Nearly One-Third of Companies Don't Have Succession Planning
June 7, 2011 (SmartPros) When a high level leader leaves a company, there's a lot of pressure associated with the selection of his or her successor. Even with so much weight placed on future leaders, many companies reveal they don't have a formal plan of action to replace their higher ups.
According to a new CareerBuilder survey, nearly one-third (31 percent) of companies with more than 1,000 employees said they don’t currently have a succession planning program at their organization. In addition, 50 percent of senior management (CEO, CFO, Senior VP, etc.) and 52 percent of those in a vice president position said they do not have a successor for their current role.
A lack of succession planning can adversely affect an organization in a variety of ways, from the absence of strategic direction to decreased productivity to weakened financial performance. More than one-quarter (27 percent) of companies said they’ve been adversely affected financially by poor succession planning or a lack thereof.
Employers cited the recession as an obstacle to effective succession planning. More than one-quarter (28 percent) of companies said that the recession has left gaps in their succession plans due to downsizing or workers leaving voluntarily.
“As the economy gradually improves, it’s important for organizations to proactively plan for the future of their businesses,” said Jamie Womack, vice president of corporate marketing and sales training at CareerBuilder. “Having a blueprint on who will succeed management at all levels is a critical facet to your overall strategy, as it ensures that your organization will be able to tackle future challenges and compete in your industry.”
When asked what is lacking in their current succession planning program, companies said the following:
Managers also reported that workers’ awareness of and input on their own succession planning is important. Forty-nine percent of employers said employees don’t set up career paths with their managers with timelines and milestones.2011 SmartPros Ltd. All rights reserved. Source: CareerBuilder