Preparing for a broker’s departure can seem like an uncomfortable task, especially in small broker teams, but experts say businesses need to bite the bullet, or face the risks.
Preparing for a broker’s departure can seem like an uncomfortable task, especially amongst small broker teams, but experts say small businesses need to start biting the bullet, or face the risks.
Market research from Hays Recruiting found that SMEs are lagging behind big businesses in succession planning, and director Jane McNeill says they’re treading on thin ice.
“If brokerages don’t have a succession plan and they lose someone it can take several months to replace that person,” said Mc Neill.
“Throughout that period of time they’re losing money, it has a very direct and serious financial impact.”
Small brokerages are often more focussed on immediate, day to day tasks, said McNeill, leaving broader business plans overlooked.
“Often they’re limited in the number of people they can employ. In a small team you’ve got people who are doing specific roles and they’re looking more at the here and now instead of looking at what happens when one of those people leaves.”
This makes it even more crucial that small businesses prioritise succession planning, said McNeill, as the pool of resources for finding a replacement are much more limited.
“If they don’t put the time in they’re going to find themselves more exposed. If they suddenly lose someone and they don’t have anyone internally to bridge that gap with, they’re going to lose a lot more time by having to go out and look for someone externally.”
However there are risks involved with succession planning, said McNeill, and the need to find a balance between underplanning and overpromising can be compounded in smaller brokerages.
“The smaller the business the more impacted it can be by the fact that if somebody doesn’t move on, somebody who believes they’re going to step up and take on another role may then find themselves feeling a stagnant if that doesn’t happen.”
The best way to counteract this risk is to undergo regular and open career discussions with employees, said McNeill. She suggests a formal discussion once a year, followed up with interim discussions every three to six months as a good guideline.
“Usually what we find in small businesses is that if there’s open communication and employees know what they can expect and what’s ahead, if they’re being included in future plans, they tend to feel a lot more motivated and a lot more engaged and included.”
Hays research found that awareness around the importance of succession planning is growing amongst SMEs, but that many are still hesitant to begin, said McNeill.
“Whatever the business, succession planning can seem like an unnecessary and uncomfortable chore. However, avoiding these occasionally difficult decisions will only create greater risk as the company grows and matures. With that in mind, in many ways, the key to succession planning is just to start.”
