OAKLAND, Calif., Nov. 13, 2014 /PRNewswire/ -- Organizations with sophisticated succession management practices – the processes of identifying successor candidates to fill key leadership or other crucial roles in an organization – realize significant employee engagement and retention gains, according to new research from Bersin by Deloitte. Summarized in a complimentary WhatWorks® Market Brief, the research findings appear in Bersin by Deloitte's new study "High-Impact Succession Management: Key Findings and Maturity Model."
The research underscores the importance of effective succession management in a world where more than half (52 percent) of business leaders indicate they do not have confidence in their direct reports' ability to become part of the C-suite, according to Deloitte's recent Business Confidence Report 2014. The new Bersin by Deloitte research shows that while succession management has long been associated with planning for executive-level roles, high-performing organizations are pushing formal talent and succession planning further into the business to touch all roles that are critical to day-to-day operations or that deliver a disproportionate level of value to the company.
"The top two benefits of effective succession management in these high-performing organizations are improvement in employee engagement and improvement in career development opportunities," said Kim Lamoureux, vice president, leadership and succession research, Bersin by Deloitte, Deloitte Consulting LLP. "This is good news, because it means that sophisticated succession management programs address the number two priority – after leadership gaps – previously cited by HR leaders in Deloitte's Global Human Capital Trends 2014 report: retention and engagement. Employees who are provided with performance feedback and are alerted to potential future opportunities within the organization are more likely to be engaged in their work, and therefore more likely to stay with that organization."
Moreover, employees – particularly Millennials – may leave an organization if they do not believe there is an opportunity for growth and advancement. "Informing employees that they are highly valued and that the organization wants to invest in their development provides them with a good reason to stick around," Lamoureux said.
Based on a survey of 260 qualified respondents representing a broad cross-section of organizations of different sizes and based in different countries, the High-Impact Succession Management research yielded additional important insights for business leaders. Among those key findings:
- Broad communication regarding programs is the top performance driver for succession management. Broad communication regarding succession management is five times more influential on the overall success of succession management programs compared to other performance drivers, including the identification of critical positions, governance and the use of technology.
- Identifying critical positions is another key driver of overall succession management. Identifying critical positions is as much as four times more influential at driving high performance outcomes compared to other performance drivers.
- Organizations fall short in their ability to identify talent to fill key positions. The most important activity for succession management is the ability to identify a supply of available talent to fill key positions, as indicated by 72 percent of organizations in the study. Yet only 32 percent of organizations believe that they are ready to employ this capability effectively today.
- Organizations are not prepared to hold leaders accountable for developing successors. Holding leaders accountable for developing successors was identified as the second most important succession management capability and is also the second-highest capability gap among organizations in the study.
- Designing and implementing employee development solutions that are tied to succession gaps is the top capability gap. The ability to implement employee development tied to individual succession gaps emerged as the third most important priority in succession management. However, the research found this capability represents the biggest gap between importance and the readiness of organizations to address this challenge.
Executives and business leaders at organizations that are most effective at succession management take ownership and responsibility for talent, added Lamoureux. "They also communicate to employees regularly about the succession management process, and its importance to their careers and the company," she said.
Register to join Kim Lamoureux for her online webinar, High-Impact Succession Management Revealed: Key Findings and Maturity Model, 2 p.m. EST / 19:00 GMT, Jan. 29, 2015.
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About Bersin by Deloitte
Bersin by Deloitte delivers research-based people strategies designed to help leaders and their organizations in their efforts to deliver exceptional business performance. Our WhatWorks® membership gives Fortune 1000 and Global 2000 HR professionals the information and tools they need to design and implement leading practice solutions, benchmark against others, develop their staff, and select and implement systems. A piece of Bersin by Deloitte research is downloaded on average approximately every minute during the business day. More than 5,000 organizations worldwide use our research and consulting to guide their HR, talent and learning strategies. For more information, please visit http://www.deloitte.com/bersin or http://www.bersin.com.
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