest task in the current recession. There has to be maturity and understanding on both sides, says Gross. Obviously, HR has to match the both company and employee’s needs to try to get a best solution. “We do need to sit with the employee and explain when that [promotion] might occur and what other alternatives there are. It is never set in stone.”

Lek says, “We can't tell them for sure that they are getting this [promotion] because you don’t know how the business will change.” Sure, it is disappointing for employees but as she explains, it is how you manage them.

Similar to GE’s broad-banding, Oo says her company has enough of organisational grade difference to “promote them in that sense”. For example, the employee may be a residence manager at M2 (Manager Grade 2) and be moved up to M3 but the title remains the same. Only this time, the job scope comes with a more complex environment and a diverse team to manage. The Ascott Group also gives yearly salary increments to the mobile employee as he or she becomes more internationally transferrable.

Yet there comes a time when the talent would outgrow the various lateral positions and it makes no sense in delaying that promotion. Oo says, “If he has done his fair share of rotating, I don’t think it is impossible to customise a new position [by] cutting out one portion of responsibility and give him that due promotion.”

In case of errors

Slight performance dips in a new role is understandable say all three HR practitioners, and they do give allowances for the employee’s performance to pick up. It is only when bad apples are allowed to slip through would HR have to begin the culling before organisational rot sets in.

Lek admits GE does have a few cases of poor performers with bad corporate values and lousy attitude sneaking past the system and somehow infecting another business unit. As her HR team matures, Lek hopes this practice of businesses allowing problematic staff to move scot-free into other units will be stopped eventually. “When we do this, we are not being fair. Because if one person is not working, it will affect the rest and the rest would have to do more just to cover this person’s job.”

Likewise, The Ascott Group does not believe in moving poor performers from one department to another. Oo says, “If you are not performing in your current role, we will need to understand if it is a job fit issue, an attitude issue or is it a skill gap issue.”

Perhaps companies can help by equipping the person with more skills before a lateral move. But Oo says, “If it’s a job fit issue, then recruitment wasn’t done properly.” At that point, if the employee still doesn’t fit the resulting horizontal move, they have to manage the rogue employee out instead, says Oo. “We would do it in a dignified way.”

Checkmate

Lateral moves will always exist as part of an organisation’s internal recruitment strategy because both employers and employees realise the longer term benefits of helping each other out.

But first, talent must adopt a good attitude towards individual growth and put their hands up for opportunities, says Oo. “The more departments you are exposed to, the more you are responsible for, you would be a much more valuable employee. It would [also] make a company a lot more successful.”

Lateral job expansion is also something Oo would consider as her next career move as being the global head of HR for Ascott, “it is a bit tough” to move any higher. “There is no more beyond this. Next [move] would probably be CapitaLand or I’ll take on another different department.”

On the other hand, Lek has told her boss she would be staying put in her current role for GE in the unforeseeable future. Having undergone through a long satisfying career progression peppered with lateral transfers, she says it’s time to settle down.

Having a mix of lateral moves and promotions across different categories of the business and between countries in his career, Gross says, is not unique within Unilever. “Most of the VPs or SVPs would have similar stories to tell about their career paths.”

What’s important to him is illustrating these success stories to current employees. “If people can see proof in the pudding, real examples where it [lateral move] has occurred, that shows them it is alive within the company.”