It's a common topic in both tech circles and politics today: outsourcing, and how the flow of jobs offshore impacts a business' workforce. While the pros and cons of offshoring are an oft debated subject, there is another phenomenon that can have as big of an effect on a company. That phenomenon is succession, the transition of leadership from one company generation to the next. It's a subject that has increasingly gained attention as the baby boomer era reaches retirement age and begins passing on the corporate reins.
In fact, in recent research, the Aberdeen Group found that 90% of companies are currently positioning succession planning as a key retention strategy. Interestingly, however, Aberdeen also found that only 23% of those companies are investing in technology to improve the succession process. In the study, Aberdeen asked respondents to rank the top succession challenges; key results included:
61% of respondents said that a lack of funding for leadership development was a top challenge to succession planning
56% rated the inability to locate or create a talent pool of candidates as a pressing concern.
29% cited a lack of data on competitive salary and benefits as a hinderence
29% stated that the secretive nature of the succession strategy got in the way of finding qualified candidates.
24% of respondents said that the subject wasn't of interest to the current executive management teams.
The Aberdeen research also asked respondents to rank their business's responses to those challenges. Key results included:
90% of respondents put positioning succession planning as a key retention strategy within the company as their primary business response.
23% of respondents said that their company was acquiring or had acquired automated tools to track employees with management potential.
12% said that their company relied on outside agencies to recruit successors when needed.
The research results raise potentially interesting questions. A recent SkillSoft survey found that a large percentage of IT workers felt underutilized, bored, and under-compensated. Juxtapose the numbers in that survey against the lack of funding and a talent pool cited above, and it is possible to envision a negative process flow: a lack of leadership development funding leads to underutilized, underdeveloped workers, which in turn leave businesses without a pool of talent to pull from.
So what is to be done? Aberdeen cites a three phase plan in their research. The first phase is to develop a firm understanding of workforce potential and the areas of retention risk. The second phase is to address those areas of risk by creating internally developed pools of talent. Finally, the third phase is to actually fill succession vacancies from those talent pools. Underlying and encompassing each stage are the following principles:
Support from the CEO and top executives
Creation of a talent- and performance-oriented mindset
Creation of data-driven decision making processes
Alignment of the succession plan with the overall strategic plan of the company
It might not be perfect, but it's a plan. In an era in which technology is allowing talent and services to move more fluidly, creating and retaining internal talent could be a business's best bet.
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