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Succession planning is the key to growth

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30th Jun 2014
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With the worst of the recession behind us, attention is turning to growth. But as the job market has warmed back up – so too has the war for talent, says Tara Ricks of Randstad.

That presents a much bigger problem for accountancy firms than it once did. The potential pool of high-flying qualified accountants has become much shallower in the wake of punitive visa changes. These have driven down the number of foreign accountants working in the UK.  For instance, the South African Institute of Chartered Accountants says the number of their members working here has fallen from roughly 4,880 in 2013 to just 2,760 today. The effects on qualified accountants from Australia and New Zealand have been similar.

In this climate of increasing talent shortages, there is renewed interest in succession planning. Three quarters of HR directors working in accountancy firms considered succession planning to be more important to them than before the recession. More than two thirds say it is likely to become a higher priority in the future. Because succession planning is much more sophisticated than mere risk-mitigation – who takes over if the senior partner is hit by a bus. Now it focuses on identifying potential future leaders to fill key positions. Succession planning helps to ensure key employees know they’re being groomed for a particular position. That can give them a strong sense of having a clearly defined future within the company. And that’s a powerful retention tool.

While more accountancy firms practice succession planning than average, there is still a lot to be done. While only a fifth of British companies are concentrating solely on short-term succession planning – in accountancy, it’s a third.  So while a huge number of professional services firms are carrying out succession planning, they aren’t necessarily doing it very well. 

The Big Four and mid-tier firms are renowned for being excellent sources of talent for in-house financial roles and this may go some way to explaining why the sector’s succession planning appears to be so short term. That might be a pragmatic approach to an endemic problem. Or it goes some way to explaining the retention problem in the first place.

 

Tara Ricks is the managing director of specialist accountancy recruiter Randstad Financial & Professional.

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