Succession in a Recession: How Can Your Organization be Prepared?
While many challenges have been presented by the current pandemic, there are some businesses that have more of one resource on their hands – time. This seems especially true in the realm of talent acquisition. Many companies have people, teams and structures to ensure strong talent acquisition practices during normal times. However, most hiring has slowed down recently. In light of that, perhaps it’s time for those normally focused on hiring the best of the best to shift gears a little to assess and augment your succession plans to build a better future for your organization.
According to a 2019 article by Forbes, two-thirds of companies have no formal succession plans in place. Additionally, the U.S. Bureau of Labor Statistics reports that average job tenure in January 2018 was a mere 4.2 years – and that number seems to continually decrease. In today’s market, many employees do not remain with their company long term and at the same time, baby boomers in key leadership positions are nearing retirement. In light of all of this, how do we plan for the best future?
What Talent is at Risk?
We understand that talent and employees often drive revenue. We review our financials monthly (at least) but how often are we reviewing our talent? If we are “reviewing our talent,” what factors should we focus on? Below is a list of what is considered to be essential for us to know to ensure proper succession planning:
- Disengagement – Do we know which employees are disengaged in our company and who is at risk of leaving? Are we having regular conversations and reviews with our employees or do we rely on “exit interviews” to learn why they are leaving after the fact?
- Employee Growth and Career Pathing – Are we providing growth opportunities for our top employees so they do not feel the need to look elsewhere to advance their career?
- Employee Plans – Do we know the timelines of our employees and when they may be looking to retire? Are they looking to relocate to a different geographical area based on needs or wants of their family?
Getting a temperature check on these factors for each and every position in your company can be a daunting task. In fact, it may even be unrealistic to perform this at all levels. To avoid overwhelming yourself and your team, it’s often best to start with the most critical roles in your organization. Every company has positions and people that, if they were lost, would leave the company at the very least struggling and, at worst, crippled. Planning for the potential loss of those team members is a great place to start.
How to Create a Succession Plan
A successful succession plan can never be reactive. If it is, when an event like a surprise resignation occurs, you’re set up for disruption and disturbance throughout the business. Through planning and talent development, losing a key employee can be well handled because future leaders are already in place, prepared to take on new challenges.
To begin succession planning, you must determine the direction in which the company is going. Are you working at replacing unexpected and expected departures? Or are you planning a new strategic direction that may require new talent and competencies to move your company forward? Either way, start by identifying the individuals and positions that are crucial to company success. Often times the importance of a position will reflect the hierarchy or organization chart of your company. Once these positions are identified you can begin the process.
Ensure Participation of Current Leaders
Although the conversations can be uncomfortable, our current leaders know that they will not be in their position forever. Leaders must be comfortable planning for success when they are gone – building, mentoring, and coaching future leaders for the betterment of the organization long-term. Being a recipient of this kind of training often, in turn, actually boosts employee engagement and retention.
Although there are clear benefits to succession planning and training around it, according to surveys by Deloitte, many company executives feel “succession planning can be destabilizing and threatening.” I believe there are two main reasons for their concerns. First, depending on how the company brings succession planning to the current staff member, it can be viewed as a “lack of confidence” in the current leader’s abilities. Second, if an employee brings succession planning up to their manager, it can be perceived as a lack of future commitment to the organization. However, if succession planning is a normal part of the organization for all key positions, these fears can be minimized on both sides and the conversations can be normalized.
Determine if the Successor will be Hired or Grown
There are many advantages to allowing existing employees to see their growth path and future opportunities within the company. By minimizing the chances of them looking elsewhere for the next step in their career, you can save on recruiting and on-boarding costs, maintain company culture by not having to bring in new leadership, and allow for better retention and engagement of key talent. If the talent for your organization’s key positions is in-house, focus on what training and development needs to be done for these employees to make them viable future leaders. If the talent is not internal, it is best to hire for a position that allows you to coach, mentor, and train them up for the role in mind.
Once you have identified the potential successors or gaps that exist, don’t wait – they must be addressed. Communication is key! Start by communicating with the leaders in place to have them begin training and mentoring the future. If you’re looking at hiring someone to fill a gap, communicate that to leadership and allow HR to create a plan on how to find that person externally.
At the end of the day, providing direction and opportunity is a great way to keep top performers – that’s your best succession plan. Future opportunity (both financially and responsibility driven) is one of the most common reasons we hear from top employees about why they are open to new positions. You can avoid this through transparency and regular “stay interviews”.
Do Not Let this Time Go to Waste
Overall, as hiring has slowed down recently, it is our responsibility as talent acquisition employees to find new value in the organization. By being proactive and starting to help plan for succession we can take the current downtime to create productive and new ways to help our organization. Succession planning is one of the areas that can be focused on as a larger picture of optimizing our internal talent.
If you feel there’s room for growth in optimizing your talent for success, this brief survey could be a good place to start to understand your organization’s true potential.
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