'Putting employees in the leadership pipeline can help spark interest in hard-to-staff roles and eliminate succession gaps'
Many business leaders are failing to ensure smooth leadership succession within their company, according to a recent report from Robert Half.
Overall, more than four in 10 company leaders (43 per cent) have not identified someone to take over their role when they decide to move on, according to the report.
Currently, company leaders say they lack succession plans in these management levels:
And this lack of succession plan is bad for business, according to Robert Half.
“Succession planning is easy to put aside while striving to keep business initiatives on track. But when a key executive or top performer departs – taking years of institutional knowledge with them and forcing the company to find a suitable replacement – projects can go awry, morale can suffer, and investors can lose faith in the company,” says the HR consulting firm.
Those who fail to plan are at risk of the following:
“Having plans in place helps minimize disruptions and reputational risks,” says Robert Half.
Ambition may help employees climb the corporate ladder, and many hiring managers assume that those who express the strongest desire to lead are naturally the best suited for leadership. But recent research from Stanford Graduate School of Business suggests otherwise: ambition alone is not a predictor of leadership effectiveness, and relying on it as a primary hiring criterion can lead to selecting candidates who lack key leadership competencies.
Employers’ hiring plans
On top of the lack of succession plans, nearly half (46 per cent) of employers are hiring employees for new permanent positions in the first half of 2025, according to Robert Half’s survey of more than 1,050 business leaders.
Meanwhile, 49 per cent are looking to maintain their headcount, hiring only for vacated permanent positions.
Top reasons for hiring include:
- company growth (47 per cent)
- turnover (44 per cent)
- new projects (41 per cent).
However, 92 per cent of managers recognize it will be a competitive hiring environment, noting that finding skilled talent is already a challenge.
Failing to fill open positions can harm organizations: “The negative effects of leaving roles empty can quickly cascade across an organization,” Robert Half says, citing these examples:
Despite a slight improvement in overall business health in January, hiring sentiment among small employers remains weak, according to a previous report from the Canadian Federation of Independent Business (CFIB).
How to do effective succession planning
Expanding a succession plan to include many employees other than senior leaders can be challenging, says Alex Green, senior marketing director for talent solutions, ADP.
Here’s how to make the process smoother, as Green shares:
- Use talent management technology to guide strategic decisions about succession.
- Ensure that employees with high potential have the support resources and training opportunities they need to be effective in their future position.
- Be transparent with potential successors so they can have a say in the next phase of their career, but also be discreet to avoid creating workplace tension.
- Conduct exit interviews and periodic engagement surveys to determine what makes employees leave or stay with the organization.
- Sponsor a retirement plan so employees can feel comfortable retiring from the organization when the time is right.
To hire leaders who possess both competence and character, organizations should implement structured hiring processes that go beyond standard competency interviews, says Dusya Vera, executive director of the Ian O. Ihnatowycz Institute for Leadership at the Ivey Business School.
