Management Bench Strength Low At Many Employers, 40% Do Not Have Enough Future Leaders On Board

Oct. 10, 2011 – The management pipeline is bare at many employers, according to a survey by OI Partners, a global coaching and leadership development/consulting firm.

Four out of 10 companies do not have enough employees to succeed their current executives and high-potential workers, and 3 out of 10 do not have enough middle management successors, according to the survey.

“That means employers have not selected their future leaders and do not have anyone to step in if they suddenly lose key executives or managers. The cost of lost opportunities could be huge,” said Steve Ford, chair of OI Partners.

To build the next generation of leaders, about half of employers will be developing their middle managers and high-potential employees. One-quarter will promote now-ready executives to higher positions. Only 1 in 5 plans to recruit executives from their competitors.

The survey was conducted at the annual conference of the Society for Human Resource Professionals (SHRM). OI Partners received responses from 220 employers.

“Companies have not been hiring as many replacements as they need for employees who are promoted, leave for other jobs, or were laid off due to cutbacks.  Many employees who are rated high potential are not receiving the development and training they need to be prepared to assume these positions.  The management pipeline for future leaders remains thin even with many qualified managers looking for jobs,” said Ford.

With management successors in short supply and companies not hiring as much as usual, this is an opportunity for current employees to show they should be considered for advancement.

“When employers are ready to fill management slots, most companies look internally to their own employees. Fewer employers are hiring their replacements from outside their companies or from their competitors. This is an opening for employees already on board to demonstrate that they have the skills, leadership qualities and achievements their employers are seeking,” Ford added.

Key findings from the survey are:

• CONCERNED ABOUT LOSING TALENT: More than 8 out of 10 employers are worried about losing key employees today and when the economy improves. One-third of companies are very concerned about losing talent, and more than half are moderately concerned.
• MOST AT RISK OF LEAVING: High-potential employees and middle managers are considered most likely to leave companies.  Almost half (48%) of businesses regard high-potentials as having the biggest probability of leaving, and 39% of companies are concerned about middle managers leaving.
• SUCCESSION PREPARATION: 41% of surveyed companies do not have enough executive-level successors, 39% do not have enough successors for high-potential employees, and 28% do not have enough middle management successors.
• WHERE FUTURE LEADERS WILL COME FROM: 52% of employers plan to develop their middle managers into future leaders, 49% intend to build their high-potential employees, and 25% plan to promote now-ready executives to higher positions. Only 20% anticipate recruiting successors from their competitors.