SUCCESSION PLANNING SEMINAR FOR SMALL AND MEDIUM SIZED BUSINESSES JONATHAN COULMAN EXECUTIVE DIRECTOR
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1 SUCCESSION PLANNING SEMINAR FOR SMALL AND MEDIUM SIZED BUSINESSES JONATHAN COULMAN EXECUTIVE DIRECTOR
2 Agenda 1. Workforce Succession Planning Jonathan Coulman Executive Director, Algoma Workforce Investment Break 2. Business Succession Planning Ron Spadoni Chartered Accountant, Partner KPMG 2
3 Introductions Name / company / organization / sector What are your expectations for today s workshop? 3
4 Who is AWiC? The Algoma Workforce Investment Corporation (AWiC) is one of 25 Workforce Planning Boards across Ontario. AWIC s mission is to identify workforce issues that affect communities in the Algoma region through research and provide solutions to these issues by engaging local stakeholders and partners.
5 The People behind AWiC Andrew Ross Sault Ste. Marie EDC Anita Vaillancourt Algoma University Annie Austin North Shore Tribal Council Dan Friyia Superior East CFDC Dan Morgan Canadian Mental Health Association Dawna Kinnunen YesYouCan Employment Congress Gary Premo Canadian Steel Trade Employment Congress Jim Baraniuk Algoma Anchor Agency (NE LHIN) Karol Rains Sault Community Career Centre Larry Little CDC of Sault Ste. Marie Linda Ryan Employment Solutions Mike Delfre Canadian Bush Plane Museum Mike Pratt BioForest Technologies Ralph Medaglia Essar Steel Algoma Rick Thomas Sault Ste. Marie Construction Association Russell Reid Regional Employment Help Centre Shawn Heard East Algoma Community Futures Dev. Corp. Stoney Burton Blind River Development Corp. Ted Newbury Sault College Tracey Seabrook Algoma District Services Admin Board
6 Community Partners
7 WORKFORCE SUCCESSION PLANNING 7
8 Workforce Succession Planning 1. Workforce Successsion Planning What is it? Why is it important? 2. An Overview of the Local Labour Market 3. A (Basic) Approach to Workforce Succession Planning 8
9 What is Workforce Succession Planning Workforce planning is a process where you: Identify the employees required to meet your organization s goals. Do what needs to be done on a day-to-day basis to address your workforce requirements (training/development, new hires, etc). Succession planning is an important component of workforce planning. It is a process that will: Match your organization s available (present) talent to its needed (future) talent. Help ensure that high quality replacements are in place for individuals who currently hold key positions that are crucial for the operations of your organization and, because of skill, seniority and/or experience, will be hard to replace. 9
10 Workforce Succession Planning Not an Exact Science Workforce succession planning is not a one time project, it s on ongoing process that should be flexible, reviewed often, and evaluated for effectiveness. Projections are not predictions and even your best projections will not be precise but they provide a direction that could be adapted as needed. 10
11 Why Now? Workforce succession planning is a hot topic lately Why is that? Changing Demographics and Talent Mismatch - The pressure to find the right skills at the right time will increase as working age populations decline, as we continue to lose our younger talent due to out-migration, as economies shift, and as the nature of work shifts. Individual Choice - Individuals are exercising their choice as they realize they have the power to opt for or against a given job, requiring companies to think differently about how they attract, retain and stay relevant to an ever select group of talented individuals. Source: Manpower Inc., World of Work Megatrends,
12 How does that Mismatch Translate Locally? In Sault Ste. Marie, more than half of the labour force (population 15 and over) was 40+. Based on the assumption that almost all of these people will retire by the age of 65, this means that 42,735 of the people who are in the 40+ category are projected to exit the labour force over the next 20 years and be replaced by the 32,415 people who are under the age of
13 Population Geography Population 2011 Population 2006 % Change Algoma 115, , % Blind River 3,549 3, % Dubreuilville % Elliot Lake 11,348 11, % Michipicoten 2,975 3, % Sault Ste. Marie 75,141 74, % Spanish % Thessalon 1,279 1, % White River % Source: 2011 National Household Survey & 2006 Census
14 Aging Population Median Age Canada Ontario Algoma Source: 2011 National Household Survey & 2006 Census
15 Aging Population Community Median Age Blind River Dubreuilville Elliot Lake Sault Ste. Marie Wawa White River Source: 2011 National Household Survey & 2006 Census
