Succession at the workplace

The impact of the quasi recession that we are fast approaching, mainly due to the current economic crisis around the globe, is not really evident within the local labour market. Quality jobs and mobility of labour within the local market is not a rarity. Career advancement and job opportunities for first timers have gained momentum during the past few years.

The trends show that more prosperity is envisaged in the near future as a result of diversification in the manufacturing industry (especially those business sectors attracting high added value) and in view of further expansion in the service industry including the financial sector and the fast-growing information technology market.

Although this transformation within the local labour market is in itself a positive achievement in terms of the supply of quality jobs and investment opportunities it also creates new challenges within our organisations' set up and to the management of human resources irrespective of whether it is a large corporation or a small or medium-sized enterprise.

Given this scenario, it is a fact of business life that employees are going to resign, retire or move into higher positions. When these kinds of events occur, the management would end up launching time-consuming and expensive external searches to find replacements unless a "succession plan" is put in place as an integral part of the organisation's policy. It seems that most of our firms do not consider succession planning as a vital management function in order to safeguard the future continuity of the organisation. Perhaps such an approach is mostly evident in our SMEs, which, in their majority, are family owned and, therefore, succession within the organisation has been considered as part and parcel of the family inheritance. Once the father retires it was obvious that his son or daughter would take up his role within the family business.

Generally speaking, succession management is defined as the development of a pool of talent with the skills, attributes and experiences to fill specific, often high-level positions. Normally, organisations start with a thorough assessment process to forecast and identify business and leadership needs of the future with a view to establish the type of talent they would need within the organisation to meet the challenges of the future.

Today's reality show that in the next 10 years or so there will be a decline of about 15 per cent in the number of managers available for top management slots. Also, since women are no longer surging into the workforce, white-collar productivity improvements have flattened and the fact that executives are not prolonging their careers the problem of succession management is becoming even more acute.

Sadly, the phenomenon of downsizing has caused many organisations to eliminate the middle managers who were the traditional source of executive talent, leaving younger managers without mentors. Hiring external candidates is not only costly but recent studies reveal that a staggering 60 per cent of senior managers hired from the outside usually fail within the first 18 months.

Succession management requires a clear view of the organisation's specific information such as the positions they may need to be filled, the job and industry-specific competencies, expected timeframe, assessment of internal talent, creation of high potential pool, support of succession candidates and sourcing external candidates if necessary.

Research shows that succession plans that truly work are those that receive visible support from the top management.

Such plans would need to identify key leadership criteria and then earmark the future leaders and motivate them. It has been proven that future leaders would be more successful if they are subjected to assignments that stretch and challenge rather than offering them a strict compensation-reward system.

Succession plans should also be made simple and tailor made to unique organisational needs. They should also incorporate employee input and should emphasise accountability and follow-up. It is essential to retain a focus on core values thus reinforcing the corporate's culture.

Succession planning should be looked at as one of the organisational priorities in leadership development. It is a process that anticipates the complexities of future business needs while translating leadership potential into reality. It is no wonder that, in today's changing business environment, where we see less employee loyalty, CEOs devote more than half their time to developing people.

matyas@maltanet.net