Baby Boomer retirement and recent layoffs challenge IT retention. L ow availability of recent IT graduates is the biggest obstacle to building a stable and reliable IT workforce.
Replacing an employee costs 50-200% of that person’s annual salary. Succession development cuts these costs to less than 5-10% of salary if the right strategy, policy and culture are in place.
Begin your succession development rollout with staff contingency planning for critical roles, and then expand to include long-term career development.
Have HR own the succession development process to gain buy-in and standardization.
Address vulnerabilities throughout the ranks. Losing a manager brings longer-term pain, but it’s the loss of technical people that can create a near-term crisis.
Pinpoint candidates that have the flexibility, diversity and interest in being successors. Use a Performance vs. Potential Matrix to visualize potential for promotion.
Collaborate with candidates to map tailored career development plans. Different “manager versus tech guru” career paths exist across IT, so don’t limit options.
Offer diverse training mechanisms, including preparation for the political elements of future roles. Hold staff and supervisors accountable for hitting development goals.
Development does not stop once the promotion happens . Set success measurement metrics, provide end-to-end transition support, and fix performance problems.
Info-Tech Research Group
Baby Boomer retirement, low enrollment in IT programs and recent layoffs increase risks to IT recruitment and retention.
The unexpected departure of a critical staff member can constitute a crisis, but IT staffing stability faces bigger challenges:
The pending Baby Boomer exodus will leave leadership and expertise gaps in the IT ranks.
The share of people aged 25-40 in the US workforce will drop 7% per year through 2020, creating huge vacancies (“Do You Know Where Your Talent Is?” Deloitte).
Enrollment in computer science programs has dropped steadily since the turn of the millennium as IT is seen increasingly as a lifestyle versus a career choice.
Generation Y workers are unlikely to stay at an organization for more than a few years as they pursue more stimulating work and rapid promotion cycles.
Recruitment candidates hesitate to sign on with organizations that have recently gone through layoff action.
0 Info-Tech Research Group Losing an employee is expensive. There’s a three-to six-month – sometimes a year – ramp-up time for the replacement. – IT Consultant “ ”
0 Info-Tech Research Group Availability of Business Skills 32% Business Management Support 34% Economic Conditions 44% Employee Turnover 53% Availability of Recent Graduates from IT Programs 57% Availability of recent IT grads is the biggest current obstacle to building a stable and reliable IT workforce. Getting business management support to develop a team is surprisingly easier than attracting the fresh talent needed to build it. Succession development aids in keeping that hard-won talent instead of going through a difficult and costly external recruitment process. Great Obstacle N=120, Source: Info-Tech Research Group
Replacing an employee costs 50% to 200% of that person’s annual salary. Succession development can cut this to 5-10%.
What are the benefits of succession development?
Avoid costs. Replacing someone, especially with an external candidate, brings costs in the areas of:
Headhunting and recruitment.
Productivity loss. It takes about six months for a typical employee to reach 100% productivity.
Retain skills and knowledge. These are assets with real value that may be impossible to replace.
Prevent backfilling. Stop the unintended ripple effect that’s created down the ranks as employees act as stop-gaps for vacant roles.
Create fluidity. An “irreplaceable person” won’t be promoted, blocking advancement for those below. This forces a costly external search.
Improve engagement and retention. Reduce turnover by engaging and keeping talented people. Offer clear career paths and build a sense of team.
Remove vulnerability. Skill redundancy ensures business continuity if a key staff member leaves.
Info-Tech Research Group Succession planning is a critical aspect of our business. It ensures that we always have the skill set and capacity to perform the functions we need to move forward. – VP of HR, Telecommunications Definition: Succession Development The structured and coordinated practice of identifying and preparing pools of internal talent to fill key positions, with the goal of meeting business objectives. “ “
Talent management software is powerful, but not the most effective tool for many enterprises. Info-Tech Research Group
Full-scale talent management suites offer a wealth of tools, but are unnecessary for most enterprises.
Most suites include the following modules:
Learning and development.
These suites typically start at $20,000 and can quickly climb to $500,000 for large implementations.
