There is no such thing as a dead-end job, according to our newest McKinsey Global Institute (MGI) report, Human Capital at work: The value of experience. Every job is an opportunity to develop skills that can lead to a better position. A waitress manages people while multi-tasking, fitting experience for customer service. An inventory clerk observes first-hand the complexities of juggling logistics in a warehouse. An IT person on the help desk masters the basics of managing a network.
Human capital at work: The value of experience
Our team of researchers analyzed 700 occupations across four countries and found that skills acquired through work experience account for 40 to 43 percent of average lifetime earnings in the US, UK, and Germany, and 56 percent of earnings in India.
“What this means is that you’re not limited to a low-earning bracket simply because of your level of education or lack of personal and professional networks. This is a story of possibilities,” explains MGI partner Anu Madgavkar, who led the research with Bill Schaninger, a McKinsey senior partner in our People & Organizational Performance Practice.
But it takes a willingness to try new jobs, including at your current employer. In our sample, workers switched roles an average of every two to four years, increasing their skill set by about 25 percent with each move. And those who made bold moves early on and more frequently saw the greatest increase in earnings. “You have to try something new that stretches you,” says Bill. “You don’t know if it’s going to work. You build on that stretch. Repeat. And that’s the essence of it really. You have to say, ‘Surely, there’s more than this’—and even be willing to fail miserably.”
He is speaking from experience. Following an early stint in academia, Bill joined McKinsey as an associate in London. “In the first weeks, I was convinced I had made a massive mistake. I was so bad at top-down communications and problem solving,” he remembers. “But each time I moved to a new role, I improved my skills, always building on what I had just learned.”
Changing jobs requires energy and resilience, and higher education institutions can better prepare their young people, says Anu. “They can take the perspective that they are growing ‘future employees,’ not just graduating students,” she suggests, “and double down on life skills such as critical thinking, public speaking, how to engage and influence others, how to be a systems thinker, and—most importantly—how to cultivate a constant learning mindset.”
If companies can adjust some of their people processes and approaches to management, Anu adds, they can attract top talent by offering their employees opportunities for continuous growth and mobility. It starts with recruiting. “In addition to focusing on skills, they should widen their scope and look for personality, adaptability, curiosity,” she points out. “And once hired, coaching and mentoring new employees is especially important in the first year.”
Those who become known as ‘learning organizations’ will ultimately attract and retain the best talent, their single most important resource.
With the right analytics and processes in place, businesses can quantify both their employees’ current skills and attributes and their longer-term potential to grow—information that’s often scattered in performance reviews, informal communications, and sometimes in the heads of supervisors or colleagues.
Companies have an opportunity to establish and communicate a full and flexible array of different learning pathways both within and outside the organization. They can even celebrate when someone leaves—and communicate that they are welcome to return in the future with deeper skills. “For some businesses, this will be a different paradigm and a lot of work,” observes Anu. “But those who become known as ‘learning organizations’ will ultimately attract and retain the best talent, their single most important resource.”
“Today, when a young person asks me for advice on how to manage a career in such a dynamic environment, I tell them to go for the experience, not the compensation,” says Bill. Anu agrees. “Twice I’ve made lateral moves for the experience,” she says. “When I joined McKinsey, people in my former profession didn’t understand why I would leave. But I believed it was the chance of a lifetime to join an organization where I could learn from the best.”