Succession planning will be more critical in the future, but here is why you should start planning now, supported by a future of work solution – People First.
Most businesses have some form of succession planning, and over the last few years, I’ve seen an increasing interest in the topic. But despite this increasing interest, are businesses really planning for the future of work or simply trying to solve the problems they have today?
Definition: Succession planning is the process of identifying and developing potential future leaders or senior managers, as well as individuals to fill other business-critical positions, either in the short- or the long-term. (CIPD)
Over the last 20 years, we have progressively moved to a more technical environment – and this isn’t just limited to an office. I’m sure that many people will have seen the robot that can lay bricks faster than humans. The world of work is changing, and the future role of the builders in this video will be around quality assurance as automation removes the heavy work.
Field engineers, stock assistants, delivery agents and checkout operators have an increasing set of technical tools to conduct their role. Handheld devices, barcode scanners and infra-red thermometers are all necessary tools, not optional extras. In the office, it’s even more apparent that technology has led to a need for IT literacy and, more importantly, confidence across a range of solutions.
As millennials start to move into these jobs, the level of basic IT training once required will diminish as it becomes the norm for employee to have the confidence and ability to use technology. But this is where a greater problem lies. According to the Office for National Statistics, 63.5% of the UK population is between 16-64, but by 2034 this is expected to fall to 58.5%. So before skill mix is considered, there will already be a shortage of people available for employment. And automation will have replaced some jobs, meaning that the training for some skills will have reduced but the skills for other jobs will have increased.
I have worked with several businesses in recent years who are already starting to feel the pinch, where skills are not available as some employees come up to retirement. These skills seem to be dying out with the previous generation. And for one of these companies, they have no answer for it. For other companies, they are fishing in a small pool of people with the specialist qualifications and experience necessary for their industry. They don’t have the appetite to grow their people internally, and they know that a crisis is looming.
The ROI for succession planning is that your business will still exist in five years.
In the 1980s, I attended many careers conferences as a keen teenager, trying to understand what the world of work had in store for me. I looked at a range of training options across every industry where training schemes were in place, qualifications were funded, and experience was available through a series of secondments/placements. My kids are now at that same point in life and the options aren’t the same. This makes me wonder if companies are truly developing their future talent or relying on someone else to do this for them.
Businesses need to examine what talent profile is required for each job. Think about the blend of competencies, qualifications and memberships. This is where most businesses begin to struggle, as they have never really had to plan for this in the past. The worst mistake to make is to assess what the current incumbent has and then search for a direct replacement. This is backward looking.
If you’re about to embark on succession planning or just need to review the work you’ve done so far, this is your chance to look to the future. Remember that the future of work will bring more project teams, flatter structures and tours of duty. Traditional hierarchies will need to be disbanded to provide the flexibility and adaptability to deliver a competitive advantage. Eric Qualman noted in Socialnomics that the ‘ROI of social media is that your business will still exist in five years’ time.’ Well, succession planning is no different. To borrow from Eric, my belief is that the ROI for succession planning is that your business will still exist in five years.
People mistakenly believe that succession planning is only relevant at the executive levels of an organisation. To support cross-team working for the future of work, this needs to be reversed. Succession planning is more important at the lower levels to enable the rapid change of focus and delivery of effort. If this is not possible, succession planning for a CEO will be irrelevant, as the business won’t exist.
7 key points to consider when you’re reviewing your succession planning:
- How will a more flexible structure support our business outcomes?
- How can we better use our skills to deliver future outcomes in project teams?
- Where are our current skills shortages?
- What skills do we need in the next year?
- Does our HRIS allow for key jobs to be identified?
- Does our HRIS allow successors to be identified?
- Does our HRIS store a successor’s level of preparedness to take on the new job?
Through a recruitment agency, typical costs are 25% of the employee’s salary. If you want to use this route to find people with the right qualifications, memberships and competencies, it’s a truly expensive deal. Sourcing people through short-term contracts or on an interim basis can also prove expensive when the requirement is ongoing. Growing people from within with the necessary skill mix is the only sustainable solution. And if you can wrap this up in an HRIS where employees can see the requirements for their job or any other job, and then apply for courses to achieve the requirements of the job, you will have also extended your employee engagement.
This is all possible through People First, where managers can use a powerful match-and-gap analysis to see suitable successors for their key jobs. Once a gap is identified, the learning function can be used to either book onto a course or request a course that isn’t yet provided. Not only does this maximise the use of internal training courses, but it also provides a quick training needs analysis where additional courses can be procured individually or in bulk as the demand is identified. People First can keep pace with the changing needs of jobs to help leaders ensure they have a skilled workforce that is focused on the future, not the past.
Now is the time to reconsider your succession planning from the bottom of the organisation chart to ensure you’re ready for these changes.