With the economy recovering, the quest for (and to retain) talent is growing more robust. One aspect of this topic is succession planning. We recently reported on a CareerBuilder survey that showed nearly one-third of companies with more than 1,000 employees don’t currently have a succession planning program at their organizations.
And according to a new poll from the Society for Human Resource Management (SHRM), the number of U.S. organizations with a formal succession plan in place decreased during the past five years from 29 percent in 2006 to 23 percent in 2011.
While less than a quarter of businesses have a formal plan in place, the numbers improve when informal plans are considered. More than one-third, or 38 percent, of HR professionals say their organization currently has an informal succession plan or process in place (up from 29 percent in 2006).
The number who say their organization has no intentions to develop a plan remained roughly unchanged from 16 percent in 2006 to 17 percent in 2011.
Sixteen percent say their organization’s staff size is too small to create a formal succession plan.
“The No. 1 reason organizations are not developing formal succession planning is because more immediate projects are taking precedence—not surprising given that organizations are focusing their energies on dealing with an uncertain economic outlook,” said Evren Esen, manager, Survey Research Center at SHRM. “Still, succession planning has significant strategic implications for organizations and should not be put on the back burner, especially during times of economic volatility.”
While roughly 40 percent of HR departments lead the organization’s succession plan initiatives, 21 percent of efforts are lead by the organization’s president or CEO. Thirteen percent of efforts are lead by executives, such as the chief financial officer or the chief operating officer. Only four percent are lead by middle managers and three percent by the board of directors.
“This is an area that HR should lead in organizations,” Esen said. “Maybe planning would increase if HR ran the programs.”
Well, if you don't set time aside to do succession planning, then it doesn't matter who runs it.
How important is succession planning for your company? Is it a priority? If not, why?