Why succession planning is difficult – and how to get it right

By Penny de Valk, Associate Director, Equiteq

One thing you need to assure future owners of when preparing for an exit is leadership capability and stability, as well as the continued positive effect of this on profitability and growth. Ownership succession generally involves management succession and because buyers buy people and great leadership, it is natural for them to want to assess the quality of bench strength, as well as the planning that has gone into ensuring the right people are in the right roles. Your management succession plans throughout the company are an aspect of good governance that you can expect to have evaluated in due diligence. And CEO succession in particular will be critical. It is a key responsibility of the Board and is central to good governance.

Why the lack of planning?

So why do so many companies not prepare well on this front? Often succession planning is mistakenly just not seen as a priority against the immediate operational requirements of getting the company to grow and become profitable.

Sometimes this lack of focus relates to the size of the business. Even in some mid-size organizations, without a big HR function, there are few resources to manage succession compared to the formal talent programs enjoyed by larger organizations. Yet being a smaller organization makes it even more important, as not only is the company very exposed to key talent leaving, but those firms can also have a shallow pool of talent to draw from and are unlikely to have the rotational assignment opportunities that allow people to build their skills and experience.

Sometimes firms feel that planning around succession can be distracting for the individuals and the company and create a political tone in senior management that isn’t helpful.

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Building talent for growth through flexible working – Part two

Flexible working crop

In a previous blog from flexible recruitment specialists Capability Jane, they examined how the world of work is changing. This week they’re looking at five ways in which flexible working can benefit smaller to mid-sized consultancies.

1. The labor market demographic is changing

As the labor market demographic changes so too do the needs and desires of the workforce. For non-millennials (those born before 1980), control over work, development opportunities and pay are the key drivers for work satisfaction. Millennials on the other hand (born after 1980) have different requirements. As they invariably work with less job security, retire later and do so with or without a pension, their attitudes to work have changed significantly.

PwC’s recent global generational study found that millennial employees are unconvinced that excessive work demands are worth the sacrifices to their personal life. Millennials value work/life balance and they place a high priority on workplace culture. The bigger consultancies now make sure that flexible working is a key part of their attraction and retention strategies. In fact, most millennials are not looking to work flexibly when they join a new consultancy, they just want the option to be available later on in their career. Flexibility in where they work and how much they work is a key driver in maintaining millennial satisfaction and it does not just need to be the preserve of big, global companies. We are increasingly seeing smaller and mid-sized consultancies embracing flexible working to the benefit of both staff and clients.

2. Greater retention of staff

An employee survey carried out for CIPD by Kingston University and Ipsos MORI found that workers on flexible contracts tend to be more emotionally engaged, more satisfied with their work, more likely to speak positively about their organization and less likely to quit. A happy workforce is key to retaining staff and offering flexible working helps employees to strike a comfortable work-life balance whilst ensuring that out of work factors, such as children or caring for family members, don’t interfere with work commitments.

3. Increased productivity

Many studies have shown a causal link between productivity and flexible working. Being able to manage one’s own time and work when inspired or unencumbered with other tasks can greatly improve efficiency and the quality of work. Smaller consultancies often pride themselves on their agility and not being as heavily encumbered by processes as huge organisations and flexible working can be another string in the bow of their offering.

Clients are also aware of these benefits. An MCA survey found that a third of clients involved in purchasing management consultancy services said that knowing a consultancy had a flexible working policy for their staff made them more likely to purchase from that consultancy.

4. Meeting customers’ needs when operating in a global or 24/7 marketplace

In the global business place the market never stops. Somewhere in the world there is always someone looking to do business. Can you afford to miss out on any business opportunities due to the 9-5 working day? Consultancies have to be particularly flexible and ready to meet client needs at any time of the day. Offering flexible working can help your workforce to meet your customers’ needs 24 hours a day, seven days a week. The rise of job sharing has come about, in part, to deal with the needs of clients in the global marketplace. By putting the right structure in place, documenting everything and communicating clearly, two people can easily share a customer-facing job. This ensures an employee is always contactable and ready to help.

5. Savings on overheads

Offering flexible working in the form of homeworking can make a real impact on the bottom line of smaller to mid-sized consultancies by reducing the amount spent on renting office space and energy costs. Whilst there may be an initial start-up cost to setting up working from home solutions, over a short space of time the benefits will far outweigh the initial outlay. Imagine the savings if the majority of your workforce could work from home. Even larger consultancies often only provide desk space for 80% of their employees and set up hot desks to ensure that desk space is not wasted. That could mean the difference between a good business and a great business.

