Study finds that for every two senior executives there’s only one job-ready successor
The country’s leadership pipeline is at risk of running dry, according to a new study by the Conference Board of Canada. The Strategic Value of People: Human Resources Trends and Metrics, found that the average age of Canadian executives is 50, while the average age of second-level executives (those who could take their place) is 48.
The survey of 166 HR leaders found more than half of the senior executives and 40 per cent of the second-level executives in the government, education and health and primary industry sectors will be eligible to retire in the next five years. More than two-thirds of respondents have identified critical leadership positions for the purpose of succession planning, but for every two senior executives there’s only one job-ready successor.
“These numbers confirm what was probably well known,” said Ruth Wright, senior research analyst at the board and author of the study. “We’re operating in a highly competitive environment where talent is at a premium on a global level and it speaks to the critical importance of planning for the workforce of the future.”
The Conference Board study provides a different look at HR measurement, said Wright. Traditional HR metrics have focused on the size and cost of the HR function and related activity, she said.
“They weren’t focused enough on talent in terms of workforce capability, the quality of processes that build workforce capability, really understanding what’s in the pipeline and what the talent needs of the organization are and how well HR is responding to those needs,” said Wright.
The Conference Board wanted to look at metrics in a different way and help executives understand the overall value of people to the organization. The study examined strategic talent management indicators, and besides the problem with the leadership pipeline, the resulting data showed the next biggest challenge facing Canadian organizations is attracting and retaining a highly skilled workforce.
The study found the leadership indicator is related to engagement and turnover of new hires, said Wright. This intuitively makes sense: if a company can’t keep and engage new employees, then there won’t be any viable candidates for future leadership positions.
“It’s a way of understanding where we are now. It provides an initial baseline and something that we can measure against going forward as we focus on attraction, development and retention of talent and developing future leaders,” said Wright of the study.
She said metrics that draw attention to these critical issues give HR the information it needs to sit down with the executive team and show why these talent management initiatives need more resources if the organization is going to thrive in the future.
Wright would like to see the Conference Board’s survey of HR trends and metrics become a regular feature, just like the board’s annual compensation planning survey.
“What we’ve tried to do with this is to use a talent management framework as a lens to focus measurement on what really matters from an organizational perspective and what really matters is the workforce capability going forward to execute organization objectives and strategies,” said Wright. “Hopefully this will start a dialogue and we’ll increase the participation going forward and have a useful resource and tool.”
The survey of 166 HR leaders found more than half of the senior executives and 40 per cent of the second-level executives in the government, education and health and primary industry sectors will be eligible to retire in the next five years. More than two-thirds of respondents have identified critical leadership positions for the purpose of succession planning, but for every two senior executives there’s only one job-ready successor.
“These numbers confirm what was probably well known,” said Ruth Wright, senior research analyst at the board and author of the study. “We’re operating in a highly competitive environment where talent is at a premium on a global level and it speaks to the critical importance of planning for the workforce of the future.”
The Conference Board study provides a different look at HR measurement, said Wright. Traditional HR metrics have focused on the size and cost of the HR function and related activity, she said.
“They weren’t focused enough on talent in terms of workforce capability, the quality of processes that build workforce capability, really understanding what’s in the pipeline and what the talent needs of the organization are and how well HR is responding to those needs,” said Wright.
The Conference Board wanted to look at metrics in a different way and help executives understand the overall value of people to the organization. The study examined strategic talent management indicators, and besides the problem with the leadership pipeline, the resulting data showed the next biggest challenge facing Canadian organizations is attracting and retaining a highly skilled workforce.
The study found the leadership indicator is related to engagement and turnover of new hires, said Wright. This intuitively makes sense: if a company can’t keep and engage new employees, then there won’t be any viable candidates for future leadership positions.
“It’s a way of understanding where we are now. It provides an initial baseline and something that we can measure against going forward as we focus on attraction, development and retention of talent and developing future leaders,” said Wright of the study.
She said metrics that draw attention to these critical issues give HR the information it needs to sit down with the executive team and show why these talent management initiatives need more resources if the organization is going to thrive in the future.
Wright would like to see the Conference Board’s survey of HR trends and metrics become a regular feature, just like the board’s annual compensation planning survey.
“What we’ve tried to do with this is to use a talent management framework as a lens to focus measurement on what really matters from an organizational perspective and what really matters is the workforce capability going forward to execute organization objectives and strategies,” said Wright. “Hopefully this will start a dialogue and we’ll increase the participation going forward and have a useful resource and tool.”
