Thought leaders have been calling on companies to take succession planning seriously for years, but it appears not everyone is listening. According to the AICPA’s PCPS survey, only 44 percent of multi-owner accounting firms have a succession plan in place. Nearly half of those firm leaders say they are working on initiatives to hand off work, but their people just aren’t prepared to handle important tasks.
Let’s be clear: this isn’t a failure on the part of their staff but on the part of firm owners that fail to prepare their people for the future. Succession planning is not a fire drill when a partner announces plans to retire, but a deliberate and systematic effort over many years to ensure leadership continuity. If your firm is falling short, here are some tips to get started.
Give opportunities for growth
Talented people want to improve their skills and broaden their knowledge. They perform best when their work environment is conducive to growth.
Support your team’s professional development by giving them opportunities to shadow partners in client meetings. Encourage them to take workshops and attend conferences where they can learn new skills and best practices. Then, allow them to put that knowledge to work by identifying and developing their own initiatives. Every idea won’t pan out, but they’ll reach outside of their comfort zone and learn from their mistakes. These are crucial steps toward personal and professional development.
Make advancement potential clear
You hire talented and educated professionals because you recognize the value they bring to your organization. But some people fail to remember that these professionals are highly marketable. If you don’t offer an opportunity for advancement, they’ll leave to find it with a competitor.
Work on recognizing talent and leadership potential in your team. Then be transparent about your plans for their advancement within your organization. Too often, high potential talent leaves because they aren’t aware that they’re part of a firm’s succession plan.
Pay them right
To a business owner, employee pay is a line item. To your employees, pay is the most important number in their budget. Money may not be the only form of employee motivation, but compensation is one of the top reasons they leave an organization.
If you want to retain your company’s future leaders, maintain a fair compensation strategy. Review market data with Parker + Lynch’s 2019 Accounting & Finance Salary Guide to ensure your salaries, raises and bonuses are competitive.
Encourage them to take the next step
Are members of your team asking to take on more responsibility? Often, ambitious employees seek out opportunities to move up in their careers, but there’s no system in place that allows them to take on more responsibility. Managers are more preoccupied with their own path to the top to focus on encouraging others to take the next step. However, effective leaders know to encourage growth.
Meet regularly with employees to discuss career paths and encourage them to think about how they want their careers to progress. Then brainstorm ways to ensure the employee is making progress on their goals. What resources can you provide to support them? What behaviors and skill sets will they need to get there?
Identify potential leaders early
To ensure your organization has leadership continuity, you need to zero in on individuals with leadership potential. Look beyond performance. While performance is important, you need to focus on aptitude, desire, and potential. Some high performers just aren’t cut out to be leaders. They don’t have the skills or desire to take on leadership roles and are content to be followers.
Instead, look for people who make things happen, aren’t afraid to make decisions, put others first, and hold themselves responsible. Once you’d identified these potential leaders, start prepping them for a leadership role. Make sure they know you see a future for them in your organization or you’ll run the risk of losing them because you didn’t bother letting them in on the secret!
Companies are constantly looking for ways to grow their business, but their biggest asset isn’t strategy or revenue, it’s the people driving that success. The choice and cultivation of your company’s future leaders is vital to the organization’s long-term success. Invest in the development of high potential employees and you’ll have access to a talented and qualified pool of future leaders. This is a far better succession plan than crossing your fingers and hoping someone is ready to take the reins when you’re ready to retire.
Top talent is hard to win and even more difficult to keep, but if you make your company a great place to work and show people where they can go and how to get there, the value and success of those efforts will far outweigh any increases in salary you see. Succession planning is a major part of this, but salary is always king.
To get an in-depth idea of what a successful succession plan looks like, check out our webinar.