art 4 of our Succession Planning month, looking some common misconceptions and issues with your succession plan and how to solve them.In the final instalment of our succession planning month, we are going to discuss misconceptions and issues faced in succession planning, and how you can work through them to successfully plan for an exit of a business-critical employee.
Why is succession planning important?
With the ever-changing markets and uncertainty in the economy currently, there has never been a more important time to be prepared for every eventuality and being prepared for the future is essential when it comes to developing your recruitment business.
Succession planning is a process of preparing a structured plan to protect your business against the ill effects of staff turnover. Despite thinking “it won’t happen to us”, staff do leave companies. They may decide to move to a different area of the country or leave the country completely, they may leave to have children or to retire, all of which are outside of your control.
The unexpected and unplanned exit of a business-critical employee can have a disastrous effect on your business. The average cost to business on the downtime period between a business-critical employee leaving and their new successor (hired or promoted) reaching their optimal performance is £25,181, according to a study by Oxford Economics, 2014.
So how do you go about creating a succession plan to reduce this impact as much as possible? In one of our recent blog articles, as part of our succession planning month we talk you through how do you write a bulletproof succession plan. By following this, you can start to get a plan in place in your business today.
With succession planning being such a large subject with a great deal of content and preconceived notions about how it should be done, you’ll be forgiven for believing a few of these misconceptions surrounding succession planning..
Common Misconceptions Associated with Succession Planning
- Succession planning is only for executive roles
- Succession planning should be for any business-critical role. Any role that is critical to the day-to-day running of your business should be planned for, as it would have a detrimental effect on the business if the role were empty.
- Also if an internal successor moves up into an executive position, it is likely that the role that they have come from is also business-critical, so this will need filling too.
- We need to find an internal successor
- There are two routes that you can take to find a successor for a business-critical role, internal and external. Internal successors are potentially less risky, but lots of companies frequently find successful external successors.
- What has worked well in the past will work well again
- Filling the business-critical role with a carbon copy of the previous employee may not necessarily be the best option. Sometimes a new set of eyes and perspective can take the business even further.
- We have identified an internal successor, so we don’t need to look externally
- A good, fully comprehensive succession plan will consider all options. To be fully prepared for the future you must set a plan in place so that if your identified internal successor were to leave before the business-critical employee you would not be left with a gap. Having a plan in place will help you to fill that gap quicker should the need arise.
- Internal successors need to be ready to fill the role now
- Succession planning should enable you to develop your employees, enabling the identified successor to step up into the role, not sideways. They will never be truly ready until they are in the role, and if they are ready then they may not hang around for the role to become open. It is likely that they will be in such a role, whether in your company, or in another.
Common Issues Faced in Succession Planning
- Not enough time to put a plan in place
- This is a common excuse when it comes to succession planning resulting in many companies not having one. Fail to prepare, prepare to fail, preparing for these situations will definitely save time in the long run.
- We do not have an internal successor
- This is exactly why it is essential to go through the process of planning ahead. If you do not have a suitable internal successor you are in even more danger from the effects of an ill-fated exit. To prepare for finding an external successor you may want to budget your time and money for the recruitment process.
- We have too many internal successors
- This issue is slightly less common, but a problem nonetheless. How do you choose who will be the best fit for the role? By objectively assessing what it is you need from the business-critical employee you can draw up a comprehensive job description to assess everyone against. This gives everyone a fair shot. It is important to encourage all high potential employees and nurture their talent, as they may be suitable to move up into another role instead.
- We don’t know where to look for a suitable external successor
- Depending on the role that you are planning for there are different places to search for a successor. Knowing your industry and where to advertise the specific role is crucial. Rec to Rec agencies are a great place to start, on top of using your network of contacts to find the right person outside of your business.
- We struggle to attract the right person for the role
- Assessing the current condition of your company and whether it is a good place to work is the best place to start. After addressing any issues you find from assessing the current condition. If you still struggle to find the right talent, maybe widen your net and mindset about exactly what you’re looking for from your new employee.
- Disney is a prime example of what can happen when a company struggles to find an appropriate successor for a business-critical role. Bob Iger has been CEO at Disney since 2005 and back in March of this year had his term extended by another year to 2019. This will mean that by the time his term is up he will be 68. The reason for his term being extended is down to their struggle to find the right successor, which puts them in a vulnerable position if anything were to happen to Iger in the next two years.
Sudden Exit of Your Business-Critical Employee, No Succession Plan in Place – What Next?
So, you’re suddenly left with a gap and no one in a business-critical role, but you failed to plan for their exit, what do you do? Here we look at the key points to run through in this kind of emergency.
- Quickly assess your internal talent
- Internal talent is definitely the best place to start when it comes to filling a business-critical role. They know your business, your culture, your clients and your candidates.
- If there are no suitable internal successors to take over the role permanently, then are there any who can take over the role temporarily?
- Search for an external successor
- Is there anyone you had your eye on before the business-critical employee departed? This is the time to get in touch with them.
- To help with the workload, is there any contacts you have in your network who can help to lighten the load?
- Working together with other companies has many benefits, this being one of them. If you have other companies or contacts who can step in temporarily to lessen the potential damage through the gap that has arisen. The Recruitment Network Club is a great example of a community of business who come together to share knowledge and insight into their businesses. Through the club, recruitment business owners develop contacts and friendships with others who can help in times of need.
The key take home message here is that every business leader should make time for succession planning. We know that it is easier said than done, and there are many things that we wish we had more time for, but if there are roles in your business that are truly business-critical then you need a plan in place to protect you against changes to these roles and employees.