June 6, 2011
SHRM Poll: Succession Planning
Succession Planning ©SHRM 2011 2
Key Findings
What percentage of organizations currently have succession plans in place? Less than a quarter (23%) of
organizations currently have a formal succession plan in place, but more than one-third (38%) have informal
succession plans. Larger organizations (2,500+ employees) are more likely to have a formal succession plan or
process in place than smaller organizations (1 to 499 employees).
What are the most common job levels covered in succession plans? Approximately one-half of succession plans
include president/CEO (49%), executives (54%), senior management (58%) and middle management (51%).
Are succession plans regularly evaluated or reviewed? Almost one-third (30%) of organizations evaluate or
update their succession plans once a year.
Why have some organizations not developed a formal succession plan? Almost one-half (43%) of the
respondents indicated that more immediate requests take precedence in the organization over developing a
formal succession plan. Other organizations stated that they have not yet given consideration to succession plans
(16%) or feel that their staff size is too small (15%).
Has there been any change in the number of organizations with an informal succession plan or process in
place? The number of organizations who claim to have an informal succession plan or process in place has
increased since 2006 from one quarter (26%) to more than a third (38%) in 2011.
Succession Planning ©SHRM 2011 3
Does your organization have a formal succession plan in place?
2006(n = 385)
2011(n = 426)
Yes 29% 23%
No, my organization has an informal succession plan or process 29% 38%
No, but my organization intends to develop a plan in the near future 26% 22%
No, and my organization has no intentions to develop a plan 16% 17%
Succession Planning ©SHRM 2011 4
Does your organization have a formal succession plan in place?
Comparison by organization staff size
Comparison by organization sector
Small Organizations Large Organizations Differences Based on Organization Staff Size
1 to 99 employees (12%) 100 to 499 employees ( 15%)
2,500 to 24,999 employees (38%)25,000+ (58%) Larger organizations > smaller organizations
Larger organizations (2,500 to 25,000+ employees) are more likely to have a formal succession plan or process in place compared with smaller organizations (1 to 499 employees).
Differences Based on Organization Sector
Publicly owned for-profit organizations (44%)
Privately owned for-profit organizations (15%) and nonprofit organizations (22%)
Publicly owned for-profit organizations> privately owned for-profit and nonprofit organizations
Publicly owned for-profit organization are more likely to have an informal succession plan or process in place compared with privately owned for-profit and nonprofit .
Succession Planning ©SHRM 2011
Generally speaking, who is primarily responsible for selecting successors for positions?
5
Depends on the position 41%
President/CEO 12%
The person who is directly above the position selects successor 11%
Executives (e.g., chief financial officer, chief operating officer) 8%
Senior management (e.g., senior vice president, vice president) 8%
The person who currently holds the position selects successor 5%
Middle management (e.g., director, manager, supervisor) 5%
Board of directors 4%
HR 2%
Other 5%Note: n = 213. Total does not equal 100% due to rounding.
Succession Planning ©SHRM 2011
Generally speaking, who is primarily responsible for approving successors for positions?
6
2006(n = 220)
2011(n = 212)
Depends on the position * 30%
President/CEO 35% 26%
Senior management (e.g., senior vice president, vice president) 14% 13%
Executives (e.g., chief financial officer, chief operating officer) 12% 10%
The person who is directly above the position approves successor * 8%
Board of directors 14% 6%
Middle management (e.g., director, manager, supervisor) * 1%
HR 9% 4%
Other 4% 3%
Note: 2011 total does not equal 100% due to rounding.“*” denotes the response was not available in 2006 survey.
Succession Planning ©SHRM 2011
Generally speaking, who is primarily responsible for leading the organization’s succession planning efforts?
7
2006(n = 221)
2011(n = 209)
HR 36% 40%
President/CEO 20% 21%
Executives (e.g., chief financial officer, chief operating officer) 14% 13%
Senior management (e.g., senior vice president, vice president) 14% 13%
Middle management (e.g., director, manager, supervisor) * 4%
Board of directors 4% 3%
Other 4% 6%Note: .“*” denotes the response was not available in 2006 survey.
Succession Planning ©SHRM 2011 8
Which of the following levels of employees does your organization’s succession plan include?
Nonexempt (hourly) nonmanagement (e.g., assistant, coordi-nator, specialist)
Professional nonmanagement (e.g., analyst, nurse, engineer)*
Middle management (e.g., director, manager, supervisor)
Senior management (e.g., senior vice president, vice president)
Executives (e.g., chief financial officer, chief operating officer)
President/CEO*
0.17
0.56
0.75
0.67
15%
20%
51%
58%
54%
49%
2011 2006
Note: Totals do not equal 100% due to multiple responses. “*” denotes the response was not available in 2006 survey.
(n = 228) (n = 223)
Succession Planning ©SHRM 2011 9
How often does your organization evaluate or update its succession plan?
