2011 shrm poll_succession_planning_final_ks

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June 6, 2011 SHRM Poll: Succession Planning

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Page 1: 2011 shrm poll_succession_planning_final_ks

June 6, 2011

SHRM Poll: Succession Planning

Page 2: 2011 shrm poll_succession_planning_final_ks

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.

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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%

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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 .

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Succession Planning ©SHRM 2011

Generally speaking, who is primarily responsible for selecting successors for positions?

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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.

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Succession Planning ©SHRM 2011

Generally speaking, who is primarily responsible for approving successors for positions?

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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.

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Succession Planning ©SHRM 2011

Generally speaking, who is primarily responsible for leading the organization’s succession planning efforts?

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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.

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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)

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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)

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Succession Planning ©SHRM 2011

Does your organization’s succession plan incorporate methods that:

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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%

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Succession Planning ©SHRM 2011

HR department’s responsibilities in connection with the organization’s succession plan

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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.

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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)

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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.

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Succession Planning ©SHRM 2011

Demographics: Organization Industry

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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%

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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%

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Note: n = 352. Total does not equal 100% due to rounding.

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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.

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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%

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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

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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

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Methodology

For more poll findings, visit: www.shrm.org/surveys

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