1 in 4 business leaders don’t have a succession plan for top roles

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New independent research by specialised recruiter Robert Half finds that succession planning is not a high priority for Australian business leaders with more than one-quarter (27%) stating they haven’t made plans to identify a successor for their current role. Not planning to leave in the near future (49%) and being too busy with other priorities (42%) are cited as the top reasons for not having a plan in place. Further, 40% of Australian businesses do not have a plan in place to replace junior and mid-level talent, while 23% don’t have a succession plan for their executive and senior-level talent, indicating they are better prepared to replace more senior roles.


  • 27% of Australian business leaders don’t have a succession plan in place for their current role
  • Succession planning is critical to business continuity but the new research shows it is often viewed as a lower priority compared to other day-to-day responsibilities (42% of respondents), 49% cite not planning to leave in the near future as the top reason for not having a succession plan
  • It is essential to identify and train successors for roles at all organisational levels, however, 23% of business leaders don’t have a succession plan in place for executive/senior-level talent and 40% don’t have a succession plan in place for junior to mid-level roles
  • Technical expertise, people management skills and shared values are the top three traits business leaders look for in a (potential) successor

“Succession planning is critical to business continuity when valued staff members leave – especially tenured leadership, but it’s often overlooked as a lower priority compared to other day-to-day responsibilities. For businesses to successfully adapt and continue to run smoothly without disruption, it’s essential to identify and train successors for roles, not just for executive-level positions, but for roles throughout the organisation,” said Nicole Gorton, Director Robert Half Australia in announcing Robert Half’s latest survey results.

Why senior-level talent hold back on succession planning for their own role

The reasons why senior-level talent have not identified a successor for their own role can differ per department head. According to the majority (70%) of surveyed CIOs, a lack of intention to leave soon is the top reason for not having a succession plan in place for their own role, with the second most common reason being a belief that it is the responsibility of HR (39%). Compared to CIOs, nearly half as many CFOs say not planning to leave soon (38%) is the reason for not having a succession plan for their role while being too busy focusing on other priorities (42%) is the top reason among CFOs.

When asked what the most important traits are they look for in a (potential) successor, 42% identify technical expertise, followed by people management and leadership skills (40%), shared values (32%) and company vision for the future (31%). Only 30% require their successor to have internal company knowledge, indicating many organisations are willing to hire external talent for their leadership positions.

When it comes to collective team responsibility for ensuring there is a succession plan in place for roles, two-thirds (66%) of business leaders have a succession plan in place for executive/senior-level talent, but this falls to 52% for junior to mid-level roles. Among those who do not have a succession plan in place for their team members, nearly half (45%) say it’s because they’re not expecting team members to leave soon, while being too busy focussing on other concerns is the second most common reason (36%). More than one-third (34%) also point to HR as succession being their responsibility and 28% state they don’t have qualified candidates within the company.

Nicole Gorton said: “The assumption that turnover isn’t likely to happen – both for leadership in their own roles and that of their team – is short-sighted. Forces like employers actively poaching talent to fill crucial roles in a tight labour market and unexpected events means organisations need to be prepared and have a plan in place to fill their roles, on all levels. Long-term planning is essential when the need for change is as inevitable as it is unpredictable in nature.”

“Succession planning isn’t just about continuity and preparing business for inevitable change. Succession planning also helps to build a workplace culture around professional development, enhances knowledge-sharing between existing talent within the organisation, and helps leaders to put processes in place around how to identify and retain future leaders,” concluded Gorton.

Business size affects succession planning

Based on the research, large organisations have a more formalised succession plan in place compared to small to medium-sized businesses – with SMEs trailing behind their larger counterparts for roles across different levels within the business.

SMEs cite the same reasons for not having a succession plan as not believing their team to leave soon, followed by being too busy focussing on other concerns within the business, and not having qualified candidates in the company.

Percentage of Australian business leaders who don’t have a succession plan in place

  Business size
All SMEs Large
The role business leaders currently hold 27% 32% 18%
Executive/senior talent within your organisation 23% 26% 18%
Junior to mid-level talent in their team 40% 42% 36%

Independent survey commissioned by Robert Half among 300 business leaders, including 100 CFOs and 100 CIOs in Australia

 

Robert Half has identified the potential pitfalls for organisations that lack a succession plan for their senior leadership talent:

  • Business disruption. Productivity and operational efficiency are at risk without a contingency plan when key talent leaves. An orderly succession ensures that a leadership departure remains a manageable event rather than an organisational crisis.
  • Legacy loss. A company that doesn’t engage in executive mentoring and knowledge-sharing can struggle with the retention of critical information and potentially lose institutional expertise.
  • Strategy standstill. High-level executive absences and departures can put strategic decision-making on hold, impacting long-term projects and initiatives.
  • Succession ambiguity. The lack of a defined advancement protocol can hinder internal promotions and undermine organisational confidence, impacting everyone from the CFO aspiring to a CEO role to executives and staff throughout a company.
  • Protracted leadership void. Companies faced with an unplanned departure frequently appoint an interim leader to fill the gap while a search is conducted, but it’s prudent for executives to anticipate such circumstances to ensure a smooth transition, continuity of leadership, and graceful exit from the role.
About Prof Janek Ratnatunga 1129 Articles
Professor Janek Ratnatunga is CEO of the Institute of Certified Management Accountants. He has held appointments at the University of Melbourne, Monash University and the Australian National University in Australia; and the Universities of Washington, Richmond and Rhode Island in the USA. Prior to his academic career he worked with KPMG.