Updated: April 18, 2023 - 4 min read
A good Product Manager is hard to find, and they’re even harder to replace. These are bright individuals with T-shaped skill sets that are difficult to replicate, with the ability to shape teams, solve conflicts, and innovate forward. They’re the kind of people you want around in a pinch.
But the average turn-over rate for Product Managers is between 6 months and 2 years. You can’t just chalk this up to fickleness: the reality is that many Product Managers want to stay at their current company, but feel compelled to move on when there is lack (or perceived lack) of career growth opportunity. The key to retention is making those internal opportunities available and clear.
You may think you’re already doing a good job at this, but here are the numbers:
The average estimated cost of losing a Product Manager is $240,000, while training usually costs a few thousand.
94% of employees say they would stay at a company longer if it invested in their learning and development.
Over 45% of companies with PMs do not provide PM-specific training, meaning any company that does gains a competitive advantage.
Because so few companies prioritize developing internal career paths for their Product Managers, even a small investment in this area will help you attract and keep top Product talent.
Build Out Product Management Career Paths to Increase Retention
Part of the challenge of defining an internal Product Management career ladder is that it’s such a young field. It’s an inherently broad role; there’s no set list of duties that holds true across all companies and sectors. Generally, however, this is the breakdown of the Product Management career path:
Associate Product Manager
Senior Product Manager
Bonus level: Principal Product Manager
Product Leader (Group Product Manager, Director of Product)
Product Executive (Chief Product Officer, VP of Product)
The Product Career path continues to push ever higher. Today, 31% of Fortune 100 companies now have a CPO, a 41% growth rate of the CPO title over the last three years.
Depending on the needs of your organization, you might not even need a PM to fit each listed above.
Why? Because once a PM gets to the Senior Product Manager level, the path splits. They can either continue to be an individual contributor as Principal Product Manager, or become a Product Leader.
Principal Product Managers are subject-matter experts who specialize in specific Product problems. Product Leaders are people who want to move further into people management; the tradeoff is that they move away from the day-to-day execution of Product Development and launch. Those are two very different profiles!
The good news is that even though the field of Product Management is broad, you can drill down and define it clearly at a company level. Talk to internal stakeholders to understand which Product roles are needed, what their responsibilities are, what differentiates the levels, and the different paths a newly-hired or entry-level PM can take to advance their career.
Clarity and communication are crucial here. Build in a process (for example during a performance review) to let your Product Managers know where they stand and which skills they need to build to advance their career if you can support them with training opportunities for those skills, even better. This training can be anything from a coding bootcamp to Product Management training specifically designed to improve Product and leadership skills.
Having advancement tracks and providing training sends a strong signal to Product Managers that you care about their career advancement, acting as a strong preventative measure that will save you money in the long run.
Here’s a pointer to get you started, based on responses from 5,000 Product Managers on what skills they most want to build:
60.1% – Building a Product Strategy
43.9% – Persuasive storytelling
36.1% – Cross-functional leadership
32.6% – Leading without authority
28.5% – Stakeholder management
23.9% – AI and ML
17.1% – Data analysis
Compensation Isn’t the Only Way to Compete
Let’s look at another piece of the puzzle. Compensation is a part of it, but what really drives Product People is their itch to solve problems. For top employers who can compete on compensation, values are the biggest driver of acquisition and retention of Product talent, as well as the flexible lifestyle associated with work in the tech industry.
Hire Product Managers that are passionate about your problem space or approach to solving problems, and you won’t have to refill those roles again for a long time.
Updated: April 18, 2023