Human resources expert shares effective, actionable tips for how you can start succession planning
Research shows that most business owners are not as concerned with succession planning as they should be. Only a small minority of businesses have a succession plan for when their CEOs retire or switch companies, and this can be a very costly mistake.
“Scrambling for a CEO has been shown to cost upwards of $1.8 billion in shareholder value for public companies,” says Rob Wilson, employment trends expert and President of Employco USA, a national employment solutions firm. “Another issue with lack of preparedness around successions is that companies end up hiring ineffective CEOs, which again harms a company’s bottom line and employee performance. Indeed, 27 percent of companies have been negatively impacted by poor succession planning.”
Wilson also points out that C-level employees are not the only ones who pose a serious loss to the company when they leave. “Whether it’s a key person in your I.T. department or your marketing department, losing long-term, highly-skilled and experienced staff is going to be a blow to your company.”
So, what should employers do to ensure that these successions are as smooth and seamless as possible?
“First, look at your key personnel on every level of your staff,” says Wilson. “How deep is your bench? Don’t presume that just because an employee is young and not near retirement that you don’t need to worry about their successor at some point. Be prepared for all possible scenarios, including family emergencies, health crises and leaving the state for spouse’s employment changes or other reasons.”
Once you identify the key roles in your company, implement in-house training programs which will allow employees to share their knowledge with one another and develop new skills which will be beneficial to the company.
“View your employees’ knowledge and experience as one of your greatest resources, a resource you want to protect and cultivate. Make sure you understand the duties that your key staff performs each day so that you can be capable of effectively filling this position when the time arises.”
Wilson also says that you should look into your current staff to see if there might be possible successors that could be mentored into growing into this new position.
“Make sure that your employees understand that you are asking these questions and investigating successors only as a future insurance plan, not as a current concern,” says Wilson. “You don’t want employees to be worried about termination or being replaced.”
For more on this topic, please contact Rob Wilson at rwilson@thewilsoncompanies.com.