When key staff members quit or retire, they take with them valuable experience, skills and connections. That’s a big enough burden for a business to bear, but firms often compound the cost of a worker’s exit by failing to prepare someone to take their place.
A recent survey by human resources consulting firm Robert Half found that few Canadian companies appear to have employee succession plans in place. The firm asked 300 Canadian accounting and financial professionals which measures their employers would have to take to fill their roles if they were to quit: an internal replacement; an internal replacement who would require substantial training; or an external hire. (The same question was put to 1,100 U.S. respondents, with similar results).
The results make for dispiriting reading:
While the number of respondents who felt an external hire would be necessary to replace them rose with the respondent’s seniority, even regular staffers and mid-level managers did not believe any of their colleagues or subordinates would be able to fill their jobs automatically. Fully 80% of staff-level employees surveyed believed their employers would have to train an internal replacement (50%) or look outside the company for a replacement (30%).
Small businesses aren’t immune to the effects of inadequate employee succession planning. “Whether you’re a large global company with lots of resources internally, or you’re a small- to mid-sized firm, I think the gist of the survey results would probably be fairly similar,” says Koula Vasilopoulos, District Director for Western Canada at Robert Half.
The results may be slightly inflated by respondents’ egos, Vasilopoulos admits. “Some people just feel very confident in their abilities and don’t think that anybody could do their jobs better than them,” she says. But she cautions that employees are often best-placed to understand what their role entails and how their fellow workers match up to its requirements. “Others may simply see that nobody else in the company has really been trained to do their job or is capable to do their job,” she notes.
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Vasilopoulos says it’s not surprising that many companies haven’t given much thought to employee succession. “To actually sit down and proactively develop a plan can feel like a long-term goal,” she says. “Bosses can just get really busy, and while they might know logically that succession planning is very important, it can take a back seat to other priorities.”
Succession planning starts the moment you hire someone according to Vasilopoulos. “You have to assume that people are joining your organization in a role, and hoping to grow within the company,” she says.”If you are not proactive at identifying future career paths for employees and discussing it with them, you’re missing a huge opportunity.”
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Hire for the skills you’ll need tomorrow, not just the ones you need today recommends Vasilopoulos. “If you’re not on-boarding individuals into the company with the necessary skills, you could find yourself at an impasse,” she says. “Identify who in the organization may want to move and what they need in terms of skill training and development to help get them there.”
In addition to creating a talent pipeline to fill potential vacancies, showing employees that you’re thinking about their future within the company can boost retention and output. “If organizations embrace developing a strong succession plan, they’ll find they have engaged, motivated individuals who feel the organization is contributing to their personal and professional development,” says Vasilopoulos. “Those employees tend to have a higher level of performance.”
MORE EMPLOYEE SUCCESSION STRATEGIES:
- Should You Promote from Within or Hire from Outside? »
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- What It Takes to Build Internal Talent »
- Why Succession Matters More Than Ever »
Do you have a clear employee succession plan in place? How have you filled unexpected vacancies in your business? Let us know using the comments section below.