Succession planning in tax
What really is succession planning?
Succession planning by definition is “the process of identifying the critical positions within your organization and developing action plans for individuals to assume those positions. Taking a holistic view of current and future goals, this type of preparation ensures that you have the right people in the right jobs today and in the years to come.”
Succession planning should, in essence - happen in every organisation to future proof your teams and ensure success. But, some hiring managers or talent teams are unsure where to start, especially in smaller organisations where outsourcing talent is more popular than in-house activity.
The market has changed rapidly in the last twelve months, particularly in Tax, and we’ve seen a number of clients past and present making more hires with succession planning in mind. This mindset of consciously hiring is a great practice to adopt, and we’re going to break down the benefits, how succession planning can work (regardless of organisation size or resource allocation) as well as how a recruitment partner such as The Consultancy Group can help.
What are the benefits?
Hiring just because someone leaves, or hiring just because someone is overloaded with work is not the best climate to find the right talent. Succession planning enables you to look ahead (and also look at previous hiring and retention patterns) and measure your risk.
For example, if you have an individual who is due to go on maternity leave in 6 months, what parameters have you put in place for a) cover whilst that individual is away and b) a return to work/phase back plan? Something like this can be up to 18 months worth of succession planning - and enables you to retain the individual who is on maternity, look after the health of your organisation, ensure that workload is allocated accordingly and ultimately ensure that the quality is still high during this time.
Another example is if you know that someone is a flight risk for potentially leaving in the next 6 months. You don’t have a crystal ball - and of course there are times when people can leave unexpectedly, but generally, hiring managers and leaders know when someone is unhappy or is showing signs that they want to move on to pastures new.
Availability for management/senior positions are made clear with timescales
You want your progression paths to be defined as a business - not only so you know how people are building their careers with you, but also so you can accurately measure and forecast business performance. Succession planning gives you the opportunity to see what management/senior positions are available and how long it’s going to take to get there. You can speed up or slow down these times depending on what your goals are - but until you see them clearly defined, you may find that employees can enter a state of “limbo” if they don’t know what they need to do to get to the next step.
The cost of a mis-hire can be financially detrimental when managed ineffectively. Knowing your internal and external recruitment spend: job boards, internal recruiters, agencies, or hiring events enable you to be a lot more considered with your budgets. It leaves less room for overspending and instead enables you to have a watertight financial outlook on hiring.
It will also enable you to know how much it’s going to cost to reach your headcount goals that year or quarter - and also what your businesses' performance needs to look like to achieve this. All of your budgeting is connected, so instead of seeing your talent budget as something separate, see it as something that can contribute to the overall financial “health” of the organisation.
Whether you have an internal team or you’re working with an external agency, the ability to talent pool is incredibly powerful. If you know roughly when you’ll need to hire and what the profile will look like, your internal or external recruitment resource can talent pool the right candidates who will be ready and available to interview when you can press the metaphorical “go” button.
Externally, this can be great for your brand reputation as your talent partner can develop strong relationships with high-quality candidates on the basis that they will have an opportunity to join your organisation. Talent pooling is also a great way to simply stay organised with your recruitment efforts and endure you aren’t hiring last-minute or a profile that hasn’t been considered thoroughly enough.
How can you take the right steps to succession plan?
#1 - Look at your current organisational structure
What does each layer of your organisation look like? From your C-Suite, to management, to junior teams. Does each team have enough? Does each team have great performers? What are their strengths and weaknesses?
#2 - Assess internally who is progressing and what roles this frees up within teams
As highlighted by TBS “Determine who is interested in and has the potential to fill key areas and positions.
· Discuss career plans and interests with employees
· Identify the key areas and positions that are vulnerable and the candidates who are ready to advance or whose skills and competencies could be developed within the required time frame
· Ensure that a sufficient number of candidates and members of designated groups are in feeder groups for key areas and positions”
Once you have an understanding of this, you’ll know what your organisational and leadership structure could look like in 6-12 months time.
#3 - Create talent pools and partner with a good external agency
If you have an internal recruitment team with the time do so, now is the time to focus on talent pools. If you don’t, partner with a great external agency who understands your goals, has full scope of your current succession planning efforts and is best equipped to guide you.
#4 - Ensure you consider all role options: Permanent, Contract, Freelance and Interim
Succession planning should never rely on one type of hiring: that specifically being permanent members of staff.
For certain projects and roles, you’re going to struggle to find permanent talent either due to the market climate, the time to hire, or other external factors that will be out of your control. Instead, focus on a holistic approach to succession planning: contract, freelance, and interim options
How TCG can help you
Our experienced team of consultants are managing succession planning hires from a newly-qualified level through to Head of Tax. Covering both permanent and interim requirements, we deliver succession planning solutions across all tax specialisms from Corporate Tax Compliance and Reporting, Corporate Tax Advisory, Indirect Tax, Transfer Pricing and Employment Tax