Succession Planning-Outside/In

Over the last 40 years there have been countless articles written, studies completed and books published on the impact of the demographic phenomenon known as the "baby boom generation". The one true and consistent theme is how the unprecedented size and educational level of this generation has affected American socio-economic conditions.

Now that we face an onslaught of people from this generation beginning to exit the work force, a trend that will continue for the next 15 years, companies are realizing that they will soon face an experience and talent crisis. As professionals and managers begin to leave the workforce, the upcoming "baby bust" generation does not have enough people to offset this loss of human capital.

Our firm is witness to this dramatic demographic shift and experiencing the varied ways that companies have been or are preparing to deal with the loss of a high percentage of the workforce during the upcoming decade. The calls we receive from our client base are increasingly focused on this demographic challenge, with many of them pro-actively seeking assistance in developing what we call an External Bench to deal with succession planning and retiree replacement issues.

As a component of an organization's overall succession planning efforts, using a systematic method of candidate engagement allows companies the opportunity to build a robust External Bench of talent. By taking a holistic "talent management" approach to recruiting efforts companies can build strong long term relationships with these candidates.

External Benching processes include a number of steps that are important to the success of such an effort:

• Planning for the Future

  Involvement of the company's key leaders is needed to develop a thorough understanding of the succession dynamics driving the need for an External Bench. The demographic trends both within a specific organization as well as the industry as a whole; competitive position of the company; anticipated growth and anticipated turnover/future retirements are all components of the data needed to create an appropriate platform for External Benching.

• Position Profiles

  Key leaders are critical in helping define/refine an organization's anticipated target skill sets. Using internal or external resources, a plan is then put in place to source and develop a strong pool of prospects to meet those needs. Through this process it is important to ensure that relevant issues related to professional experience; culture fit; relevancy of industries worked in and geographic preference of prospects are all taken into account.

• Candidate Development

  After review of anticipated future needs has been completed, it becomes necessary for an organization to pro-actively identify and develop relationships with future managers and leaders who are currently employed elsewhere. Once the process of identification occurs, candidates are interviewed, referenced and selected to be on the External Bench. Expectations are set so that candidates recognize that it could be several months, or even years before they are called in to fill a role.

• External Bench Maintenance

  Once an organization knows who will be important to its future, the need to actively maintain these relationships is paramount. Keeping candidates informed as to what is happening in the organization, meeting for the occasional cup of coffee and keeping close track of their current employment status are critical components designed to ensure that candidates are ready to move when the organization calls.

In addition to maintaining and enhancing the relationship with those on the External Bench, keeping the bench "ever green" so as prospects move off the bench new prospects are added is important to the success of the process.

Because competition for managerial and leadership talent is on the rise with no end in sight, it is incumbent on all organizations to work to keep targeted prospects engaged and interested in the organization for months and sometimes years. A case in point of the effective use of External Benching recently occurred with one of our clients. This particular company, a Fortune 100 organization, recognized the "perfect storm" that was brewing when it came to talent acquisition within their industry. Rather than wait for a crisis, they chose to investment spend in what was essentially a "talent pool insurance policy", an External Bench. Having invested several thousand dollars in External Benching over two years ago, they recently hired a Vice President, Technical Services from that bench.

The economy may have its ups and downs. Industries may grow, contract or consolidate. Very little is certain in business. But one thing is certain, the numbers are in and the demographics will not change for decades. The new war for talent is on.