On-demand solutions are much more cost-effective entry points into the talent management software space. SuccessFactors , for example, costs $3,000 for set-up and $15-$60 per user per month.
For smaller enterprises, simple Word templates and Excel tools are effective enough for tracking succession development information.
See some of the tools that are available from Info-Tech:
IT Skills Inventory Tool
IT Leadership Skills Inventory
Annual Professional Development Plan
Quarterly Professional Development Progress Report
Learn about the top three mistakes that IT leaders make and how to fix them, in the video, “Succession Development: Get it Right.”
Start with Info-Tech’s “Succession Development Planning Tool” to assess areas for both immediate and long-term action.
This “Succession Development Planning Tool” will help you:
Identify individuals and roles that pose a skills gap threat, and the potential impact if that threat comes to pass through employee departure.
Focus your succession development efforts on the roles and individuals whose departure may present the greatest risk.
Evaluate staff members that have the potential to be strong successors using established criteria.
Focus your career development efforts on those individuals who have the potential to take over high risk roles.
Info-Tech Research Group Formalizing succession efforts creates a safeguard for those under development in the event that the person overseeing their development leaves. A systematic and well-documented developmental track is more likely to be preserved regardless of who is running the show. Info-Tech Insight:
Use a Performance vs. Potential Matrix to quickly plot and visualize an individual’s potential for promotion. Info-Tech Research Group Shaky Solid Strong Shaky Star Poor Strong Solid Solid Performance Potential Low High High
To use the chart on the left, assess an individual employee from “low” to “high” in terms of:
Actual on-the-job performance to-date.
Potential to learn and grow, including their willingness to engage in development activities.
The person’s plotted position on the chart will help you assess the amount of effort and investment it will take to make them succession-ready. The closer to “Star,” the less effort required.
If an individual is not on a development track due to performance issues, then don’t waste anyone’s time. Seriously consider termination. . Info-Tech Insight:
Collaborate with each candidate to figure out how to get from A to B, then map a tailored career development plan to get there.
Treat the training in the Career Development Plan like a contractual commitment.
Conduct a gap assessment that looks at what it will take to get the succession candidate to their target role.
This exercise will pinpoint opportunities and required effort.
Create an individualized Career Development Plan that maps targets, timeframes, obstacles, and actions.
Build in accountabilities. Link achievement of Plan objectives back to the performance evaluations of both the succession candidate and their supervisor.
Focus on obstacles beyond basic skills acquisition that could block the promotion path, such as:
Poor or false perceptions held by others.
Personal circumstances that limit options.
Get HR sign-off on the plan as part of the ongoing buy-in process.
Info-Tech Research Group Succession planning drives the actions in employees’ career development plans. – CIO, Manufacturing “ “
Use Info-Tech’s “Career Development Plan” template to:
Establish career targets.
Identify career-building strengths and obstacles.
List must-do activities for career advancement.
Development does not stop once the promotion happens. Provide end-to-end transition support and fix performance problems.
Succession development is an ongoing process:
The nuances of a given role won’t be fully understood by the candidate until he or she has actually experienced the role first hand.
If you wait until someone is 100% ready to be promoted, then they’ll never get the hands-on experience they need.
Start preparing to promote a person when they reach the “80% ready” mark.
An employee in a new role might struggle. Either they were promoted too soon, suffered from poor transition support, or are in the wrong role entirely.
Stipulate a three-month probation period to support the transition and assess on-the-job performance.
If the candidate is clearly out of their depth, give them a graceful way out.
If at all possible, let the employee return to their previous position. They clearly excelled in their former role, so they still have value to deliver.
Info-Tech Research Group Too often I’ve seen individuals move in or out, and it’s a cold hand-off. They don’t have an understanding of the team environment, expectations or politics. – CIO, Telecommunications “ “
Info-Tech’s “Role Transition Plan” template lays out the activities that must occur in order for an employee to successfully move out of an old role and into a new one, including:
Immediate new accountabilities and expectations.
Current role handoff tasks.
New role orientation.
Survey Demographics (e) Info-Tech Research Group