One of the truest truisms about making mistakes is, “People don’t plan to fail. They fail to plan.” Of course, there are levels to failure. You can fail small, and not much goes wrong. But if you fail on the big things, you put the stability of your organization in jeopardy.
That’s why I’m surprised by the results of a global study about leadership development that Korn Ferry commissioned last year. The study found that 86% of the more than 7,500 executives who participated said a gap in their leadership pipeline was among their top challenges.
That’s a gigantic chasm, and it represents a huge amount of risk. If your company falls into this category, it’s time to get the support you need to shore up your succession program.
Let’s take a look at some of the trends that are raising the urgency of this problem along with some modern solutions you can use to address them.
Succession planning is a crucial part of talent management. As a sales executive for many years, I knew that the strength of my “bench” was just as critical as the productivity of my star players. No company can execute strategy successfully without the right leaders, and planning for a leadership handoff ensures that there’s no halt in progress when top talent leaves.
Unfortunately, demographics are working against HR executives in developed countries when it comes to finding candidates for future leadership positions, but organizations with modern HR solutions for grooming future leaders will have an advantage. According to a report from Boston Consulting Group, the labor supply growth rate in the US, Canada, Japan, China, and nearly all of Europe will average below 0.8% in the next 15 years while the rest of the world will grow near or faster than two times that average.
In times of scarce labor, there’s an increased need for HR executives to shift focus to talent (innovation, engagement, training, etc.). Companies must clearly identify where their gaps are and strategize a solution now, before they’re faced with open positions and no candidates for leadership.
Modern and comprehensive career succession solutions will give HR and managers a 360-degree view of their workforce. Managers will have the flexibility to leverage data-centric talent profiles and perform talent reviews that will give them deeper insight into who top performers are and how to develop talent to anticipate needs. HR can then work with managers to address succession gaps.
How are you identifying leadership candidates? If you’re like most managers, subjective input drives much of the decision. While I’m a firm believer in trusting your gut, how reliable are those feelings in an era where data drives so many other strategic decisions?
Advanced HR teams are using predictive analytics to gain deeper insight into their entire workforce—who is leaving, who has leadership potential, and what skills employees are missing that HR can provide to increase leadership preparation.
For example, Oracle’s predictive science uses employee behavior algorithms driven from data-rich employee profiles as a way to better understand talent risks for the purpose of employee retention. With predictive analytics, managers making talent management decisions have the data they need to choose the best candidates more accurately than when they rely on subjective, limited input.
Only a small percentage of companies are using predictive analytics in HR, but the uptake is rapid. According to a Bersin by Deloitte perspective report on 2016 HR technology predictions, “Companies that are fully able to use HR predictive analytics are still an elite group, but the percentage doubled from 4% last year to 8% this year.... In a sign of what’s come in the field, the number of companies ready, or somewhat ready, for analytics jumped by a third, from 24% to 32%.”
’’Those companies that harness the power of predictive analytics for succession planning will gain benefits, and those that don’t will fall behind."
These days, everyone uses applications on their smartphones, tablets, and laptops to manage their personal commitments, finances, health, and even their relationships. If employees don’t have the same capabilities in their work experiences, they become frustrated and disengaged.
Considering the scope of these challenges, it’s no wonder so many executives admitted their leadership pipelines were skimpy in the Korn Ferry survey. Fortunately, technology is shifting from an HR focus to an employee focus, a trend that ultimately benefits HR because it enables self-directed career planning and learning.
Combining these tools that help employees with predictive analytics, and putting them in the hands of savvy HR leaders, will result in a powerful succession strategy. And the cloud makes it possible for you to have all you need in one platform that’s easy to use, manage, and maintain to make your succession planning simple.
Learn how to retain your top talent with Oracle’s HCM Solution.