Succession planning: The secret ingredient to retain top talent
There is not a business function that hit the spotlight more than the human resources department to help companies maintain operations since the start of the pandemic.
With the third summer of COVID-19 upon us, new challenges continue to fall on their desks. In today’s competitive market, HR leaders need to prioritise talent management efforts to attract, retain, and grow engaged high-performing teams. One key piece of this puzzle is succession planning. Although companies are doing a great job of putting policies into practice, their plans are not always translating into success.
In Ceridian’s 2022 Executive Survey of 2,000 leaders around the globe, 91% of Singapore-based respondents say their company uses succession planning, yet 2-in-3 (66%) suggest they often or always hire external candidates for leadership roles as opposed to promoting from within. Plus, many also indicate these succession plans are incomplete.
In Singapore, 87% of respondents use succession planning for senior leadership roles. This drops to 73% for critical technical experts, 61% for subject matter experts (SMEs), and 66% for people leaders.
Succession planning is more than ensuring adequate bench strength for an organisation’s critical roles. In this climate, employers need to be prudent with how they are managing their own talent. Without an ongoing discussion around proper succession planning, business leaders can be left scrambling to fill the void when key team members depart. And when done correctly, it can lead to improved employee engagement, retention, and clarity of mission across the entire workforce.
In fact, Ceridian’s 2022 Executive Survey found that 94% of Singapore-based leaders said their organisations are seeking boomerang talent – former employees – to fill job vacancies. With such disruptive and heightened pressure around talent acquisition, succession planning provides a clear opportunity for employers to fulfil these needs for their workers and boost employee retention while also bringing broader benefits to the business.
Let’s explore what employers should avoid when building out an effective strategy.
Succession planning is not just an HR initiative
To much of our surprise, while companies have succession plans in place to protect their futures, these plans have not been impactful. As a result, some businesses experience lengthy vacancies for key leadership roles: half (51%) of Singapore-based 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, they cannnot be solely responsible for its success. To be effective, it must be a company-wide initiative that is seen as an evolving process rather than words on a page.
Failing to prioritise roles across the organisation
In our Executive Survey findings, we witnessed a heavy focus on succession planning for senior leaders versus other types of roles. Succession plans should be broad and consider the entire organisation holistically. Providing career paths and talent development for employees at all levels can help reduce turnover among your highest performers, as well as in key subject matter expert and technical roles.
“Providing career paths and talent development for employees at all levels can help reduce turnover among your highest performers.” – Rob Squires, Vice President and Head of Sales for Asia and Japan, Ceridian.
Not using succession-planning tools
Our Executive Survey revealed only half (52%) of respondents currently use technology to map talent or identify leaders. But succession planning should not be a subjective process. It should lead with a data-driven 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 reduce risk and help reduce regrettable turnover. It can help track readiness for promotions and support employees’ ongoing development.
Succession-planning software, such as Dayforce offered by Ceridian, 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 when a successor is needed.
Ultimately, to create effective succession plans with substance, business leaders need to follow three key rules: Invest in technology to proactively identify and develop employees to fill key roles before there is turnover; broaden the scope of succession planning beyond senior leadership to keep your business running smoothly; and 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 leaders cannot know what tomorrow will bring, but they can be ready for it by preparing their people, leaders, and systems today.
About the Author: Rob Squires is Vice President and Head of Sales for Asia and Japan, Ceridian. Join him at HR Leadership Series: Live, which is taking place at the Marina Bay Sands Singapore on Thursday, September 8. His session, titled, Making Agility More Than A Mindset, is taking place from 12pm-12.30pm (SGT).