16 Out Migration of Youth (Algoma) Age Group In-migrants Out-migrants Net-migrants ,883 2, ,601 2,761-1, ,370 5, ,040 2, ,266 1, Total 13,160 14,956-1,796 Source: 2011 National Household Survey
17 Issue/Opportunity Aging Workforce Algoma has an Aging Population Media Age is 47.2 years (Canada is 40.6 years) + Out migration of youth Net out-migration of 1,200 people aged between 2006 and 2011 (2,800 in total) + Low Immigration rates = An aging Local Workforce
18 Issue/Opportunity Aging Workforce Accounting Bookkeepers 78% Forestry Professionals 75% HR Professionals 74% Manufacturing Managers 73% Who will replace these people in the Labour Force? Metal Working Machinists 70% Truck Drivers 68% Heavy Equipment Operators 68% Brick Layers 65% Admin Assistants 65% Personal Support Workers 63% Elementary and Secondary School TA s 60% Heavy Equipment Mechanics 58% Registered Nurses 47%
19 A BASIC APPROACH TO WORKFORCE SUCCESSION PLANNING 19
20 Workforce Succession Planning A Step-by-Step Approach: 1. Get the (your) demographics 2. Develop your workforce strategy 3. Develop an action plan 4. Measure your success and report progress 20
21 STEP 1: GET THE (Your) DEMOGRAPHICS This initial step of the process involves an analysis and projection of what your workforce needs will be based on what is available (internally and externally). 21
22 Create a Workforce Demographic Analysis What you need to know (data) within and outside your organization: Population / labour force trends Labour force characteristics (composition, occupations, educational attainment levels/requirements, income, mobility, etc) What you can do with the data: Identify recruitment challenges/opportunities Project workforce change based on demographic variables What you can t do as easily with this data: Identify impacts of economic, technological, and educational variables 22
23 Things to Remember When Doing Workforce Demographic Analysis One rarely works with perfect data. You must do the best that you can with the data you have and be aware of its limitations. Old data is not necessarily bad data. Demographic trends, especially population aging, move slowly. Historical data is a real bonus in doing workforce demographic analysis. Typically, one projects into the future on the basis of past trends. Understanding the big picture is important. What happens at your company/organization level does not occur in a vacuum. An understanding of larger trends helps to dispel anecdotal beliefs or perceptions. You may not be as unique as you think. 23
24 Create a Workforce Projection What you need to know (data): Number of workers for previous 10+ years broken down by age, sex, occupation, employment status Number of workers who exited each year broken down by age, sex, occupation, employment status, and reason for exit What you can do with the data: Calculate age/sex specific attrition rates Identify different future scenarios regarding workforce change Project out workforce change based on demographic variables for the next ten years What you can t do as easily with this approach: Identify impacts of economic, technological, and educational variables 24
25 Create a Workforce Projection Employee Name First Name Last Name Occupation Age Sex Years of Service Exit Date Age at Exit Reason for Exit Jodi Wise Reception 64 F 4 8/01/13 64 Retirement Jake Bryant Manager 58 M 4 Mindy Jensen Sales 62 F 6 7/01/11 62 Retirement Christopher Gross IT 48 M 8 Kyle Duncan Senior Manager 59 M 22 1/01/14 59 Retirement Duane Owen Finance 33 M 4 Dean Lawrence Reception 37 M 17 5/15/13 37 Resigned Corey Anderson Manager 39 M 22 Doug Lowe Sales 48 M 21 5/15/13 48 Resigned Julius Phelps IT 30 M 21 Darin Santos Senior Manager 58 M 12 1/01/14 58 Retirement Natalie Kim Finance 26 F 10 Luz Matthews Reception 30 F 0 2/15/14 30 Returned to School Avg Age 46 Median Age 48 Avg Retirement Age 61 Median Retirement Age
26 Create a Workforce Projection VisionPro A Workforce Succession Planning Tool VisionPro is designed to provide a user-friendly, accessible way to track and monitor employee information. If one of your strategies is to begin tracking employee information and you don t have a means to do it, this tool might be a interesting resource for you. 26
27 VisionPro A Workforce Succession Planning Tool 27
28 Question If you were to begin a workforce succession planning process for your organization, would you have access to the information required to do a workforce projection? Number of workers for previous 10+ years broken down by age, sex, occupation, employment status Number of workers who exited each year broken down by age, sex, occupation, employment status, and reason for exit 28