Note: “*” denotes the response was not available in 2006 survey. “**” denotes the response was not available in 2011 survey.
Other
As needed/no specific review cycle
Once every three years
Once every two years
At least once a year**
Once a year*
Twice a year*
2%
44%
1%
6%
47%
10%
50%
1%
6%
30%
5%
2011 2006 (n = 199) (n = 215)
Succession Planning ©SHRM 2011
Does your organization’s succession plan incorporate methods that:
10
Note: Totals do not equal 100% due to multiple responses.
2011(n = 146)
2006(n = 214)
Develop potential leaders? 80% 52%
Track potential leaders? 75% 61%
Evaluate all employees annually on their leadership potential? 73% 53%
Succession Planning ©SHRM 2011
HR department’s responsibilities in connection with the organization’s succession plan
11
Communicating succession planning status to all current employees
Tracking data to support the succession planning process
Ensuring critical positions within the organization have proper successors
Identifying gaps in employee competency levels
Identifying potential succession gaps
Identifying prospective vacancies in leadership positions
Identifying key positions in the organization
Identifying workforce development needs
Identifying employees who could potentially fill future vacancies in leadership positions
Working with management on skills employees will need in the future
43%
64%
57%
58%
62%
61%
62%
74%
71%
74%
25%
53%
54%
58%
62%
65%
68%
70%
72%
75%
2011 2006 (n = 184) (n = 223)
Note: Totals do not equal 100% due to multiple responses.
Succession Planning ©SHRM 2011 12
Does your organization currently use software that is exclusively designed to manage the succession planning process?
Yes10%
No90%
2011(n = 162)
Yes21%
No79%
2006(n = 215)
Succession Planning ©SHRM 2011 13
What is the primary reason your organization has not developed a formal succession plan?
Other
Lack of financial resources
Lack of staff resrources*
The leadership team (i.e., executive management, board of directors) feels there is no value (or need) in developing a plan
Our staff size is too small
My organization has not yet given it consideration
More immediate organization requests take precedence
4%
3%
3%
10%
9%
50%
4%
1%
7%
13%
16%
16%
43%
2011 2006n = 140 n = 151
Note: “*” denotes the response was not available in 2006 survey.
Succession Planning ©SHRM 2011
Demographics: Organization Industry
14
n= 350
Industry PercentageManufacturing 18%Health care and social assistance 13%Professional, scientific, and technical services 11%Educational services 8%Finance and insurance 8%Public administration 5%Accommodation; food services and drinking places 3%Arts, entertainment, and recreation 3%Information 3%Retail trade 3%Transportation and warehousing 3%Construction 2%Religious, grantmaking, civic, professional and similar organizations 2%Utilities 2%Wholesale trade 2%Administrative and support and waste management and remediation services 1%Agriculture, forestry, fishing and hunting 1%Management of companies and enterprises 1%Mining 1%Real estate and rental and leasing 1%Personal and laundry services 0%Private households 0%Repair and maintenance 0%Other services except public administration 9%
Succession Planning ©SHRM 2011
Demographics: Organization Sector
Other
Government sector
Nonprofit organization
Publicly owned for-profit organization
Privately owned for-profit organization
5%
9%
21%
47%
17%
15
Note: n = 352. Total does not equal 100% due to rounding.
Succession Planning ©SHRM 2011
Demographics: Organization Staff Size
1 to 99 em-ployees
100 to 499 employees
500 to 2,499 employees
2,500 to 24,999 employees
25,000 or more employees
22%
37%
19%15%
7%
16
n = 353.
Succession Planning ©SHRM 2011
Demographics: Other
Does your organization have U.S.-based operations (business units) only or does it operate multinationally?
U.S.-based operations 73%
Multinational operations 27%
17
Is your organization a single-unit company or a multi-unit company?
Single-unit company: A company in which the location and the company are one and the same.
34%
Multi-unit company: A company that has more than one location. 66%
Are HR policies and practices determined by the multi-unit corporate headquarters, by each work location or both?
Multi-unit headquarters determines HR policies and practices 46%
Each work location determines HR policies and practices 3%
A combination of both the work location and the multi-unit headquarters determine HR policies and practices
52%
n = 349
n = 359
Note: n = 239. Total does not equal 100% due to rounding.
Level of HR department/function for which you respond throughout this survey
Corporate (company wide) 70%
Business unit/division 16%
Facility/location 14%
n = 241
• 20% of organizations indicated that employees at their work location were unionized.
n = 349
Succession Planning ©SHRM 2011
SHRM Poll: Succession Planning
Response rate = 16%
Sample composed of 426 randomly selected HR professionals from
SHRM’S membership
Margin of error is +/- 4%
Survey fielded February 25 - March 4th, 2011
18
Methodology
For more poll findings, visit: www.shrm.org/surveys
Follow us on Twitter: http://twitter.com/SHRM_Research
Top Related