HR · 25 April 2017

Lack of succession planning puts futures of small firms at risk

Financial insecurity
Succession planning means identifying and developing new leaders within a company who can replace leaving staff
Over six in ten small UK business owners are unprepared for the long-term loss of key staff members, as a new study highlights the neglect of succession planning within firms.

Despite the revealing statistic, the survey of over a thousand small business leaders, by challenger bank Aldermore, revealed that more than one in seven considered the loss of a senior team member as the biggest threat to their business.

For one in six respondents, the fear of losing an entire team was a considerable worry. Further demonstrating the importance of succession planning, nine in ten small business owners said they had at least one member of staff who would be difficult to replace.

For owners of micro companies who depend on a small team, effective succession planning can prevent operational delays and damage tobusiness growth.

Commenting on the findings, Carl Dammassa, a director at Aldermore, confirmed that succession planning should be considered a crucial part of an owner’s strategy.

it is concerning to find that the majority of SMEs do not have any succession plans in place despite being conscious of the adverse consequences that may result should crucial employees leave the business, he said in a statement.

Small business owners unprepared for resignations could look to those with a succession plan in place.

Almost half of those with a succession plan said they took measures to ensure their employees considered the company as a viable career prospect, delivering workplace training to widen employee’s capabilities beyond their current role.

Over two in five already had individuals in mind to take on specialist roles if other employees departed the company.


 
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ABOUT THE EXPERT

Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.

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