There are two major influences which are likely to impact our ability to hire and retain staff within the next two to five years. First, the recession has provided a larger talent pool to employers, resulting in lower salaries, whilst jobseekers have increasingly flexible salary expectations.
It is conceivable therefore that some employers believe that the current market provides them with an opportunity to recruit excellent candidates at low rates. However, if employers continue to offer below market rate salaries and salary freezes, employees will feel undervalued, unappreciated and stagnated in their careers.
According to a 2009 EDGE Report from Robert Half International and CareerBuilder, 55 per cent of workers polled have plans to change careers, find new employers or go back to school when the economy recovers. What is important to remember is that hiring talented staff is only beneficial to an organisation if they are retained.
Secondly, next year Asia’s contribution to global GDP will be the largest in the world. As economic power is redistributed, talent will naturally follow it. Many Asian nations place high value on superior leadership and Asian companies are becoming more aggressive in their search for talent. The substantial demand for skilled employees in Asia is driving innovation in acquiring, developing and retaining talent.
Unless comprehensive succession plans are put in place, companies are unlikely to be prepared for the loss of key staff and their accompanying skills.
Succession planning is defined by Wikipedia as, “a process for identifying and developing internal personnel with the potential to fill key or critical organisational positions. Succession planning ensures the availability of experienced and capable employees that are prepared to assume these roles as they become available.”
According to a recent Chartered Institute of Personnel and Development survey, succession planning becomes more, not less important in an economic downturn. During uncertain times, it is more significant than ever to know the company’s key talents and how to develop people to meet short and long term business needs.
Succession planning traditionally focused on organisational needs and senior management positions. The plan was typically structured, mechanistic, top down and often secretive; aimed at identifying internal successors for senior positions. This type of succession planning works reasonably well in a stable environment where structures are fixed and careers are long term. However, in today’s changing environment, with employees changing jobs every two to five years and flatter organisational structures, this method of planning is less effective.
As organisations differ in size, industry and scope, there is no one right model for succession planning and there are no hard-and-fast rules. The modern succession plan should incorporate the following:
- Those responsible for succession planning need to know the competencies that are required by the company to achieve its goals together with information about the future of the business;
- Succession planning should commence well in advance of an expected succession so that the transfer of responsibility can be a gradual process rather than a sudden dramatic event;
- Identify people within the organisation who have the potential to fill key roles, both now and in the future; know who could step in immediately, who could assist in a few years time and who will be leading the company in the longer term. Management can then identify and develop strengths of these employees and provide training to assist with weaknesses;
- Increased emphasis on the individual leads to greater openness and transparency. Qualifications and experience are important but the qualities that make managers and leaders are essential and are often more difficult to define;
- Employees increasingly need to make their own career decisions. So the emphasis should be on balancing the aspirations of individuals with those of the company;
- Traditionally, employees have gained experience through promotions, with accompanying increases in status and salary. In the current economy, this may not be possible as organisations are less hierarchical, with fewer management layers. One option to provide wider development opportunities is to offer secondments.
In conclusion, companies frequently put off succession planning because it doesn’t look like a value adding process. However all organisations need leaders and employees with a range of experience. Investing in existing employees and working to improve their skills provide time and money savings for the organisation and a sense of achievement and career fulfillment for employees. Without a succession plan, companies can succumb to panic hiring, poor performance, failure to implement strategic plans and multiple other consequences simply because they were not prepared.