Ritchie Bent, Group Head of Human Resources for Jardines gives his take on succession planning and demonstrating the ROI of staff development programmes.
How do staff development and succession planning fit into the career planning process for staff at Jardines?
Succession planning is also a form of development and is for the benefit of the shareholder, while career planning is for the benefit of the individual. So the two should really integrate with each other. Succession planning is an important part of the career planning process in order to develop each staff member. Firstly, you have to know that person extremely well and what’s missing from that person in terms of their capabilities for what they are going to require for the future.
Secondly, knowledge of these people and what they can do cannot be out sourced, as that’s really a process of people having actually seen it. You can get them evaluated on a one-off basis, and there are a lot of companies that will do senior executive evaluations to determine if a staff member is capable of doing a particular job. However, that should only be used as part of the decision making process, as there are many other considerations including input from people already at that level and input from people above that level, whether it fits strategically with what the company wants to do and whether it fits with that person’s career plan. In view of all the different inputs that are required, I don’t think you can outsource such high-level succession planning, and I include in that high-level executive recruiting. Search firms have to be used to find you ‘the bodies’ but their job should end with getting you, say five names. So agencies can be part of the decision, but the ultimate decision must be made by the company.
How would you advise HR to attract and retain better quality talent in their organisation?
I would say number one is there must be a clear career path for people. You must make provision for staff members’ career development and personal development. Secondly, remuneration levels are key and you’d better pay slightly over the odds rather than slightly under the odds if you can. But you can also compensate for this by ensuring people feel that they are growing professionally in the roll they’re in. Thirdly, by giving lots of personal attention it means HR directors getting out there. And what I say to my guys here is that 80% of their time should be out of the office, because your job is to be out there amongst the people. Then in here you are doing the bits and pieces, and then again you are out, and in this day and age it should be more anyway because you can take your office with you in the form of a Blackberry. HR is all about trust, and so the most important competency about an HR Director is that people trust you. If they don’t trust you they are not going to tell you anything, and if they don’t tell you anything, things are going to happen that you are not going to be able to predict and therefore are not going to be able to control.
What advice can you give to HR to help link staff development to ROI?
This is the most difficult thing to do of all, and we have been doing executive development for many years and I’ve not yet come up with the perfect solution. A lot of training development is an act of faith and as such is difficult to be measured. However, there are certain examples of things that we’ve done that have definitely had an impact on the business and can be readily measured in terms of ROI. Often projects that come out of training and development initiatives that are to do with improving the business or growing the business are often a very, very good way of demonstrating how there is a return of investment on this.
A second way of measuring the effectiveness of it, is people who were going to leave the company, and then suddenly went on a training programme that really turned them on, and then suddenly said, “I’m going to stay.” So it’s actually saving somebody who would have gone - you can do an ROI on that because there is a metric that says, for highly-rated mid-level executives it costs you 2.3 times the annual package to replace them, and that’s a conservative estimate. So in that way, by keeping people and stopping them leaving for at least a couple more years and by giving attention to their development, you can actually show the ROI. That can filter down to reducing turnover, by bringing the issue to even non-executive people; that just by training them they suddenly think “I’m important and so I won’t jump ship.’’ You can measure the ROI in terms of costs saving by not having to replace people.
I think the third method of measuring ROI is to monitor how prepared the Chief Executives are to continue to put their people on the same programmes year-in-year-out. The return on investment is the buy-in at the Chief Executive level, so the return is not financial but more psychological.
Paul Arkwright
Publisher
