From what I’ve seen in many countries across Asia, internal recruitment can be and in many instance still is, very much based on your favourability in eyes of the right individuals, those who are positioned well, have the right relationships or the right timing, a little like Frank Underwood in the Netflix series House of Cards (picture above).  OK organisations are ‘usually’ not exactly as aggressive as that, but let’s face it career pathways (succession) are as essential to employers are they are to employees.

Over the course of 15 or so client workshops in 2015, I asked over 125 companies, how many had succession plans in place. The answer was just two in total. Most didn’t even consider the merits of having a proactive plan in place or indeed an understanding of the ageing population challenges and other areas that will drive attrition in the coming years leading up to 2020.


Building a strategic workforce for the future

Oxford Economics, in collaboration with SAP, conducted a large-scale study and created a Workforce 2020 report.   The purpose of this study was to discover who identified with having best practices and who was making actual progress towards the creation of talent strategies for the future in the global economy. Their study found that, “Most companies are not cultivating leadership within their organisations. Although executives cite a lack of employee loyalty and longevity as the biggest barrier to meeting strategic workforce goals, nearly two-thirds (63%) do not plan for succession and continuity in key roles.”

“Only 31 percent of executives interviewed say that when a person with key skills leaves they fill the role from within the organization. Surprisingly, less than half indicate that their leadership team has the skills to effectively manage talent or inspire and empower employees”

It seems for the most part that senior executives are more preoccupied with immediate business issues and are not positioning themselves for the long term. Skill requirement gaps for key positions around the world will create challenges for organisations in the near future. You need to have a strategy in place to deal with worst-case scenarios where high performers and employees that you had considered to take over key positions leave unexpectedly. A lack of succession planning can be stressful for the person leaving as well as the person expected to take on the role without prior notice. Organisations that do not have a succession plan are in danger of not having the expertise and framework in place to drive the business forward in the long term.


Challenges associated with the aging workforce

According to the Ernst & Young report “Tracking global trends – how six key developments are shaping the business world”- Between 2010 and 2030 the global working-age population is expected to grow by only 20 percent, or 900 million people. In more developed regions the working- age population is expected to shrink by 5 percent over 2010-2030, mainly owing to declines in the working-age population across US, Europe, China and Japan. While this labour gap, at 200,000, is still relatively manageable, it is expected to grow to 8.3 million by 2030.On a brighter note, as you can see from the graphic below from a recent Mercer presentation, more than 50% of the ASEAN population is under the age of 30 years old meaning there is talent available in certain parts of the world.  There are also many predictions to suggest a significant amount of new talent will start to emerge from Africa in the coming decade.It could be suggested that, in many parts of the globe, the corporate world has not yet woken up to the impact that the ageing population can have on business, in terms of the changes it will bring in the workplace not to mentioned productivity, revenue and cost implications.As the baby boomers retire, and fewer young people take their place, businesses will face the challenge of filling the labour gap due to the steep drop in the size of available workforce. It is very difficult to replace large scale loss of crucial talent which deprives organisations of critical skills and experience. The shortage of manpower and skills could slow down output and hinder the growth of organizations in the future.

“[Emerging multinationals may] suddenly hit the wall because they cannot [develop] talent with the right skills and the right attitudes…. This was not at the top of their priority list as they were growing their business.” –Branka Minic

Advantage of Succession Planning

Succession Planning can ensure you are well prepared for such a situation by identifying and developing talent within your organization and ensuring continuity of leadership. Companies need to have the right talent at both the leadership and individual level. In order to facilitate this, you need to create strategic succession processes that reach throughout the organisation, align with business needs, and drive better business outcomes. This ensures promising talent have the knowledge and experience to step in when required, leaders have the skills to meet productivity pressures, and you have systems in place to meet new challenges in fast changing market conditions. Possibly most importantly of all succession plans, combined with training and development, open and honest feedback and assessment will ensure that your top performers know who they are, understand their career pathway and this is significantly reduce inadvertent attrition.


In order to perform Succession effectively its NOT just about putting a name underneath the incumbent in the role.  To be successful  companies need to:

  • Devote time and energy on identifying and developing a supply of talent to be able to meet future demand.
  • Support individual employee growth and development with training programs. Keep employees up-to-date on the latest technological advancements and innovation in your industry. Educate on new skills that where employees pick them up now could benefit the future needs of your business.
  • Define career paths and create opportunities for employees to take on key positions.
  • Identify individuals who have personal drive, commitment and skills, and get them to participate in leadership development programs.
  • Persuade present leaders to take on the duty of developing successors. Leaders should be trained to effectively manage talent in their team and drive members to take on more responsibility.
  • Encourage and facilitate experienced long-term employees to pass on their interlectual property, skills and technical knowledge critical to the success of the organisation to younger employees.
  • Cultivate employee loyalty with extra benefits and perks such as flexible work hours, appropriate compensation, rewards and recognition, family health plan, etc., in order to retain talented professionals.

Organisations that create an effective succession plan for key positions can tap into talent pipelines when needed, without the risk of losing business objectives when senior managers and highly qualified experts leave unexpectedly.

For more insight download the Workforce 2020 materials HERE or contact me; on LinkedIn, twitter: @brentkielly or brent.kielly@sap.com

Success is #simplyhuman

To report this post you need to login first.

Be the first to leave a comment

You must be Logged on to comment or reply to a post.

Leave a Reply