Succession planning has become increasingly focal for companies within the financial services sector. This has, in part, been due to regulatory bodies pressuring Boards to optimise their talent management strategies.
Discussions with our panel of HR leaders uncovered key insights into how financial services organisations deal with succession planning, from the initial stages to unexpected departures and the management of internal and external talent, highlighting the significance of a robust succession plan.
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Next in Line: Achieving Excellence in Financial Services Succession Planning
Read the full paper hereThe necessity of succession planning
- Regulations require financial services firms to conduct succession planning for Board, senior management and other key roles.
- Financial companies may have active succession plans for over 300 roles, depending on the organisation.
- The time commitment for succession planning will be determined by the company’s size and structure.
- HR leaders anticipate an evolution in succession planning in the near future.
Skills, behaviours and specialisms
- Developing talent internally is a major part of succession planning for financial services organisations, with most providing leadership development initiatives.
- A greater emphasis is being placed on skills and behaviours during planning.
- Post-succession development can be put in place to support a successor and to assist integration into the role.
- A management plan alongside a technical specialism succession plan is being more commonly adopted as a strategic planning approach.
External talent
- External searches are carried out alongside internal talent development strategies.
- Traditional financial organisations are experiencing a talent drain to the broader industry.
- External talent can bring a wider skillset to Boards including new technology and data expertise.
Measuring success
- Measures for succession planning differs between organisations but is often down to retention as the indicator.
- Duration of appointment, the number of available internal candidates and pipeline progress are also used as measures of success.
- There can be more attention paid to the succession plan itself, rather than the results.
Managing the unexpected
- The main obstacles faced by HR leaders are integrating the new successor, retaining unsuccessful candidates and managing unexpected departures.
- Having a leader exit the business unexpectedly can create a rift within any organisations, especially in the financial services market where critical roles are required by regulation.
- A considered succession plan can be the best strategy when managing unexpected departures.
- An interim executive appointment would be necessary depending on the size of the firm.
- As part of succession planning, many organisations have an emergency list of candidates.
To discover how effective succession planning can benefit your organisation, view the full whitepaper here.
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