These five areas are just the tip of the iceberg when it comes to the benefits that consultancies of any size can enjoy from offering flexible working options. As technological advancements continue to make flexible working an ever more attractive option and the demand from workers increases, flexible working is fast becoming the norm for consultancies. This trend is set to continue and there has never been a better time to consider flexible working options.

Capability Jane helps innovative and flexible organizations source talented executives on a flexible, part-time or job share basis and access a more diverse pool of candidates. 

Building talent for growth through flexible working – Part one

This week we have a guest blog from flexible recruitment specialists Capability Jane. Today they’re looking at how the world of work is changing and how the various generations now in the workplace have different expectations of their employers. Next week they’ll be writing about the benefits flexible working can bring.

Business consultancies need to be particularly responsive to what their workforce and potential workforce finds attractive as, unlike many other businesses, their product is their people. Recruiting and retaining the right people can make all the difference to a consultancy’s growth. Attrition is an expensive and time consuming factor to deal with, so it’s worth investing time in developing an attractive job offer, which is not just about remuneration.

Government research into the obstacles to success for SMEs found that internal capacity and capability was a major factor holding firms back. Twenty-eight per cent reported that a shortage of skills was an obstacle to their business success. For larger businesses, one in five said that finding staff was their biggest barrier to growth. Businesses ignore these issues at their peril.

The world of work is changing. By 2020, most baby boomers will have retired, while Generation Y will dominate employment, comprising 42% of the workforce. For many of these tech savvy workers, currently aged between 18 and 32, part time, flexible and freelance working patterns are the norm. If employers want to retain their skills, they need to open their eyes to a move away from traditional full time employment. Smart consultancies will already be looking to respond to the needs of these workers.

Part time and flexible working has often been pigeonholed as a female issue, specifically centred around working mums. Indeed, there is considerable demand for flexible and part time options amongst this group. Perhaps surprisingly, however, there is a considerable demand from men too.

Talent article Capability Jane

The leaking pipeline of talent is costing employers dearly – on average 150% of the employee’s annual salary, going up to 200% for a senior role. Our research has found that for an employer with around 3,500 head office staff, the cost to replace lost senior level talent, due to lack of part time working options, equates to over $9m per annum.

Fear of losing the skills your company already has is not the only reason to look beyond the traditional full time, permanent 9-5 contract option. A unique challenge for the future workplace in the next 10 to 15 years is the presence of four generations of workers. Research has shown that the ability to work flexibly and part time is a key requirement for attraction and retention of workers across the generational groups. Those companies that don’t understand the appeal of flexible working may well miss out on the best and brightest staff. And with competition already hot for the best people in the consultancy sector, those not responding to these challenges are missing a trick.

It is clear that the consulting industry is starting to recognise this. Three of the top ten companies that have been awarded the working families benchmark are large consultancies; namely EY, Deloitte and KMPG. Smaller consultancies should look to these firms as an example as they have integrated flexible working successfully. In fact, it can be easier for small consultancies to offer flexible working as they are less constrained by formal procedures. Larger consultancies that have these polices in place may find it harder to embed them in their culture as they will have to convince more line managers about the value of flexible working.

The age of connectivity is upon us and the world of work is changing faster than ever before. In the past workers were shackled to a 9-5 lifestyle in a bricks and mortar office through necessity rather than choice. Now technology is enabling the collaboration and sharing of content with anyone, whenever and wherever it’s needed. Cloud technology and the birth of communication tools such as Google Hangouts, Skype and Facetime mean that employees can be anywhere in the world and still be in ‘the office’. However, flexibility on both sides is key. Working part time is not always easy and consultants that choose this path will often have to do at least 10% more overtime than their peers. To meet the necessary challenges and deliver the service that clients expect, part time consultants often have to leave the office earlier and work in the evenings. For this to work successfully, their colleagues and clients will have to understand and agree to this.

Since the 30th June 2014, every employee in the UK has the right to request flexible working. So with the future already here it’s essential that consultancies don’t miss out on growth due to not having the right people. Offering flexible working options could be one of the best things that your company could do today.

Capability Jane helps innovative and flexible organizations source talented executives on a flexible, part-time or job share basis and access a more diverse pool of candidates. Call 0845 604 1916 for more information.