THE MAJORITY OF ACCOUNTANCY FIRMS say succession planning is now more important than before the recession.
Three-quarters of HR directors believed succession planning was of higher importance now than in 2006, according to a poll of 100 leading HR executives by accountancy recruiter Randstad Financial & Professional.
Succession planning focuses on identifying potential future leaders to fill key positions, Randstad found. There is rising interest in succession planning, with 67% of HR directors working in accountancy firms saying it is likely to be of higher priority in future.
The poll found that only 8% of accountancy employers are failing to undertake any kind of succession planning, in comparison to 21% of employers across the UK.
KPMG’s 2014 Global Audit Committee Survey also found issues over skills and recruitment. It recently found that two thirds of UK respondents believed that the issue of talent management was not given enough agenda time.
Managing director of Randstad, Tara Ricks, said: “Sound succession planning is not just about risk-mitigation. It helps to ensure key employees know they’re being groomed for a particular position, which gives them a strong sense of having a clearly defined future within the company. This is a powerful retention tool that taps into career fulfilment and keeps people from leaving their company for greener pastures.”
As the UK’s qualified accountants shrinks and the number of foreign accountants working in the UK decreases, the talent management and retention elements of succession planning are becoming more pertinent.
The South African Institute of Chartered Accountants said the number of their members working in the UK has fallen from 4,880 in 2013 to only 2,760 today. Membership of the UK branch of the New Zealand Institute of Chartered Accountants, NZICA UK, has also shrunk by 12% from 2,304 in 2008 to 2,023 in 2013.
Of the organisations carrying out succession planning, 50% of accountancy employers focus on the top three levels of management and below, compared to the UK average of 37%.
Ricks added: “By focusing on only the top one or two levels of management, the process was supposed to remain manageable as only a small percentage of the workforce will be involved in succession planning.
But that risks demotivating and alienating a large portion of your workforce.”
Almost half (44%) of the UK’s blue-chip employers undertake both short and long-term succession planning, whereas it’s only 33% in accountancy. More than a fifth (22%) of UK wide firms are concentrating solely on short-term succession planning.
Ricks said: “Effective succession planning can’t be done in a vacuum and needs to be an integrated component of a company’s approach to talent management. It’s a part of the HR process that just isn’t being properly exploited.”
To ensure firms are recruiting for the long-term, Randstad suggests that the process needs to begin as early as the initial interviews during recruitment.
Revenue and profitability growth in on the rise for CPA firms, found a survey from the American Institute of CPA’s and its subsidiary CPA.com
The second largest improvement in ‘significant’ levels of financial distress since the EU Referendum was in professional services, found research from Begbies Traynor
Carter Backer Winter has acquired Edwards Financial Services, expanding its financial planning department
New growth opportunities in Aberdeen, North East Scotland, are being invested in by Grant Thornton