[WRE | ADVISOR]
Succession Planning Addresses TALENT GAPS IN SMALL BUSINESSES
BY: MICHELE MARKEY
65th birthdays, and this trend will continue for the next 11 years. As this generation pursues a path of retirement, the impact they’ve made during their five decades in the workforce is apparent in nearly every industry. Baby Boomers often set the vision, culture, and reputation at their organizations, and younger leaders moving into their roles are challenged with maintaining the quality of the brand, products, and services.
M Today, more than half of small businesses in the
United States are owned by people over the age of 50, according to Michelle Beck-Howard, HR advisor and client advocate for G&A Partners. Many owners are challenged with positioning their businesses to survive long past their retirement. However, a 2018 Wilmington Trust survey found that 58 percent of small business owners have no succession plan, citing they were too involved in managing their company to think about a future transition, too busy to plan, or succession was too far in the future to establish a plan. Te case is very familiar with family-owned businesses. Nearly 44 percent of family business leaders who participated in PwC’s U.S. Family Business Survey in 2016 said succession planning will be a challenge over the next five years, and only 23 percent have a robust, documented succession plan in place. For many family business leaders (46%), the reason they do not have a plan is they are reluctant to pass the baton to the next generation. However, the Family Firm Institute reports only about 30 percent of family-owned businesses survive into the second generation, 12% are still viable into the third generation, and only about 3% of all family businesses operate into the fourth generation or beyond. “Te single biggest mistake organizations make when it comes to managing leadership transitions is
waiting until someone is ready to leave to think about who will replace them,” Beck-Howard said. “While not all transitions come with the luxury of time, finding the business’ future leader is not something any organization wants to have to do on short notice.”
WHY YOU NEED A PLAN
Succession planning is a long-term strategy that focuses on identifying the knowledge, skills, and abilities needed to perform certain functions within the organization. Te plan prepares individuals to perform these functions, which ensures the continued performance of an organization (or division, department, or work group) by developing, replacing, and strategically putting key people in place over time.
For a succession plan to be successful, organizations must consider:
• Identifying skills gaps and training needs • Retaining institutional knowledge
• Boosting morale and retention by investing in employees
• Replacing unique or highly specialized competencies Succession planning develops the internal bench
strength of an organization, and it is usually part of a larger talent management program that attracts people
ichele Markey is the vice president of training operations for SkillPath, a professional learning and development provider in Mission, Kansas. Each day, 10,000 Baby Boomers will celebrate their
WIRE ROPE EXCHANGE
JANUARY–FEBRUARY 2019
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