Have you checked your succession strategy lately?
We live in a world where job hopping is the new norm and millennials are impatient, career-savvy, and don’t expect to stay in a position for more than three years at a time. This has created a highly fluid and fast-moving job market which is forcing organisations to rethink their succession planning.
Whenever an employee is promoted or switches companies, they leave a skills gap behind. A gap which usually needs to be filled within a short space of time. This results in a last-minute, expensive and time-consuming hiring process or, in other employees having to take on the person’s tasks – we’ve all been there and know how frustrating it is. At the same time, there is a demographic change going on, with an ageing workforce and the glaring challenge of finding young talent to take on new roles.
Succession management comes at a cost
Many have tried to put the cost of losing and replacing a good employee into figures. Estimates range from 1.5x to 3x the salary of an employee if we take consider the cost of hiring, on-boarding and training new talent, as well as loss of productivity and potential errors while the new hire is still learning. On top of that, we’re dealing with non-tangible costs, such as low employee morale as a result of a colleague leaving.
Despite the many job hoppers sprinting around the recruitment market, companies often report difficulties in finding the right people with the matching skills. According to CareerBuilder, you can expect to lose almost £10,000 (€13,900 EUR) for every position that is vacant for over three months.
- Step 1 – Audit your talent pool regularly: How can we ensure sure we’re not left with a glaring and costly gap when one of our best employees suddenly announces they are leaving? Many organisations are turning towards their internal talent pool and trying to fill these gaps from within – a strategy which serves as an invaluable insurance policy for talent.
We can start off by planning ahead and not assuming everyone will be sticking around forever. If A goes, who else could do their job at short-term notice? Is B ready for this or are there still some skills missing? Regular skills audits help to prevent a crisis situation when somebody leaves. Technology nowadays enables us to carry out large-scale and standardised audits so that we’re fully aware of what talents we have and what we’re lacking. In fact, many talent management system providers have already embedded succession management into their solution – this is something that almost 60 per cent of HR and L&D managers require nowadays.
- Step 2 – Build a culture of mobility and knowledge sharing: Fostering a culture of mobility, where employees are willing and able to move to a different department or country, will put us in a far better position for dealing with sudden skill shortages. We can work on this by training our employees in intercultural awareness, foreign language and communication skills. Moreover, regular job rotations will allow employees to acquire skills they wouldn’t normally have access to. For example, a product manager could spend a month in the company’s marketing division to get some valuable insights and also to strengthen ties between the two departments. This will result in a much richer internal talent pool and boost employee motivation, since ongoing learning and development will become a fundamental part of their daily work. Another facet of mobility is allowing employees to collaborate across borders in virtual workspaces, where knowledge and ideas are shared via virtual conferences, wikis and chats. Knowledge needs to become fluid and transferable and this can only work if the right communication skills are in place.
- Step 3 – Remember that one size doesn’t fit all: Despite the many opportunities technology now offers us for identifying skill gaps, if you’re dealing with subsidiaries all over the world, chances are you’ll need to adapt your strategy to local customs and expectations. Succession planning in North America will be different from succession planning in China. So somebody moving from New York to Beijing will not necessarily go through a smooth transition. For opposite sides of the world to work together effectively, we cannot rely on technology alone. Instead, we must embrace cultural differences as part of the organisation and be prepared to provide ‘human’ support such as intercultural integration, language training and local guidance. Only then will our talent and skill pool be truly fluid.
The bottom line? Keep your talent happy for as long as you can but don’t assume they won’t need a successor at some point.
Armin Hopp is the Founder and President of Speexx.
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