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Regrettably, only a quarter of companies have employees ready to fill in for C-level executives when they retire or leave the organization. And in dire situations-such as death or incapacitation-that require an immediate need to fill the post, only 8% of companies have created an internal succession plan.
Since two-in-five new CEOs are replaced within their first year and one-half are replaced on the job, this level of unpreparedness is unacceptable. It results in companies needing to fill these posts from outside the organization. Studies indicate that this often results in declining shareholder returns because insider CEO candidates are more knowledgeable about the company's goals and challenges. This change at the top can also produce confusion and chaos, leading to an exodus of other top talent.
This neglect toward succession planning is not limited to top executives; it extends through management ranks, despite clear knowledge that the workforce is aging. By 2018, nearly all Baby Boomers will be 55 and older, which forces companies to plan for business growth.
The solution is for organizations to become more aware and knowledgeable on the potential loss of key employees. Ultimate Software has three predictive analytics tools that can assist in succession planning: UltiPro High Performer Predictor™, UltiPro Retention Predictor™ and My Leadership Actions™. Learn more about how these tools can arm your organization with key knowledge, leaving high performing talent ready if and when they are needed.