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Business News Wales Exclusive: The Importance of Effective Succession Planning

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Most businesses develop a long-term plan to secure the future of its workforce.

Forward planning strategies can differ between companies and often use a succession planning model.  This is the process of recognising potential business leaders within the workforce.

One of main things to consider is investment. It’s not only a financial commitment but also time spent on work-based training and developing the skills and knowledge of key people, that will eventually take-on management and leadership roles.

Matthew Sutton - Greenaway ScottGreenaway Scott

Matthew Sutton | Corporate Director

“Work-based training is undoubtedly one of the best forms of succession planning. In a competitive market, you need to be able to identify the strongest individuals within your business who have the potential to fill leadership positions in the future.

Work-based training allows you to develop the internal workforce through the acquisition of new and improved skills, which can be targeted so that they are directly relevant to your sector specific industry. This can have both short term and long-term benefits for your business. In the short term, training can improve the motivation and productivity in the workplace. In the long run, it allows you to specifically develop and tailor the skillset of your workforce to ensure that employees are prepared for potential future advancement within the business. Effective and proactive training-based succession planning ensures your business is well prepared for all contingencies.”

As with most business plans, there are challenges:

  • Deciding who to promote can be a difficult decision: Some people may be at the top of their game in their position, but they may not necessarily have the desired skill-set to progress a level. There is also the added pressure of rewarding loyalty and hard work.
  • Avoid being biased: Companies must look beyond leaning towards the gender they prefer working with. Care should be taken make sure every candidate has an equal chance
  • Maintaining Company Confidence and Morale: One of the down sides of succession planning can be the effect on company morale. The process should be transparent, supportive and open. Employees should be reassured that the decisions that are made are best for business

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 Alex Parr - WolfestoneWolfestone

Alex Parr | Managing Director

“Succession planning is advantageous for companies of any size. Research shows that, on average, UK workers will change employers every five years. Losing a talented member of staff can have a severely detrimental impact on a company’s success. Planning for this loss is a must.

The benefits of succession planning are two-fold; employees value the time and money spent training them, and employers have a wide pool of talent to choose from when expanding or replacing roles.

Wolfestone relies on many small teams working harmoniously to deliver a quality service. The loss of a key employee from one department has a knock-on effect across all other departments. To minimise this risk and to ensure continuity in the event of an employee’s departure, we commit to spending 2% annual profits on staff training. This encompasses work-based training such as shadowing, role reversal and the sharing of key knowledge and materials”.

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Mark Hindmarsh - Smart Anchor VenturesSmart Anchor Solutions 

Mark Hindmarsh | Director

“Many businesses struggle to fill key positions when senior employees or founders leave, retire or pass-away.  Organisations often feel it necessary to hire in new people to fill the void when in fact they could promote from within assuming they have considered succession planning and have a clear strategy in place to replace key people.

In order to be a meaningful, succession planning should be closely linked to the business’s future objectives. At a top level, this involves:

  • Looking at the organisation’s goals and strategies for the next few years
  • Identifying the job roles that will be critical to achieving those objectives and strategies
  • Establishing what kind of employees, particularly at the senior/managerial level, that the organisation will require to fill those roles and ascertaining whether they are already employees
  • Creating an employee learning and development program which incorporates training, coaching and mentoring under other staff members in order to develop knowledge in different areas of the business

Like any form of planning, the succession type is about creating an adaptable future that the organisation needs and which can be implemented and actioned when required”.

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Wendy Weber - Pembrokeshire CollegePembrokeshire College

Wendy Weber | Head of Workforce Skill 

“We all know the theory about the benefits of training our staff and how the investment in our employees will lead to improved retention and attendance. Sometimes day-to-day business gets in the way and SMEs believe they cannot release staff for anything that is not directly related to improving the bottom line.

Training has a slow-burn effect, i.e. the true benefits may not be realised until weeks or months later, when staff have had the time and opportunity to reflect and are able to apply theory to a real-life work-place situation. Many employers may not be aware that certain changes take place as a direct result of a training session that took place a few weeks earlier. Opportunities for “learning while earning” sound hackneyed or old-school today but it is a fact that if you invest in staff in the work-place and encourage the right people to improve their skills you have a much better chance of finding a successor that understands the business with all its flaws but also all the opportunities linked to where it needs to go. Growing your own successor is a lot less painful than starting from scratch.”

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Graham Morgan

Managing Director | Business Doctors

Succession planning is a critical consideration for every family business or SME and can make the difference between creating a real legacy for the ongoing growth and success of the business or more fundamentally a business that has been set up to fail.

The training approach needs to fit within a strategic plan that sets out what the individual business needs and that cannot be generic! In my opinion a mix of development opportunity is key over a period of time and would include:

  • Work – based training on the duties undertaken.
  • Shadow the Boss days at different levels within the business.
  • Opportunity to attend Senior Management meetings as an observer.
  • Involvement of staff in key projects.
  • Specific external training and development linked to the progression of the Business over the next 5 years.
  • An element of ‘self-development’ would perhaps also be expected to hone knowledge and understanding of current developments within the business world.

Succession needs to transect the business and ‘cover’ needs to always be in place for all roles. A modern business cannot afford to have down time due to certain roles not being covered when staff are away. Sadly something I come across quite regularly.

In 2017 understanding the scope and reach of the Digital economy is absolutely critical within each business if they are going to realise full potential. An area many businesses are missing out on or perhaps not leveraging efficiencies available.

In my view it all hinges around a clear plan over a period of time. There is no quick fix in preparing staff for succession roles of the future.