Why career pathways should be a core part of your reward strategy

Employee progression and long-term succession planning should be core building blocks of any reward strategy.

The majority of organisations want to ensure they attract and retain the best talent - but many overlook a crucial tool in making that happen: a clear, visible and sustainable career pathway.

When developing your reward strategy, employee progression and long-term succession planning should be core building blocks. Done well, this approach shows you’re thinking strategically while also enhancing employee engagement and strengthening your employee value proposition (EVP).

It’s not just about pay and perks - it’s about showing people how they can grow.

Companies that align organisational strategy with employee development consistently outperform those that treat the two separately. They’re better at attracting high-calibre candidates, and they’re more successful at keeping them.

Why invest in career pathways?

A career pathway clearly sets out the technical skills, qualifications, and capabilities needed at each step in an employee’s journey. It provides clarity, direction, and purpose.

Here’s what a strong career pathway can do:

Define what’s required to progress within your organisation.
Highlight skill or qualification gaps, giving employees a roadmap to close them.
Clarify career opportunities across different business areas (e.g., HR, finance, IT, operations, marketing).
Support pay transparency by linking roles, responsibilities, and pay ranges in a way that employees can clearly understand.

The structure should reflect the reality of your organisation - whether that’s a flatter model with fewer layers or a deeper hierarchy. Each level has its own set of technical requirements and qualifications aligned with the expectations of the role.

For example, a five-level career pathway in finance might look like this:

Senior leadership/director (e.g., group CFO)
Mid-management (e.g., finance manager)
Professional (e.g., finance business partner)
Junior (e.g., finance officer)
Entry level (e.g., finance assistant)

This structure helps employees visualise their potential journey and understand what’s needed to reach the next step and see how progression connects to reward in a consistent and equitable way.

Integrating career pathways into your reward strategy

A strong career pathway should integrate seamlessly with other elements of your reward framework, especially your competency framework.

Competency frameworks define organisational levels and generic expectations (e.g., leadership, communication skills).
Career pathways provide the technical, role-specific detail - enabling meaningful skills analysis and development planning.
Pay transparency is strengthened by showing the clear link between progression and pay bands, supporting fairness and helping employers prepare for compliance with the EU Pay Transparency Directive.

Career pathways work best when embedded into:

1–2–1 meetings and performance reviews
Recruitment and onboarding processes
Succession planning and retention strategies

When clear and visible, they help employees take ownership of their development. Managers can use them to guide conversations, identify training needs, and support progression.

Beyond the vertical: encouraging lateral moves

While career pathways often follow a vertical structure (as shown in the Finance example), patterns usually emerge - especially at early career and junior levels - where roles across different departments overlap in skills or qualifications.

This overlap is valuable for several reasons:

It encourages employees to explore opportunities across the organisation.
It shows that career growth doesn’t always mean leaving your company.
It supports lateral moves, even if it means dropping down a level temporarily, which some employees may be willing to do to progress and build new skills (e.g., moving from finance to HR).

Opening up career progression beyond the vertical pathway helps retain talent, enables employees to build long-term careers with you, and broadens organisational capability.

It also fosters a culture of mobility and learning, which is increasingly important in today’s dynamic work environment.

In summary

Career pathways should be a core element of your reward strategy, complementing competency frameworks, progression plans, and succession planning.

When thoughtfully designed and embedded into everyday processes, they:

Help retain talent by making progression visible and achievable.
Encourage both vertical and lateral career moves.
Support the development of skills your organisation needs for the future.
Deliver greater pay transparency, ensuring employees understand how reward is linked to role expectations, progression, and equity.

The key is not to let it be a standalone document. Integrate it into the heart of your people strategy.

When employees see a clear path forward, they’re more likely to stay, grow, and contribute meaningfully to your organisation’s success.