HR News & Trends

Weekly Wrap: Poll Shows Succession Planning as Really Bad, Getting Worse

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If you are a regular reader of TLNT, you probably know that I regularly rant about the terrible state of succession planning in the American workplace.

As I wrote back in February when pointing out how well that The Men’s Wearhouse seems to be doing it, “Succession planning is one of those activities that lots of organizations talk about but few seem to do very well.”

Nothing has changed my mind about that assessment, and if anything, recent survey data shows that the state of succession planning is probably a lot worse than even I suspected.

Only 23% have formal succession plans

For example, a poll released this week from the Society for Human Resource Management shows that the number of U.S. organizations with a formal succession plan in place has actually decreased in the past five years, dropping from 29 percent in 2006 to only 23 percent today.

“The number one 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, in a press release about the study.

I certainly understand how the uncertain and balky economy might get in the way of smart succession planning, but the terrible numbers that this SHRM poll highlight show that you can’t really blame the lack of succession planning on the recession because the numbers were pretty terrible back in 2006 – long before the Great Recession kicked in and got blamed for every business shortcoming known to man.

The SHRM survey (and you may not be able to get to it if you are not a SHRM member) also draws a distinction between formal and informal succession planning. It says that “the numbers improve when informal plans are considered” with more than one-third (38 percent) of HR professionals saying that their “organization currently has an informal succession plan or process in place (up from 29 percent in 2006).”

I’m not sure what the distinction is between formal and informal succession planning – I scanned the SHRM survey data available online and couldn’t find a definition – but I’m not sure how valuable an “informal” succession plan actually is if “informal” means non-binding or lacking specific performance criteria.

Maybe HR should run succession planning?

To me, succession plans only matter if they have some follow through – like NBC showed with their recent promotion of Ann Curry into the co-host spot at The Today Show. Now THAT’s a succession plan that seems to work.

There was one point that SHRM made that really resonated with me: the need for HR to be at the middle of the succession planning process.

“This is an area that HR should lead in organizations,” said SHRM’s Esen. “Currently only 40 percent of HR departments lead succession planning efforts,” she noted. “Maybe planning would increase if HR ran the programs.”

Good point. I’m betting that yes, succession planning WOULD increase if HR ran the program, but then, you don’t need to be Jack Welch or Warren Buffet to figure that out.

Freelancing booms, and exit interview with Ronald McDonald

Of course, there’s more in the news this week than the sad state of succession planning. Here are some other HR and workplace-related items you may have missed. This is TLNT’s weekly round-up of news, trends, and insights from the world of HR and talent management. Yes, I do it so you don’t have to.

  • Freelancing booms as full-time jobs wane. This shouldn’t be a big surprise to anyone, but freelance work is growing and growing rapidly. According to this week’s Christian Science Monitor, “As America’s jobs recovery begins to take hold, one sector is growing faster than ever: freelancing. There’s reason to celebrate. Many Americans are bypassing the corporate ladder to strike out on their own – doing everything from graphic design to iPhone programming. But there’s also reason to worry. Others are becoming entrepreneurs by necessity, forced to take freelance jobs because they cannot find regular jobs. Desperation, rather than inspiration, seems to be the major force behind the trend. And the surge isn’t over.”
  • 401 (k)s make a comeback. Remember how so many companies cut or suspended their contributions or matching funds for employee 401 (k) plans during the recession? Well, those contributions seem to finally be coming back. “Many U.S. companies that during the recession cut 401(k) matching contributions — one of the most valuable employee benefits — are beginning to restore them,” The Wall Street Journal reports. “But a number of firms are contributing less than before, are linking contributions to profits or are making workers save more on their own before kicking in, say benefits consultants.”
  • Taking the non-union route at Wal-Mart. There’s been a lot of coverage of the big union push at Target (as Lance Haun pointed out this week), and Wal-Mart has been dealing with the issue for many years. That’s why this New York Times story is surprising, because it shows how a group of non-union Wal-Mart workers have taken a different approach. “After numerous failed attempts to unionize Wal-Mart stores, the nation’s main union for retail workers has decided to try a different approach: it has helped create a new, nonunion group of Wal-Mart employees that intends to press for better pay, benefits and most of all, more respect at work.”
  • Exit interview with Ronald McDonald. There’s been a big push in recent weeks to get McDonald’s to dump long-time icon and spokesperson Ronald McDonald. The fast food giant says they won’t do that, but still it makes you wonder: what if they did? What would an exit interview wit Ronald be like? The New York Times tries to find out how HR might handle such an interview — and what Ronald would say to human resources on his way out the door.
John Hollon is Vice President for Editorial of TLNT.com, and the former Editor of Workforce Management magazine and workforce.com. An award-winning journalist, John has written extensively about HR, talent management, leadership, and smart business practices. Contact him at john@tlnt.com, and follow him on Twitter at http://twitter.com/johnhollon.
  • http://www.viapeople.com Karen Caruso, viaPeople, Inc.

    John – I agree with your thoughts on the results of the SHRM survey.  Lots of talk about succession planning and not enough action!
    Many have written about how HR should not lead succession planning efforts.  When HR leaders have the appropriate knowledge and expertise, they can help executive teams create the process and provide the necessary support to execute.

  • Dustin Leszcynski

    This succession planning topic has to make organizations such as Deloitte and Accenture very happy as they continue their focus on developing “just-in-time” leaders for hire. Not shocked at all by the data though. Succession planning is obviously a long-term plan that doesn’t directly impact the current or next quarter earnings report. Instead, by not paying attention to this critical area, the problem snowballs and meeting those quarterly projections down the road only gets harder. Corporations are running out of short-cuts! Time to reinvest in talent and re-examine and innovate the processes.