Succession planning vital for SMEs too
WITH talent in short supply, having an effective succession plan is key to the continuity and expansion of any business - even small and medium-sized enterprises (SMEs).
But as many are family-owned businesses, SMEs face the added challenge of deciding whether to hand the baton over to the next generation of family members, or to source for talent outside the company.
The latter may prove to be a challenge, as most SMEs have weak employer brands, said Mr Josh Goh, the assistant director of corporate services at human-resource (HR) consultancy The GMP Group,
"Although some SMEs have already taken steps to beef up their HR competencies, the negative perception is so deeply entrenched in job seekers that it will take more time and progressive SME employers to make the difference," he noted.
Succession planning, in which high-potential individuals are identified and groomed to fill key leadership positions, should not be put off.
Unplanned leadership changes can happen anytime - for example, with the resignation of a senior executive - Mr Goh said, which can create disequilibrium within the organisation.
"If the previous leader has been the face of the organisation and strongly associated with the brand, it could affect staff's morale and even shake customers' and investors' confidence," he explained.
One SME which is thinking about succession planning is BusAds, a family-run company specialising in the production and installation of large-format outdoor advertising.
Mr Alvin Yapp, 43, BusAds' corporate affairs director, who oversees the business started by his father in 1983, said one of his two nephews could take over the reins when they grow up.
But this will not be until 20 to 25 years' time, and is a risky plan, for he would be left high and dry should neither of them be interested in the business, Mr Yapp added.
In the meantime, Mr Yapp said the company is looking to identify potential staff internally, and investing in them.
Besides being sent for training courses, these staff are involved in key decision-making processes, such as coming up with solutions for clients and evaluating the pros and cons of taking up particular projects.
"When they are heard and see that their opinions do influence the company's direction, they have the sense of being a stakeholder," Mr Yapp explained.
The firm has also moved to a performance-based remuneration system where exemplary employees get a bigger bonus.
In BusAds, which has about 50 staff, there is also a small core group of key personnel.
Mr Yapp said these core personnel each lead a team of about five to 10 staff, and have identified individuals who can succeed them.
Asked what he looks for in a successor to his own role, Mr Yapp said it should be someone who can help to "sustain the company".
"What I'm worried (about) is when I cannot continue to take care of the staff," he added.
But he feels that the responsibility of growing the company will forever remain on his shoulders. "You can never 'resign' from the family business, it's not like in any other company, where you can drop a letter and leave," Mr Yapp quipped.
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