The Harsh Reality of How Much NO Succession Plan Is Costing You
Competitive, challenging and constantly changing – that is today’s marketplace. As a leader, there is so little you can control, so many shifts happening that can negatively impact your ability to be successful.
In a landscape like this, the leaders that succeed are the ones who are clear on what they can control, those who have razor like focus on their priorities, and those that understand that their best path to growth and profitability lies in the talent they attract, retain, and develop.
The Society of Human Resources (SHRM) reports that the average cost of a new hire is about $4000, and it can take anywhere from 45 to 70 days to fill a position. In addition, it can take up to 45 to 60 days for a new hire to get up and running, and another year for them to be fully productive. The cost of that to the bottom line of your company can be devastating.
Open positions, turnover and lack of talent are a constant drain on the bottom line, a loss in productivity, and can be a serious drain on the employees who are having to carry the load. Causing more employees to leave, more open positions and a cycle that just repeats itself. As leaders, you all know that talent is a critical piece of your success, yet most of you are still struggling to solve this challenge. Let us look at the statistics
5 Shocking Succession Planning Statistics
- CEO turnover is now the highest it has been in 20 years with the average tenure of a CEO being less than five years.
- Companies spend more than $370 billion on leadership development programs, yet five out of 6 HR Managers are dissatisfied with their results.
- Only 35% of organizations have a formalized succession planning process for critical roles
- More than 74% of leaders report they are unprepared and lack the training for the challenges they face in their roles
- Sixty percent of executives fail within the first 18-months of being promoted or hired
Tough statistics, and a harsh reality you all need to face as leaders. While those statistics sound depressing, they are also scream of opportunity. Because the leader, the business owner and the CEO who can turn things around, is going to the one who can win in today’s marketplace and gain serious competitive advantage.
Let us look at the 5 Strategies Every CEO Needs to Implement to Win the War on Talent
- Commit – first you need to commit. As the leader, this needs to be your job and your responsibility. Not something that you outsource to anyone else, and something you focus on every single day. Ask yourself what are you doing daily to help your organization retain talent, what are you doing to find future talent, and what are you doing to develop those next level leaders long before you need them?
- Build A Plan – next get a plan and build a strategy. Take a long hard look at the critical roles you have, the talent you have on board, and the talent you are going to need. Do a gap analysis on your leadership depth, and then build the actions and steps you and the entire team need to take to close the gap.
- Start Small – start small, and do not try to tackle all your leadership challenges at once. Select a few positions in your company and create leadership succession for those roles. This is a lengthy process, and to keep it going you are going to need to role model the process and set yourself up for some easy wins.
- Create the Culture – as a leader, simply by focusing on building talent, and you making it a priority, you set the tone that that is what is valued in your organization. Once you have your strategy in place, encourage everyone in your organization to develop talent and to develop their successor. Create the culture by making it a criterion of advancement. That in order to move up in the company, you need to have selected, trained, and developed the leader who is ready to step into your position.
- Reward & recognize – what you as the leader focus’ on expands. The more you focus your time and energy on leadership development the more leaders you will gain. Reward and recognize the behaviors in your company that support your leadership development objectives.
Winning the war on talent is not easy, but it is doable. As leader you need to focus your time and energy on this critical issue for your company. Follow these strategies, and you will build a culture that values your talent, you will see your employees engage in the process, and you will build your leadership bench and stop the turnover and loss of productivity that goes with it!
Ready to learn more about how to attract, retain and fully develop talent in today’s challenging marketplace. Check out our award-winning book on succession planning. https://whocomesnext.com/