In 2017, the Gforce Group (incorporating People@Work) commissioned a research project to understand trends within workplaces in Geelong, with information collected through interviews with human resources representatives from medium to large organisations.
One of the more notable statistics from a business planning perspective in the recently released report on the project was the lack of organisations who have implemented succession strategies. Of the businesses interviewed, only 50% have minor succession strategies, and only 19% have multigenerational management plans.
The report suggests that the challenges of succession planning and managing a multi-generational workforce are not necessarily local trends. However, organisations are really only using “informal strategies in an effort to ensure knowledge doesn’t walk out the door with the baby boomer or the average employee who decides his 4.6 years tenure is up.”
A clear, well-structured succession plan is imperative for future success of a business – by ensuring it has a solid succession plan in place, an organisation can maximise the prospects of long-term financial sustainability and maximise the value of the business.
Additionally, having a succession plan in place can protect a business in the event of unforeseen events, such as injuries, illnesses or deaths of key members of staff.
We recommend that a succession plan be appropriately documented, and discussed with the key members of the business, prior to its implementation. A best practice approach covers a range of different areas, such as risk management, key legal aspects, exit strategies and timelines for exits.
Businesses should also revisit succession plans over time to ensure the plans still meet current requirements. Circumstances may change over time that shift the landscape of an organisation, and succession plans should match the current climate of the business.
For advice or further information regarding business succession planning, please contact: