Financial Services Falling Behind With Succession Planning
• But those who are doing it are doing it well – looking to the long-term as well as the short-term; and look at more than the top layer of management
Financial services employers are lagging behind the rest of the UK when it comes to succession planning, research from Randstad Financial & Professional, the specialist financial services recruiter, has found.
According to Workpocket 2014/15, Randstad’s guide to HR, published today, succession planning focuses on identifying potential future leaders to fill key positions. In a climate of talent shortage and lack of confidence in leadership potential, there is renewed interest in succession planning – 57 per cent of HR directors working in financial services say it is likely to become a higher priority in the future.
But a poll of 100 leading HR directors suggested 25 per cent of financial services employers are failing to undertake succession planning of any kind – compared to 21 per cent of employers across the UK and 23 per across the US .
Tara Ricks, MD of Randstad Financial & Professional said: “Sound succession planning is not just about risk-mitigation. It helps to ensure employees know they’re being groomed for a particular position, which gives them a strong sense of having a clearly defined future within the company. This is a powerful retention tool and keeps people from leaving their company for greener pastures. With the growing talent shortage at senior and middle manager level, it’s more important than it has been for years especially as it’s no longer possible to rely on pay packets and bonuses to retain the best top 15 per cent of your workforce. But it has to be done well. “
BUT THOSE WHO ARE COMMITTED TO IT ARE DOING IT WELL
However, the poll did reveal that more than a third of HR directors in financial services (34 per cent) believe succession planning is now being taken more seriously than it was in 2006, before the recession hit.
Less than half (44 per cent) of the UK’s blue-chip employers undertake both short and long-term succession planning. But in financial services, it’s about two thirds (63 per cent). And while more than a fifth (22 per cent) of UK wide firms are concentrating solely on short-term succession planning – in financial services, it’s just an eighth (13 per cent).
Tara Ricks said: “You can raise the bar on your succession planning or watch your top talent – and a host of competitive benefits – fly out the door. The people in financial services who have made that choice aren’t just going through the motions – those who have committed to succession planning are doing it very, very well. Effective succession planning can’t be done in a vacuum and needs to be an integrated component of a company’s approach to talent management.”
Additionally, of those organisations carrying out succession planning, 43 per cent of financial services employers focus on more than just the top layer of management – drilling down three levels - compared to the UK average of 37 per cent.
Tara Ricks said: “Traditionally, companies felt succession planning should be limited to a handful of senior management positions. But financial services firms are looking at their people strategy at the second and third level down. That’s smart thinking. First, because if fail to plan – you can plan to fail. And second, as recruiters know, a growing number of middle-management positions are becoming as challenging to fill as some of the top spots. From this point of view, financial services are paragons of succession planning virtue.”
Workpocket 2014/15 can be ordered here: www.randstad.co.uk/