29 STEP 2: DEVELOP YOUR WORKFORCE STRATEGY Based on Step 1 Demographic Analysis and Workforce Projections, This step involves identifying strategic directions for recruiting/attracting/ retaining/training the workers that you will need. 29
30 Develop your Workforce Strategy Identify strategic directions and priorities - Strategic directions might be based on opportunities such as: re-inventing the older worker identify how to keep mature workers involved in some way in your succession plan (mentors, trainers, flexible work hours, contract work) competing in the youth market investigate supports and activities that exist to recruit/hire/retain youth (job/career fairs, internship program, coop programs, promotions/incentives) maximizing labour force participation work with Aboriginal organizations to identify potential workers and resources recruiting immigrants connect with existing initiatives to attract immigrants 30
31 Develop your Workforce Strategy Identify resources that are available to help you recruit/train the workers that you will need (high schools, colleges, universities, government agencies that provide support for apprenticeships/internships/training/job placements, etc). Coming Soon 31
32 Question Where will you recruit your future workers? Do you see the following as potential strategies to pursue? re-inventing the older worker competing in the youth market maximizing labour force participation of under-represented groups recruiting immigrants Can you think of other opportunities? 32
33 STEP 3: DEVELOP AN ACTION PLAN This step involves the identification of specific actions/projects that will allow you to move forward with your workforce succession planning strategy identified in Step 2. 33
34 Develop an Action Plan The scope of your strategies could range from small victories to cultural change. For identify: Objectives Activities/projects Responsibility (project lead/team) Timeframe Opportunities/barriers Expected results Measures for evaluation 34
35 Develop an Action Plan Make sure your actions/projects are linked to your workforce succession planning strategy. Projects could include: Exit interviews (if not a current practice) Employer and employee surveys Marketing and Recruitment tools Develop a mentorship program Training Recruitment outreach Targeted retention Database development (data archiving) 35
36 STEP 4: MEASURE SUCCESS AND REPORT PROGRESS This step involves developing a process for an ongoing monitoring of the action plan 36
37 Measure Success and Report Progress Review and adapt your plan regularly Evaluate progress: Process deviation from stated objectives Impact attainment of objectives or appropriateness of objectives Cost-effectiveness least-cost strategy to achieve objectives (comparative analysis) Provide progress reports as appropriate to management/employees to maintain buy-in and collaboration Collect feedback to inform and improve continued implementation Set timeframes for when the updates and reporting will be done. 37
38 Some Challenges you may face There are some challenges to succession planning, particularly for SME: Size of the organization: few positions = fewer opportunities for advancement, as a result employees with the potential and the desire to advance their careers move to larger organizations. Lack of financial resources: employees may leave for better salaries and benefits offered in other workplaces Lack of resources for training and development resulting in employees who are not prepared for promotions / vacant positions when they become available 38
39 Benefits Having a workforce succession plan will allow you to: have a continued supply of qualified, motivated people (or a process to identify them), who are prepared to take over when key employees leave your organization. ensure service continuity when key people leave. have the right people with the right skills and experiences in the right jobs at the right times. 39
40 Recap How to Begin Things you want to know before you begin a workforce succession planning process: What the future business environment of your organization/sector will look like? What talent your organization will need to meet the demands of the future? What talent already exists within your company/your sector/your region that meets those demands? What potential talent exists within your company/your sector/your region that can be developed over time to meet the demands of the future? 40
41 Thank You 41
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