Recruitment agency Inspired Search & Selection has published a white paper on succession planning. Abigail Barclay discusses the findings
What are the factors that necessitate new approaches to succession planning?
Abigail Barclay: This paper responds to three key factors. First, there was a change in legislation in 2011 which means that there is no longer a default retirement age. While this has its obvious benefits, it can reduce the control that companies have over bringing up the discussion with staff about retirement. This can impact on the level of planning that can be done.
Second, as "millennials" develop through the ranks, we have more and more of them in our senior management teams. Again, this comes with many advantages, as there is undoubtedly some terrific talent in this generation. However, they are known for their desire to move around, both in jobs and in careers. This means that while we might have a plan in place for our next successor internally, it may be their personal plan for success to move on.
Third, and this will be no surprise, the publishing industry is changing! As we make our five-year business plans, it may be that the direction we want to go in requires skills that we simply don't have in our businesses. Using an approach that plans ahead by looking outside our organisation charts can really help to ensure we move forward in the way we want to.
Outline the research that informs this report.
Abigail Barclay: This report combines a number of pieces of research collated through desk research, such as studies conducted by Deloitte. However, the core of the research is primary, qualitative research in the form of a series of in-depth interviews that I have held with CEOs, MDs and HR directors.
This gives us first-hand information about the current challenges and practices of succession planning.
You suggest that organisations should carry out annual reviews as well as appraisals. Why is this?
Abigail Barclay: The annual review is a board level discussion on the state of the business. It will look at business objectives for the next one, three and five years. The board will look at what it needs to do - including the people and skills it needs - in order to achieve these objectives.
This process will also highlight how close the business is to having the skills it needs. The white paper talks through how to do a gap analysis - find the gaps in talent between what you have and what you need.
The outcomes can feed into individual staff appraisals as line managers make plans with staff that see them developing skills that will, in time, help drive the business forward, in line with the business objectives set out in the annual review.
What strategies do you recommend for staff retention?
Abigail Barclay: Identifying what talents you have internally is only half the battle - you need to retain them! Everyone is different and has different things that will motivate them to stay. However, as a general rule, I would look at the Four Es when it comes to retention:
1. Experience - is their current overall experience of working life satisfying? Environment, flexibility etc?
2. Education - is there additional training that would be beneficial and attractive for them?
3. Exposure - are there other areas of the business that would be interesting for them to experience?
4. Engagement - are they really bought into the company vision and can they see how their role plays a part in realising it?
When should companies look elsewhere?
Abigail Barclay: Internal talent comes with several benefits; but yes, there are situations when bringing in someone from an external company can be really helpful.
These include when: a major change needs to take place; you need new knowledge; promoting internally could cause disruption - for example when it's too challenging for someone to manage people who were previously peers; you need diversity in your ideas or you need to challenge the status quo.
Many companies find it best practice always to look outside the internal talent pool, believing it ensures they get the best person for the job. Even if they do end up hiring internally, the peace of mind that they've not missed a trick is reassuring.
How far ahead should succession planning take place?
Abigail Barclay: Ideally 12-18 months - which will naturally happen if you're building it into your annual reviews as a board. This gives you time fully to review the needs of the business and explore and prepare internal talent. Then you have plenty of time to map the talent market, often with a search firm, and fully qualify and interview people before allowing for lengthy notice periods.
What are your recommendations for the handover process?
Abigail Barclay: We would recommend a three-staged approach. This starts with a period of both the current incumbent and the new individual working closely together. However, you want to quickly have the new person taking the reins before they take sole responsibility. The handover should be one of processes, not ideas, and the quicker you can get the new person up to speed on the processes the better.
For a free copy of "Planning for the Future: Why the approach to succession planning needs to change", contact Abigail Barclay: 020 3668 6727; email@example.com.