How many of your executives will leave in the next five years? According to a Canadian survey most companies estimate they’ll lose 20%, but they don’t know who’s going to fill the gap left behind.
As the country's top senior executives prepare for retirement, but Canadian organizations are faced with a significant massive skills gap that has the potential to stifle innovation and productivity, according to the latest Odgers Berndtson Executive Outlook survey.
More than 90% of respondents believe the next generation of managers is not ready to take over at the executive level, despite the fact that half the respondents expect to lose 20% of their execs by 2017. Many (52%) said their organization requires specific expertise that they do not currently have on staff.
"Dynamic leadership at the top is the corner stone of an organization's ability to adapt to the complexities of the global market and ultimately to be its competitive best. However, the looming gap in leadership over the next five years poses significant challenges for organizations, especially for the public sector where the skills gap is more acute," Odgers Berndtson managing partner Kenneth Werker said. "The real concern from a performance and productivity standpoint is that, despite being aware of this inevitability, the majority of organizations are doing little to prepare for it."
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This lack of preparedness, coupled with the fact that a quarter of those surveyed believe that the next generation of leaders may need five or more years of mentoring to prepare to take over an executive role, has left many business leaders grappling with conventional solutions. These include recruiting from overseas and targeting executives at competitive firms. In fact, nearly one in five believe that their next executive hire will come from outside the US or Canada.
"Another more practical solution is to consider hiring an interim executive manager to help bridge the gap and overcome the skills shortage while the next generation gains the experience and skills needed to succeed," Werker added. Seventy-two per cent of those surveyed said that they believed interim leadership would grow significantly over the next five years.
Succession planning basics:
Career path early and often with your staff, making sure you’re identifying talent and matching company and individual goals.
Mentor the next generation. Develop a training program including hands on experience and one-on-one coaching.
Start before it becomes necessary – training someone after they’ve taken on a role means you miss out on months of great leadership.
Adapt and adjust your plan at least once a year. Turnover, life changes and company changes will all need to be considered. Setting a plan and ignoring it for five years won’t help anyone.