Rising retirements mean succession plans aren't just for the C-suite
- The majority of employers in a new Challenger, Gray and Christmas survey (64%) said that they are currently hiring, but the firm said talent shortages mean these employers could be forced to shelve expansion plans or close down entirely.
- Survey results showed that a quarter of respondents are focused on retention, but firm vice president Andrew Challenger said in a statement many longtime workers are retiring, much to employers' dismay because there aren't enough candidates to replace them. Employers can address the succession planning dilemma by partnering with universities or creating training programs to develop the next generation of replacements, Challenger said.
- To maintain continuity when talent leaves or retires, employers need to consider extending succession plans to all positions, not just those in the C-suite, said Challenger. Employers are also turning to benefits offerings, according to the survey, with the most common options being 401(k) plans (91%), competitive wages (88%), healthcare (83%), professional development (76%) and tuition reimbursement (71%).
Filling positions and avoiding "brain drain" are separate yet related challenges for HR. Employers risk not only losing mentors and key workplace leaders, but also the knowledge that leaves with those workers. Offering would-be retirees a phased retirement option or part-time schedule might allow them time to prepare for their next stage, while sharing their wisdom with others. As the struggle to fill positions heats up in the tight labor market, investing in the training of current workers might also be necessary, Challenger said.
Succession planning is a critical part of doing business that companies shouldn't avoid. Pre-selecting people to "wait in the wings" in case, or until, someone leaves or retires might seem premature, but it's a necessary tactic in the case of an immediate or unexpected departure. Top companies have increasingly faced this challenge in recent months due to the sudden departure of top executives, but all levels of the organization can be disrupted.
Extending succession planning to all positions in an organization may make sense since workers at every level have valuable knowledge and expertise that can be passed along. Also, many are constantly looking for new opportunities, including those who are satisfied with their current jobs, research suggests.
A tight labor market is a job seeker's market. Therefore, employers will need to offer great benefits, training and development opportunities, digital tools and other advantages to attract and retain talent, along with their knowledge and expertise.
- Challenger, Gray and Christmas Hiring Survey: Lack of Workers May Mean Companies Need Succession Planning for All Levels
- The Wall Street Journal As Bosses Leave, Boards Need to Make Succession Plans