In the past five years, Britain has gone from yielding alarming rates of unemployment to boasting a record-high figure of 30.9 million1 in work.
It’s not only the statistic that has changed; the mind-set of Britain’s workforce has too. No longer are workers looking for a ‘job for life’ – around 650,0002 people move from one job to another every quarter.
Call it a cost of living crisis or a symptom of the Gen X uprising – businesses without an appropriate succession plan are in an extremely vulnerable position.
Whilst six in ten3 companies do have some kind of back-up plan in place should key members of staff leave, it’s estimated that around 80% of companies would need at least a year to find a suitable replacement for senior employees.
A year is a long time in business. Below, we’ve listed the best succession planning methods for businesses that couldn’t afford to have instrumental positions to fill.
INTERNAL SUCCESSION PLANNING: TALENT BENCH REVIEW AND THE 9-BOX GRID
The most straightforward succession planning method is the talent bench review, which enables business managers to assess who should be developed, who should be groomed for leadership, and in some cases, who should be moved to another role.
Providing your assessments are based on real examples of consistent behaviour demonstrated by employees, and as long as your performance criteria is concisely defined to ensure accuracy regardless of who carries out the review, the talent bench review should lower the risk of keeping the wrong people in the wrong roles.
You could use the following assessment criteria to shape your company’s talent bench review:
What the employee does and how they do it.
- Weak performer
- Solid performer
- Strong performer
The job level an individual could reach (under the best working conditions) if their current level of performance is maintained.
- Current role only/current role is a bad fit
- Good fit at current level/could move up one level
- Potential for upward mobility of more than one level
You may also wish to consider the individual’s learning needs.
- Requires significantly more than twelve months to develop
- Should develop in current role for more than twelve months before advancing
- Can take next development step within twelve months
The 9-box grid is a natural extension of the talent bench review, visually plotting employee performance against potential to provide HR practitioners and managers with a talent review tool that can be used on an on-going basis to measure development within the company.
This approach requires the leadership team to work collaboratively to arrange every employee into one of nine categories across a vertical and horizontal axis. Potential level runs from low to high vertically whilst performance level runs from left to right horizontally, as demonstrated in the diagram below.
Once an employee reaches the box in the top, right-hand corner, they are ready to progress.
Why use these internal assessment methods for succession planning?
- Simple assessment technique that can be used across industries
- Triggers insightful dialog amongst members of the leadership team
- Typically sparks shared ownership and accountability for a company’s talent pool
- Useful way to identify development needs within an organisation
EXTERNAL SUCCESSION PLANNING: IDENTIFY BUSINESS NEEDS, LOCATE EXTERNAL TALENT AND NURTURE RELATIONSHIPS WITH THEM
The fact is that 650,000 employees are moving companies every quarter. You could receive a resignation notice from a key member of staff completely out of the blue – even from that star employee at the top right of your 9-box grid – thus relying on an internal succession plan may no longer be enough.
External succession planning is a necessary precaution to take in the current climate. If you’ve got the resources and time to nurture external talent, you can do this in-house; otherwise, you can hire a recruitment agent to line up potential successors for the key roles within your organisation.
Below are three important aspects to consider when succession planning eternally.
Identify target positions
These will include:
- roles that are likely to require replacement talent in the next 6 to 18 months
- positions with no qualified internal candidates on the bench
- positions that only have one qualified candidate in line and you would prefer the option to choose if an opening becomes available
- departments that would benefit from new ideas, perspectives or experience
- roles within growth areas where you aim to develop new products, new customers or venture into new geographic regions.
Source external talent
Your company’s consultants, partners, suppliers, and even your customers, all have the potential to be your future employees. What’s more, LinkedIn has made it easy to research talent even further, right down to the industry, job title or skillset you need to form your external succession plan.
However, poaching talent from a competitor is frowned upon and many companies now write an anti-poaching clause into employee contracts, thus the response you get from this method may be limited.
Recruiters are often a good solution to this, as you’ll receive the confidentiality you require. Approach a recruitment agency that specialises in your industry (as opposed to hiring a bigger agent that adopts the one-glove-fits-all approach) to expand your network with a refined selection of suitable professionals.
Build relationships with external talent
If you work with a recruiter, they’ll do this for you. If you’re going to be nurturing external talent yourself, just be careful to maintain a high level of tact throughout.
The process will involve regularly meeting the people you would eventually like to join your company at professional events they attend, and providing they don’t work for a competitor, even asking them to serve as an external consultant on specific projects.
You’ll need to find the right time to ask personal questions about their career aspirations, and be prepared to carry out a side-by-side comparison of the opportunities they have available within their current role and the reason your company is the better one to work for.
After about six months, you may decide to tell them about your external succession plan and how you’d like them to be a part of it.
Why implement an external succession plan?
- With official statistics stating that 650,000 employees leave one company for another each quarter, your internal succession planning could fall through if any of your star players resign
- Workforces generally respond better to external replacements as it can be hard to adjust to the hierarchal change that internal promotions produce
- Forming relationships with external talent, whether it’s through a recruitment agent or directly, can often bring other business opportunities to light, including the acquisition of new partners and customers
1 Liberal Democrats, 2015. UK employment at record high of 30.9 million. [Online] Available at: http://www.libdems.org.uk/uk-employment-record-high.
2 Financial Times, 2015. I quit! Job resignations and the UK labour puzzle. [Online] http://blogs.ft.com/ftdata/2015/03/25/i-quit-job-resignations-and-the-uk-labour-puzzle/.
3 CEO World Magazine, 2014. Succession Planning: Organizations Still Have Some Work to Do. [Online] Available at: http://ceoworld.biz/2014/02/26/succession-planning-organizations-still-have-some-work-to-do-198085.
[All information sources accessed 15th April 2015].