The UK’s 100 leading companies need to do more to manage their talent pipeline to avoid a skills shortage at the top of their organisations, says a new report.
The review of the annual reports of all FTSE 100 companies revealed that more than two-thirds (68%) have admitted to having problems with succession planning to their boards.
The study, by New Street Consulting Group (NSCG), found that almost three in 10 (29%) firms admitted to having a skills gap on their boards – with technology roles the most commonly cited gap (13%) followed by environment, social and governance (7%).
Board-level turnover has increased since the coronavirus pandemic began. The analysis shows that there were 232 changes at the boards of UK listed companies in April 2020, above the monthly average of 206 changes over the last two years.
As dealing with the pandemic has become a priority for businesses this year, the focus on succession planning has fallen through the gaps. Agata Nowakowska, Area Vice President at Skillsoft, explains what impact that will have: “The skills gap has been growing exponentially for some years and this research shows that Britain’s biggest employers are failing to invest time and attention in their talent pipelines and face significant skills gaps on boards.
“As the war for talent intensifies due to the post-pandemic circumstances, employee development and talent pooling will become increasingly important to building a modern workforce that’s adaptable and flexible.
“Addressing and easing workplace role transitions will require new training models and approaches that include on-the-job training and opportunities that support and signpost workers to opportunities to upgrade their skills. Similarly, investing in digital talent platforms that foster fluidity, by matching workers and their skills with new work opportunities within the enterprise will be key.”
The research follows a recent warning from Grant Thornton’s Corporate Governance Review that 78% of the FTSE 350 gave little to no insight into board succession, and 82% failed to explain how they identified and developed people for senior management positions.
Successful board-level succession planning is key in avoiding disruption when a key executive steps down. However, the research suggests that board members responsible for succession are too preoccupied with their other responsibilities, and so it is often left in the dark.
Colin Mercer, NSCG managing director, said: “Succession has been pushed down the list of priorities for boards. That is a concern given the disruption the sudden departure of a key executive can cause and the impact to shareholder value that can result.”
“In today’s competitive environment, a business can’t afford to be rudderless. Strategic or operational drift caused by a lengthy gap between senior appointments can be damaging.”