Succession planning: ready to pass it on?

Lifestyles change. People leave. You need to have a plan around rebuilding your practice to avoid being caught out by life’s changes, says Tara Ricks, managing director of Randstad Financial and Professional

It’s a universal truth, widely acknowledged that when you’ve finally built a happy, high-performing, effective finance team, someone leaves. It could be you.

Or, more than likely, it will be one of your more junior members of staff, hungry for that next step-up in pay and title. Either way, whether it’s your accounts assistant or your head of commercial finance, you’ll need to recruit someone new.

But by taking a different tack in your next recruitment process, and concentrating on succession planning from the get go, you could save yourself a headache when the inevitable happens – and someone else leaves.

Interview stage

Every potential hire for a vacant position should be examined against not only their immediate skills match but future potential to fill other specific roles in the team, should they arise within a certain timescale. A year, two years, three years and five years are wise barometers – given the average tenure of most finance directors. So how can this long-term fit be assessed at interview?

Well it’s certainly requires more probing than a simple question of ‘Where do you see yourself in five years’ time?’ More effective questions to ask include:

  • How do you approach change – specifically changes in your responsibilities?
  • Which skills do you currently have that you feel you can develop most effectively over the next year? You have to deputise for the person who normally manages you – how do you plan your day to achieve their goals?
  • Which aspects of your skill set do you have to draw upon more?
  • Give me an example of when you’ve worked on a complex project with more senior stakeholders – what was your most valuable contribution?
  • How would you feel if your career went sideways – and you gathered more complimentary skills – than the traditional upwards path?

These extra questions will give you a feel for portability, potential, flexibility and skills – and by mapping out who could potentially go where and making hiring decisions based on this, you can create a successful yet informal succession plan.

You can even put your plans into practice without anyone necessarily realising - by running a cover system during holidays or a mentoring programme as part of a training and development initiative.

In the same way be savvy about the training courses you send people on or the projects you involve team members with. Always aim for a step above where people are – rather than courses or tasks at exactly their level. Better to be stretched than bored.

Planning as a priority

Succession planning has much to recommend it so it was no surprise when research conducted across Randstad Financial & Professional found that succession planning was now more important to accountancy professionals than it was in 2006.

In a poll of 100 leading human resource (HR) directors, 75% of HR directors working in accountancy firms said it was now more valuable than it had been before the economy crashed. Sixty-seven percent said it was likely to become a higher priority in the future and the poll suggested only 8% of accountancy departments are failing to undertake succession planning of any kind.

Certainly the talent management and retention benefits of succession planning are becoming more pertinent with the growing talent shortage at senior and middle manager level – especially as it’s no longer possible to rely on pay packets and bonuses to retain the best top 15% of your team.

Additionally, of those organisations carrying out succession planning, 50% of accountancy employers are focusing on the top three levels of management and below – compared to the UK average of 37%.

Whilst succession planning is an important tool in your talent armoury, there are also advantages in bringing new talent, with new ideas and approaches, into organisations.

This is a positive step as traditionally succession planning has been limited to a handful of senior positions. By focusing on only the top one or two levels (like the CFO or FD), the process was supposed to remain manageable as only a small percentage of the workforce would be involved in succession planning. But as we all know, a growing number of middle-level positions are becoming as challenging to fill as some of the top spots. 

However, the research also found that whilst almost half (44%) of the UK’s blue-chip employers undertake both short and long-term succession planning, in accountancy, it’s only a third (33%). And while more than a fifth (22%) of UK wide firms are concentrating solely on short-term succession planning – in accountancy, it’s a third (33%).

Clearly there’s room for improvement - with one caveat. Whilst succession planning is an important tool in your talent armoury, there are also advantages in bringing new talent, with new ideas and approaches, into organisations.

Although there is no clear consensus on the ideal proportion of insiders/outsiders, the CIPD suggests a ratio of 80:20.

There are also differences of opinion about the level they should be brought in at: new talent introduced below board level allows an adjustment to the culture and development within the organisation, while the arrival of an outsider at board level brings completely new and fresh thinking, which may be desirable for a failing organisation.

And of course, while succession planning can help retention of staff that are at least aware of the possibility of career progression, the reverse is that talented people not selected for such advancement are likely to consider taking their talents elsewhere.


Tara Ricks is managing director of Randstad Financial and Professional

Tara Ricks |Managing director, Randstad Financial & Professional


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