Infographics<< Back to Infographics on Human Capital Management Topics
Share this Image On Your Site
Regrettably, only a quarter of companies have understudies in the wings ready to fill in for C-level executives when they retire or otherwise leave the organization. And in dire situations involving an immediate need to fill the post due to the CEO’s death or incapacitation, only 8 percent of companies have created an internal succession plan.
Since two out of every five new CEOs are replaced within their first year and one-half on the job, this level of unpreparedness makes no sense, forcing companies to fill the post from outside the organization. Studies indicate that when this occurs, it often results in declining shareholder returns. That’s because insider CEO candidates are more knowledgeable about the company’s goals, opportunities and challenges.
A change at the top also can produce workforce confusion and chaos, leading to an exodus of other top talent. When undue time is absorbed finding a successor, employees become increasingly disengaged in their work, with disastrous financial consequences. Conversely, engaged employees are more productive, resulting in much higher earnings per share for their employers.
This heedlessness of the need for succession planning is not limited to top executives. It extends through management ranks, despite clear knowledge the workforce is aging. By 2018, nearly all Baby Boomers will be 55 and older. Obviously, this is no way to prepare an organization for business growth.
The solution is information—knowledge on the potential loss of key employees. Ultimate Software has three predictive analytics tools that can assist this aim— UltiPro High Performer Predictor™, UltiPro Retention Predictor™ and My Leadership Actions™. The tools indicate which employees are most likely to become high-performing individuals, their risk of leaving the organization and ways to thwart their possible defection, respectively. Armed with this knowledge, companies will have high performing talent ready in the wings when and if they are needed.