All businesses lose good leaders and employees from time to time, and filling critical vacancies can be expensive, time consuming, and challenging. Companies that fail to plan for executive retirement and employee turnover lose thousands, sometimes millions of dollars on recruiting and training employees. Despite knowing this, companies across the finance sector fail to form an effective succession plan. For example, a recent survey conducted by the National Society of Accountants revealed that less than one-third of firms polled have a succession plan. It’s essential to have a plan in place to transfer firm ownership and to replace talent throughout the company.
Spend time identifying the qualities you are looking for in leadership and staff. These should go beyond the traditional position description and align with the company’s values. The criteria can be turned into a dashboard for grading candidates in an objective manner. Focus groups are a helpful tool for maintaining objectivity and garnering commitment from stakeholders.
Look Internally - With Outside Help
Examine the pool of talent that exists within your firm already, and consider seeking help from an outside firm in doing so. This way, you won’t single out favourites and you’ll be able to extend your equal opportunity employment policies to your succession plan.
Retain and Develop Your Talent
Once you have identified your internal candidates, allow them to participate in assignments that will allow them to display leadership skills, gain recognition for their contributions, and develop the qualities you established as essential criteria for successor candidates. Provide adequate coaching and comprehensive feedback, allowing candidates to make and learn from mistakes. Measure the succession of candidates, and reward them accordingly. While we know that employees who are motivated solely by money do not make for great leaders, it is important to compensate employees appropriately for their contributions.
Keep an Open Mind
Research shows that the most successful succession plans are transparent and continually reviewed. Remaining open to review will keep the succession process from becoming too political, and providing managers with proper training will help them identify those who might become part of the succession planning process. If the views of managers about the capabilities of their staff are at odds with outside sources, the firm needs to clearly define and communicate standards of performance to managers.
You won’t want to rush the process of training and onboarding candidates, so it’s best to act sooner rather than later. You can download succession plan templates from business.gov.au and feel free to reach out to us at amge+ for additional tips.