Succession planning in smaller businesses
For the majority of us, the onset of the New Year brings about change, whether that is a new home, haircut or job. The biggest challenge for employers is how to continue to motivate and retain key people in the business so that they don’t join a competitor and leave a gap in the company.
Ali Bevan-Howlett, HR consultant in the People Management team at accountancy and investment management group Smith and Williamson observes that most employers act too late in attempting to prevent employees from leaving. She notes: “once the employee has resigned they have already disengaged, and even the promise of extra salary or status will only retain them for a short period of time”. For a small employer, with no succession planning in place, the loss of a key employee can have a detrimental impact on morale, and create a gap socially and professionally for those that they leave behind. Most vitally, their departure will affect the bottom line, especially if they are a key contact for business development or they hold important knowledge.
Ali comments that employers: “need to plan regular strategic talent meetings in order to review the direction of business and link it to key talent”.
Nicola Mayhew, Senior HR Consultant within the People Management team at Smith & Williamson has a set of six tips to help you to review your succession planning at both a strategic and individual level:
Strategic succession planning:
1. Identify your future business needs. For example, if a graphic design company win a new account providing the graphic layout for a new agriculture magazine, they would need to recruit a new team of designers to provide this service, along with a new team leader to support and manage the team. Identifying your future business needs will help you to identify and plan for key roles and competencies.
2. Take time to review your talent at least twice a year. This could be as simple as making a space on your Board or management agenda to identify key employees you see as having potential to progress and agreeing how you can support them to do so. For the best results, your CEO will chair and facilitate this meeting.
3. During these discussions, consider those employees that have the potential to succeed into current key roles in the business. Then plan any relevant development with clear timescales to help them transition into more senior roles. Succession planning will also help you to plan you replacements for your retirees. Since there is no longer a fixed retirement age in most businesses, talking regularly with individuals about their plans for the future will help you spot forthcoming decisions about leaving the business. If helpful, you can use a talent matrix to assist you in recording your talent and to track their progress.
4. It is key to understand that this is about your business’s future potential – you need to remember that your employees won’t necessarily have the right skills now, but they will have after you have agreed and delivered a development plan that increases their skills and confidence. Initially, you will need to determine how suitable they are by assessing their ‘will’ - whether they are demonstrating the high performing behaviours that will take them on this challenging career journey.
5. Review and evaluate the progress of high potential employees on a six monthly basis. Remember that your key roles in the business can take between 3 – 5 years to build the necessary skills and competencies.
6. Consider the following to bridge any gaps in skills: external coaching, internal mentoring, secondment to another team for 6 – 12 months in a similar role which will provide enough ‘stretch’ and help build the new skills required. You may also want to use a variety of project work.
Effective succession planning:
So, how can you apply this on an individual basis? Ali Bevan-Howlett provides some guidance on individual development plans:
1. Use practical tools to help your employees understand their current capability, any gaps to work on, and how you will support them and help facilitate their growth.
2. Help your employee to understand where their strengths are and plan how they will bridge development areas. The SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) is a useful and straightforward tool. Use the threats box to understand what the employee is able to do in terms of mobility and take into account caring commitments. Link their SWOT with your business plan – if they want to lead a team within 12 months, review their current experience of managing others (current or previous roles) and understand where the growth is likely to happen in your company so that you can match aspiration to opportunity.
Here’s an example of an individual SWOT:
3. Be prepared to share your thinking on talent and development with employees, so that they see that you do have a plan for the whole team / department. Employees will talk amongst themselves, and your role is to link their goals / aspirations back into the business plan and the direction of the business for the next 12 – 18 months. Facilitate a team discussion on how they will collaborate to make their team the highest performing.
Think through any new opportunities - for example, one of our technology clients recently took over a competitor’s staff, creating a new set of team leader opportunities. Consider secondments or role swaps if possible to ensure that new employees get an early understanding of your company values and working methods.
Finally, what happens when key people leave anyway? It’s not always possible to retain key employees; even if you have followed the above advice they may still take the decision to leave. This is not a failure on your part, providing that you have done everything that you can to motivate and facilitate any career opportunities for them in your business. As a manager, handling career coaching conversations and providing the right level of support to your team may be the toughest challenge of your career, and don’t forget that this can be a stretch for your own development! If a key person leaves, your investment in development should pay off in the ability of others to step up, or to hold the fort while you recruit.
Don’t underestimate the power and importance of effective coaching conversations when resource is lean. When done effectively, it’s a free tool that you can use in order to effectively engage and motivate your workforce – which brings better results for your business.
Looking for HR advice and support? The People Management team at Smith and Williamson are able to provide advice and guidance on developing and implementing a succession or talent management programme to suit your business needs. For more information, please contact the team on 0117 376 2076 or Ali Bevan-Howlett, HR Consultant 0117 376 2046.