Having spent the last 18 years involved in human resources and talent management, I believe the best way to approach management succession planning is by taking a broad perspective. Instead of focusing on the potential problem of succession planning for the top positions of the bank, consider a talent management program to address succession planning at all levels. These six steps will help.
- Create and maintain a pipeline of prospect candidates. Meet with prospective employees the same as you meet with prospective clients. Conducting informational interviews when you’re not looking to fill certain positions is extremely effective. It’s also a good idea to establish and maintain a great relationship with recruiters. The same recruiters who invites you to move to another organization can provide connections. Even though hiring talent through recruiters can be expensive, there may be times when you will need to use their services. Also, tap your network of friends and colleagues (and employees) to get referrals. Job hunting, whether searching or hiring, is all about who you know. Lastly, visit colleges to recruit talent. College students need to be educated about a career in banking — especially those pursuing business, finance and economics majors.
- Establish and use an education and training budget. Invest in educating all of your employees through college tuition reimbursement and technical skills certifications. Many organizations establish a training budget but it’s the first thing to get cut in hard times. Unfortunately, many employees — especially the top talent who are usually lifelong learners — leave the bank due to lack of educational opportunities. Banking is an industry that demands constant training in order to stay on top of regulatory changes and technology. Education through webinars, onsite seminars, conferences, internal training programs and subscriptions to industry publications is important.
- Establish a career development path for all employees. Discover your employees’ talents through assessment tools, interviews and performance reviews. These are great opportunities to get to know your employees’ strengths and maximize them at your institution. Align your employees’ career aspirations with company needs by providing opportunities within the company but also by encouraging participation in community activities.
- Create an employee personal development program. Develop your employees’ soft skills, i.e., presentation, negotiation and time management skills. All are crucial to succeed in business. Additionally, your top talent — the people you have in mind to promote into future leadership positions — need management and leadership development. Unfortunately, the financial services industry has reduced its investment in soft skills in the past two decades. It’s time to invest in the soft skills as well as the technical ones.
- Support a mentoring program. Develop internal mentoring programs — both formal as well as informal. It can be as simple as pairing a mentor and a mentee to work on professional development. Some organizations establish a formal program where they require participants to report progress, time spent, goals, etc., but informal mentoring relationships can be just as successful. Encourage your employees to seek mentors and to mentor others. More seasoned employees have much to offer younger employees. But you can also encourage young employees to mentor youth through community organizations. Learning to mentor as a young professional can be help the next generation know what to look for in a mentor for themselves. Also, be open to “reverse mentoring” which is when younger workers mentor older workers in specialized areas such as using new technology.
- Identify key positions that require specialized skills. Many banks are already facing the departure of long-term talent. This is happening at all levels and it must be addressed quickly. Positions such as president, CEO, and directors need to be a focus of succession planning and should be discussed at the annual strategic planning sessions with the board members present. Consider establishing an age limit for directors to ensure succession is planned in advance.
Another key position is the core system guru. Someone with a general IT background might not be the right fit. I have found that the best core system people come from the operations area of the bank.
A successful succession plan will take into consideration people’s individual gifts to ensure they are a good match to the positions that needs filling. As you plan for management succession, start with a broad view by establishing a strong talent management program in your bank and the succession issue will take care of itself.
Marci Malzahn is president and founder of Malzahn Strategic, a community bank consultancy focused on strategic planning, enterprise risk management, and talent management. Marci is also a professional speaker and published author of three books. Contact her at [email protected].