5 minute read
HR systems and technology
Why succession planning is the secret to keeping your star talent
Brian Donn from Ceridian, Australia and New Zealand, looks at how succession planning, when done well, could be a crucial tool in managing talent.
In today’s competitive market, employee retention is complex, and employers are increasingly looking beyond pay and benefits to fulfil and motivate workers. One key piece of this puzzle is succession planning across all levels of an organisation, including leadership. While many are doing a great job of putting policies into practice, their plans aren’t always translating into success.
In Ceridian’s 2022 Executive Survey of 2,000 leaders around the globe, 92 per cent of respondents from Australia and New Zealand (ANZ) say their company uses succession planning, yet an overwhelming majority (84 per cent) suggest they often or always hire external candidates for leadership roles as opposed to promoting from within. Plus, many indicate their succession plans are incomplete.
Succession planning is more than ensuring adequate bench strength for an organisation’s critical roles. It provides a clear opportunity for employees to see their career progression, set training goals and identify future opportunities with their employer. This, in turn, boosts employee retention while also bringing broader benefits to their organisation. In fact, when looking at our research, almost all (99 per cent) of ANZ business leaders said their organisations were looking for boomerang talent – former employees – to fill vacancies. While hiring external candidates can make strategic sense for some roles, sound succession planning can help avoid the need to re-hire talent.
In the current climate, employers need to be prudent about how they manage their talent. Without an ongoing discussion around proper succession planning, business leaders can be left scrambling to fill the void when key team members depart. But when done correctly, succession planning can lead to improved employee engagement and reinforce a company’s purpose across the entire workforce. The following are some pitfalls employers should avoid when building out an effective succession planning strategy.
Not integrating succession plans company-wide
Our 2022 Executive Survey paints a picture of organisations that have implemented succession planning as a policy but haven’t taken care to ensure that these plans are impactful. Unsurprisingly, they continue to experience problems like lengthy vacancies for key leadership roles. More than half (65 per cent) of ANZ respondents stated that these roles go unfilled for four months or longer.
While HR will play a central role in succession-planning strategies and initiatives, it can’t be solely responsible for their success. To be effective, succession planning must be a company-wide initiative that is seen as an evolving process rather than words on a page.
Focusing only on senior leaders
Ceridian’s research also found that while leaders recognise the value of middle managers, they aren’t always great at supporting them. When respondents were asked how their organisations support middle managers, less than half (48 per cent) said their organisation offers management training programmes.
A lack of comprehensive leadership development guidance and mentoring often leaves middle managers feeling less secure. Without adequate support, middle managers can be quite vulnerable, especially because they were promoted into supervisory positions much earlier than was usual with earlier generations. All these factors contribute to a lack of strong succession planning that would help elevate these individuals into more senior leadership positions over time.
In our findings, we witnessed a heavy focus on succession planning for senior leadership versus other types of roles. For example, 65 per cent of ANZ respondents say they use succession planning for senior leadership roles, but this number falls to 60 per cent for critical technical experts, 61 per cent for subject matter experts and 50 per cent for people leaders. Succession plans should be broad and consider the entire organisation holistically.
Not leveraging data or succession-planning tools
Our Executive Survey revealed only 58 per cent of ANZ respondents currently use technology to map talent or identify leaders. Succession planning shouldn’t be a subjective process. It should lead with a datadriven approach over intuition.
Companies should leverage technology to help with succession planning. The right tools can help leaders create coverage plans for key roles to lessen risk and help reduce regrettable turnover. They can help track readiness for promotions and support employees’ ongoing development.
Succession-planning software allows organisations to make more informed decisions about employee career paths based on performance, flight risk, compensation and other essential data. It also helps keep succession planning top of mind, rather than only turning to it when a successor is needed.
Ultimately, to create effective succession plans that have substance, business leaders need to follow three key rules.
1. Invest in technology to proactively identify and develop employees, to fill key roles before turnover occurs.
2. Broaden the scope of succession planning beyond senior leadership, to keep your business running smoothly.
3. Track employee potential and readiness for promotion, to help identify where employees are in their career paths.
If the data from this year’s Executive Survey tells us one thing, it is that succession plans are an effective tool for improving employee retention efforts, but they are especially critical today.
Brian Donn is the Managing Director of Ceridian in Australia and New Zealand. With more than 20 years of market experience, Brian has held leadership positions across the Asia-Pacific region, including Oracle, Verint Systems Inc, KANA Software and Sword Group. At Ceridian, Brian is focused on empowering customers with the digital transformation of their people processes in a constantly changing world of work.
