Could someone easily step in and do your job if you left the company today? What about other financial executives in your organization? Who is waiting in the wings to take their place — and are those understudies ready for the spotlight?
If you don’t have a succession plan, you’re not alone — by a long shot. In a recent Robert Half Management Resources survey, just 8 percent of executives in the accounting and finance profession said that someone internally could take over their job immediately.
Twenty-seven percent of executives said someone within their organization could assume their responsibilities, but that person would need training first. And the majority of accounting and finance executives surveyed — 64 percent — said the company would need to hire externally.
Results were similar among management-level respondents. Only 9 percent said someone could step into their role easily, and 39 percent said their successor would need training. Just over half (52 percent) reported that their organization would need to look outside the company for their replacement.
Don’t wait for tomorrow
Because succession planning is about making a plan for the future, and not addressing an immediate business priority, it’s a process that’s often pushed to the back burner. In a related survey that we developed, many chief financial officers said they hadn’t identified a successor yet because they weren’t planning to leave their positions anytime soon.
But Robert Half senior executive director Paul McDonald cautions that not having a succession plan, particularly at the executive level, puts the business at risk. He says, “Succession planning may feel like a long-term initiative, but the pain felt watching a star employee walk out the door with no backup in place is immediate and costly."
So, when is the right time to start thinking about succession planning? During the hiring process, actually. When interviewing candidates for any role in your organization, you should think about their future potential. Could they be groomed someday for leadership roles? More important, would they be interested in building a long-term career at your company?
And don’t forget about your current employees. Take time to talk with staff members about their professional goals, and develop career ladders that can help them to reach their objectives.
Take a wide view
While it’s important to create succession plans for major roles in your organization, avoid focusing only on top positions at the company. There is value in creating succession plans for employees at all levels. It’s an effective way to identify rising stars. Plus, it will help you to pinpoint skills gaps in your team, so you can provide appropriate training.
To help all employees think more about where they are in the “big picture” at your company — and where they might stand in the future — be open about your plans to make succession planning a more formal process. Explain why you are stepping up efforts, how you will be structuring the process, and how succession planning can be a path to new opportunities for top performers.
Have a contingency plan
Change is a fact of life — and business — and companies that are prepared for it are more likely to sustain peak performance. Of course, no matter how well you plan ahead for inevitable changes in the lineup of your team, there’s always the possibility you’ll be caught off guard by a key employee’s sudden departure. So, it’s wise to have a contingency plan for your primary succession plan.
Interim management consultants can be valuable resources in these situations. “For companies that find themselves with a sudden vacancy in an important role, bringing in a consultant can fill the gap while a search is conducted or an employee is groomed for the position,” says McDonald.