Half of US CFOs lack a succession plan
- Nearly half of U.S. chief financial officers haven't named a successor to fill their shoes when they leave, a new Robert Half Management Resources survey found. Of all the CFOs surveyed, 52% said they have a successor. Among CFOs of small businesses who participated in the survey, only 37% said they have an heir apparent.
- Robert Half said its results indicate that firms, especially small ones, are unprepared for a leadership change. Respondents who said they didn't have a successor gave several explanations, with most saying it was because they weren't planning to leave the company any time soon (64%). Others said they lacked qualified candidates (17%), were focused on other priorities (14%) or weren't concerned about the transition because they would no longer be with the company (4%).
- The lack of a succession plan may mean a disruption in business operations and productivity, Robert Half said. Such organizations could also experience a loss in institutional knowledge in addition to retention problems, forcing them to put strategic decision-making on hold. Although companies normally appoint an interim leader to take over and conduct an executive search when an unexpected departure occurs, they should anticipate a change for a successful transition, according to Robert Half.
In an environment where top organizations have announced broad executive restructuring for various reasons, and in which high-profile leadership departures have become increasingly common, there may be a growing need for backup plans.
The past year has seen a number of examples of restructuring, sometimes caused by public pressure in the face of controversy, but also due to the need to keep with business changes generally. Starbucks did so in September 2018, when it announced layoffs "as we evolve the direction of teams across the organization in size, scope and goals," according to a letter from CEO Kevin Johnson. Conversations around organizational "agility" — usually but not always referring to a need for workers who drop in and out of different projects regularly — have become popular, and at times controversial, business speak.
At the core of succession planning is career development, one of the top motivators for workers today and a key consideration among candidates when accepting a job offer. Development in its many forms — training, mentoring, sponsoring, job-shadowing and more — is about preparing workers for future opportunities, whether it's learning a new skill, moving into a supervisory role or taking over a C-suite vacancy.
The Robert Half survey focuses on CFOs, but succession planning isn't only for the C-suite. An employee-driven market, the skills shortage and intense competition for talent are pressuring employers to focus on filling spots as others move up or out at all levels within an organization. However, in a LinkedIn survey, nearly half of workers between 35 and 44 said they didn't know what their career paths should look like. And of U.S. employees who do make career moves, only 7% move to roles at their current employer, according to Gallup. Employers may need to invest in creating advancement opportunities if they want to keep employees on board and engaged.