A new study from leading recruitment specialist Robert Half UK, reveals that almost two thirds (62%) of financial executives state they now have a formal succession plan in place. Only six per cent claim not to have any type of strategy in place.
Of the financial executives surveyed, almost half (49%) plan to hire interim specialists to help when a senior leader steps down while almost a fifth (18%) plan to hire externally.
When asked how confident they were in their business’ ability to operate effectively should a senior executive step down, 45% of financial executives surveyed were very confident and almost half (49%) were somewhat confident.
Strategies in place to manage the repercussions of a senior executive leaving expectantly
|Formal succession plan exists||62%|
|Plan to engage interim specialists||49%|
|Plan to hire externally||18%|
|No strategies currently exist||6%|
Phil Sheridan, Managing Director, Robert Half UK said: “The loss of a vital senior team member has the potential to significantly disrupt a business, especially if there has been little or no warning. Succession planning strategies are therefore vital for ensuring organisations continue “business as usual”, whereas companies that fail to implement a succession strategy are left with the time-consuming exercise of replacing someone when a critical role in the organisation is vacated. As our study shows, senior executives are now recognising that succession plans should be a core part of business management, in order to avoid an organisational crisis.”
The study reveals that finance executives in Scotland are the most prepared with 80% stating they have a formal strategy in place, compared to only 50% in the Midlands, the South West and Wales and 38% in the North. London sits three points higher than the UK average at 65%. However, Scotland is the least likely to engage with interim specialists (20%) whereas senior financial executives in London are the most likely to capitalise on the highly trained interim market.
Sheridan continues: “Including interim professionals in formal succession plans offers strong benefits as these highly skilled professional can confidently continue business critical projects to minimize the impact of departing senior management. In addition to implementing formal succession plans, employers should look at ways to help manage the process further, such as offering managers with executive potential more training and mentoring to develop the talent pipeline.”
Robert Half’s tips for efficient succession planning:
- Look for talent throughout the firm
Keep in mind that the best future leaders may not always be the people next in line for promotion. This assumption is a common mistake many employers make that can result in talented workers leaving the firm because they perceive a lack of advancement opportunities. Look for people who best display the skills necessary to thrive in the position regardless of their current title.
- Be proactive
It can take time to find and prepare a promising candidate for a leadership role. As such, don’t delay the process. Even if you don’t think you’ll need a replacement in the near future, prepping someone to assume an important role creates an invaluable safety net and means that the sudden departure of a leader is a manageable event, not a crisis.
- Make succession planning part of your culture
Because it can take time — potentially, years — to help talented staff members develop into confident and well-prepared business leaders, it can be difficult to treat the succession planning process with the ongoing sense of urgency it requires. The effectiveness of a succession planning program depends largely on active and visible support by top management. Their engagement sends a powerful message throughout the organisation that such efforts are essential to the firm’s long-term vitality.
- Do a trial run
Holiday cover is a great opportunity to have a potential successor step in to assume some higher responsibilities. The employee will gain experience while you learn how prepared the person is to take on a bigger role.
- Use your succession plan to develop a hiring strategy
Once you’ve identified internal employees as successors for key roles in your organisation, take note of any talent gaps. In this way, a succession plan can help you identify where to focus your recruiting efforts.
- Almost two thirds (62%) of finance executives state they now have a formal succession plan in place, with only 6% claiming not to have one
- 95% are confident in their businesses’ ability to operate effectively should a senior executive step down
- Robert Half offers employers tips for efficient succession planning within the workplace